INCITE Co-Investment Fund
Launch Tennessee
(615) 673-4419
info@launchtn.org
Purpose of Initiative
The INCITE Co-Investment Fund is an initiative designed to drive growth and create knowledge-based jobs in Tennessee by encouraging investment in the state’s developing small businesses. The program is administered by Launch Tennessee and the Fund matches a portion of investments in Tennessee-based companies.
Award Details
There are three tiers—tier 1 is associated with seed stage investment, tier 2 is associated with early/growth stage investments, and tier 3 is associated with expansion stage investment. There is a 50% match for tier 1 investments, a 33% match for tier 2 investments, and a 25% match (capped at $3 million) for tier 3 investments.
Eligibility
There are two levels of eligibility for this program. Investors must apply to become an approved investor and there are also requirements that determine whether an investment is, in fact, a qualified investment. Before applying for Co-Investment funding, an applicant must be certified by Launch Tennessee as an Approved Investor. Approved Investors must meet the criteria below:
- They must fit into any of the following categories: TNInvestco (as certified by the State of Tennessee, in compliance with T.C.A. § 4-28-101 et seq.); Small Business Investment Company (SBIC), New Market Venture Capital Company or Rural Business Investment Company, as certified by the U.S. Small Business Administration; A person or entity that has at least $5 million of assets under management, or an investment vehicle that is managed exclusively by a person or entity having at least $5 million of assets under management, and is deemed an accredited investor under the Securities Act of 1933; or a person or entity that is deemed an accredited investor under the Securities Act of 1933. A person or entity approved solely under this Section D (i) is only eligible to participate in Qualified Investments in which there is a participating Approved Investor as qualified under Section A, B, or C above and (ii) is not eligible to be the lead Approved Investor for the respective Qualified Investment transaction.
- Investors must submit a fully completed Approved Investor application to Launch Tennessee. The application is available here.
- A Qualified Investment is defined as an investment of cash by an Approved Investor in a Qualified Business for the purchase of equity or equity warrants.
- A Qualified Business is one that meets the following criteria: the business must be a non-public company; the business must be headquartered in Tennessee; the company’s principal business operations must be located in Tennessee; at least 60% of its employees must be providing services in Tennessee to the business; and the business cannot be involved in the following business areas: real estate (development or leasing), insurance, banking, lending, professional services (layer, accountant, investment advisor, or physician), oil and gas exploration, mining, gambling enterprises (unless the business earns less than 33% of its annual net revenue from lottery sales), construction, the production or distribution of motion pictures/television shows/sound recordings, pyramid sales, accommodation/food service establishments, and retail establishments (except when the primary purpose of the business is the development or support of electronic commerce using the Internet). Businesses must have less than 500 existing employees. Additional criteria are outlined through the website.
- A Qualified Business must use Co-Investment funding for a business purpose, including start-up costs, working capital, business procurement, franchise fees, equipment, inventory, and the purchase, construction, or renovation, or tenant improvements for an eligible place of business that is not for passive real estate investment purposes. Funds may not be used for activities that relate to acquiring or holding passive investments or lobbying activities; reimbursing funds owed to any owner; purchasing any portion of the ownership interest of any owner of the qualified business; effecting a change that is not designed for the long-term benefit of the qualified business; refinancing existing debt where the lender is in a position to sustain a loss and the government would take over that loss; repaying delinquent federal or state income taxes; repaying taxes held in trust or escrow; or conducting basic or discovery research that is traditionally federally-funded (which is not intended to include general product development research).
Application Information
Application information is available here.
Tennessee Community Ventures
Tennessee Community Ventures
bizplan@tncvfund.com
Purpose of Initiative
Tennessee Community Ventures is focused on technology transfer, seed, and early stage investment opportunities. TNCV identifies technologies, products, and services that offer a unique solution to a particular problem or opportunity for their respective industries, lend themselves to business models that offer a clear path to profitability (with modest capital needs), and promote scalable cost structures that create competitive advantages.
Eligibility
Opportunities will be subject to TNCV’s rigorous due diligence process and will need to meet the following investment criteria: highly motivated and experienced management team; differentiated and scalable technology, products, or services that address new market opportunities or are sufficiently disruptive to established market solutions; strong customer value proposition and customers who will pay a premium for a unique offering; long-term potential to transform new or existing markets poised for rapid growth or change; potential to achieve significant market share in a large and growing market; ability to grow independent of market conditions; and availability of multiple exit opportunities.
Award Details
TNCV has committed capital to proof-of-concept investments, which are expected to range from $50,000-$100,000. More traditional seed and early stage initial investments are expected to range from $250,000 to $750,000 and target the funding gap between start-up and later stage institutional venture rounds. TNCV’s target investment size over the life of each portfolio company is between $1 million and $2 million. The target investment size is typically achieved through multiple rounds of investment.
TNInvestco
Lamont Price
Tennessee Department of Economic and Community Development
312 Rosa L. Parks Avenue, 26th Floor
Nashville, TN 37243
(615) 741-9301
Lamont.price@tn.gov
Purpose of Initiative
TNInvestco is a state-sponsored, venture capital program that provides capital to high-growth, transformational businesses in Tennessee. The goals of the program are to develop the entrepreneurial infrastructure across the state, to attract new capital to Tennessee and to diversify the state’s economy and create jobs through the development of “innovation clusters” that result in new companies being spun off.
Eligibility and Restrictions
For Tennessee small and start-up businesses to qualify for TNInvestco funds, they must be independently owned and operated. The business must be headquartered and principally operated in Tennessee with at least 60% of its employees located in Tennessee. The business must not be primarily engaged in professional services (accounting, medicine, or legal services), banking or lending, real estate development, insurance, oil and gas exploration, or direct gambling services. The company should demonstrate a high potential for growth and must have no more than 100 employees. A business from outside of Tennessee may be considered for the program if they commit to move their headquarters and operations within 12 months after receiving funding from TNInvestco.
Application Information
Interested companies can fill out an application form for the program.
Council & Enhanced Tennessee Fund
Tyler Augusty
30 Burton Hills Boulevard, Suite 576
Nashville, TN 37215
Phone: 615-255-3707
Fax: 615-255-3709
taugusty@councilcapital.com
John Davis
30 Burton Hills Boulevard, Suite 576
Nashville, TN 37216
Phone: 615-255-3707 x312
Fax: 615-255-3709
jdavis@councilcapital.com
Purpose of Initiative
Council & Enhanced Tennessee Fund, LLC is a venture capital and private equity firm specializing in seed, early stage, mid venture and late venture investments. The firm focuses on companies in all sectors. It primarily invests in Tennessee. The firm seeks to invest in high-growth companies including minority-owned and women-owned businesses.
Eligibility
The Council & Enhanced Tennessee Fund seeks to invest in companies with exceptional management teams, attractive unit economics (for example, a high percentage of revenue coming from recurring and repeating customer purchases), appropriate concept risk, large market opportunities, scalable business models, and those that satisfy TNInvestco requirements.
Updated March 2018 by Kevine Lidoro