When Hunter Hillenmeyer played linebacker for the Chicago Bears, he looked for mismatches that he could exploit to bring someone down.
He is pouncing on one now in Nashville, in his new role as a venture capital investor. But he's aiming to have the opposite effect, lifting up his hometown's growing technology scene by doing what he can — with the backing of a member of a prominent New York business family — to blunt a nagging issue many startups confront.
Hillenmeyer has joined New York's Company Ventures as a general partner. Hillenmeyer will be based in Nashville, where he's lived full-time since returning in 2017, marking the first expansion outside of Company Ventures' home market.
"There are a lot more people building great things in Nashville than there is early-stage capital chasing it," Hillenmeyer said in an exclusive interview. "My now-partners at Company saw that same asymmetry."
Company Ventures started nine years ago with co-founders Matt Harrigan and Michael Milstein. The latter is a member of a billionaire family in New York City that is a real estate and philanthropic titan, and also owns Emigrant Bank and 8AM Golf. (The golf business itself is expanding into Nashville and helped spark Milstein's interest in doing more in Music City, according to Hillenmeyer).
Hillenmeyer sees "a decade of explosive growth" ahead for startup activity in the region. He has experience trying to build and raise money for a local startup, previously serving as president and co-founder of video gaming startup Overdog Inc.
"It's interesting to juxtapose what I see now, 11 years later," Hillenmeyer said. "There's nowhere where it is improving faster than Nashville, as far as availability of capital and frankly just if you're a talented founder. At some point, you slam on the gas and raise a round [of investment] where your headcount will go from 40 to 250 in 12 to 18 months. Nashville has all the makings of a city that can grow with companies in that way, because there is so much tech talent moving here, because it's a city where so many smart 20-somethings want to move to, regardless of job availability. We're starting to prove that you can scale companies here, and that was not necessarily true five to seven years ago."
Where Company Ventures fits in
Company Ventures invests in digital health care companies, financial technology firms and enterprise software businesses. Hillenmeyer sees potential local investments in all three industries locally.
Company Ventures is raising its third fund now, with a target of $75 million.
"When [the fund] is fully invested several years from now, I'd love if 15% to 30% was invested into Nashville-based companies," he said.
Company Ventures already invests in Nashville-based Alto Solutions as well as Moneykit, which has Nashville ties.
"We come in peace. We're not trying to squeeze other funds out," he said. "Quite the opposite: We hope to work with a lot of the funds here in town to find and support great companies together."
Hillenmeyer also expects to replicate a prominent piece of the Company Ventures setup in New York, named Grand Central Tech. Several hundred founders apply to snag a year's worth of free office space in a Milstein-owned office tower. Company Ventures winds up investing in about one-third of participants, Hillenmeyer said.
"Those two floors of office space probably have more talent density than any space on the entire island of Manhattan," he remarked. "There's a tremendous amount of serendipity among the community that Grand Central Tech creates and fosters. That kind of residency will hopefully be a big part of what we do here."
We still need that coastal capital
Company Ventures focuses on companies needing pre-seed funding or a seed round of financing. A longtime obstacle for those kinds of startups in Nashville is a scarcity of attention and investors, especially if the business isn't in the region's signature health care industry.
"As companies grow, they still do need that coastal capital," Hillenmeyer said. "For us, writing a pre-seed or seed check into a company here, that first finish line is getting that company to the best possible Series A [investment] we can get them to, regardless of where that fund is physically located. Hopefully, one day, that's a Nashville-based Series A fund. Right now, especially if you're outside of health care, it's pretty likely that they're not."
In his prior job at the firm Next Legacy, Hillenmeyer said he established connections at many of the largest and most prominent venture capital funds in the nation. Company Ventures also has its own profile: Three of the first 10 companies it invested in have reached so-called "unicorn" status, valued at $1 billion or more.
"The beauty of Company Ventures is that we can … play our part in creating some of that scaffolding that the Nashville tech ecosystem needs, especially outside of health care, but we are not dependent on Nashville to support the entire fund," Hillenmeyer said.
