5 Reasons Tennessee is a Startup-Friendly State

Here at Launch Tennessee, we are honored to contribute to the energy around the entrepreneurial movement in the state, which has been growing exponentially each year. Given that Launch Tennessee just celebrated its fifth anniversary, I thought now would be a good time to talk about how far the state and organization have come. Though it’s hard to pick out just a handful of key accomplishments, in sticking with the birthday theme, here are my top five:

1. Capital investment in Tennessee has doubled — in fact, more than doubled, from $189 million in 2012 to $428 million in 2016. The increase is a testament to two positive trends: First, local investors are increasingly putting their risk capital to work. Second, investors looking in Tennessee are finding a greater quantity of high-quality deals. This is true for local investors and for those in other markets. While the number of in-state angel funds has tripled from 2012-2016, Tennessee companies are also bringing in significant capital from out-of-state investors who recognize the opportunity for outsized returns by investing here. Still, there’s more work to do. We need to continue to attract individuals and groups seeding early-stage startup growth and we have some exciting programs in place to do so. At the beginning of 2017, Launch Tennessee set a 2020 goal of bringing in $2 billion worth of venture investment over a four-year period and we’ve met benchmarks that put us on track to hit this target.

 

2. We have created a nationally unique statewide network of Entrepreneur Centers (EC’s). These ECs operate independently of Launch Tennessee, though we provide them with funding and programming support. We also support a platform for the ECs to share best practices with us and each other. At the end of the day, our ECs are hubs of vital entrepreneur resources and we are the connective tissue to create a cohesive system across the state. The numbers from the ECs are impressive. Their companies have raised $140 million in capital, more than 500 companies have graduated from their accelerator programs and they have collectively hosted 500+ events per year including pipeline-building activities such as pitch nights, meetups, startup weekends and angel education workshops. Two of our ECs have developed specific initiatives to build the workforce of tomorrow, including a program rolled out in more than 50 Tennessee schools that has taught coding skills to more than 5,000 students.

 

3. Our programs support diversity in Tennessee’s entrepreneurial community. We have worked very hard at Launch Tennessee and with our partners to design programming that meets the needs of a diverse set of individuals. While there’s always more work to be done, I’m proud to note that we now represent 83% of our 95 counties in our statewide programming, up from 43% just two years ago. We are well on our way to achieving our goal of 100% participation, especially given the increased resources in the state budget for rural economic development. We have also launched specific programming to support our many excellent female entrepreneurs throughout the Volunteer State. This work has paid off. In 2016, WalletHub ranked four Tennessee cities among the top 15 in the country for female-owned businesses. In fact, Tennessee cities claimed three of the top four spots on the list. We keep our diversity goals top-of-mind in everything we do to make our state’s entrepreneurial community as welcoming as possible to all Tennesseans.

 

4. We launched what has become the Southeast’s premier innovation and entrepreneurship event. We held our first Entrepreneurship & Technology Conference, now known as 36|86, in 2013. We turned it around on a dime, hosting the first event on June 12-13, only three months after launching its website on March 20. Since that first conference, we have doubled the number of attendees (eclipsing 1,000 at this year’s event), tripled the number of attending investors (160 this year, with 100 different firms) and become the marquee entrepreneurship event in the Southeast. While we have had some amazing speakers who have provided wonderful takeaway value for audience members, the most successful element of 36|86 has been the relationships it has sparked between investors, entrepreneurs, Launch Tennessee staff and our partners.

 

5. We have built a successful model for public-private partnership. This is perhaps the most important item to celebrate at year five — the fact that we have created a strong, replicable blueprint for public-private partnership that supports entrepreneurial growth. None of our accomplishments would be possible without the financial and programmatic support we receive from the Department of Economic & Community Development, Governor Haslam and the State Legislature. These essential partners have allowed us to be entrepreneurial, which has meant moving fast, trying new approaches, and pivoting our strategy quickly when necessary.

Thanks to our collective work, Tennessee has emerged as a model for states across the country seeking to leverage available resources to help entrepreneurs. In addition to state government, there are numerous other organizations and individuals, public and private, who have supported Launch Tennessee, the ECs and our many other partners working on the ground to help entrepreneurs succeed and communities prosper.

Many of you have heard me say that the way we win in Tennessee is through collaboration, by working together and doing our part to help entrepreneurs and communities thrive. We have seen the benefits of this community-oriented mindset firsthand as Tennessee has become a hotbed of entrepreneurship over the past five years.

I’ll end with gratitude. To all the investors, corporations, foundations, universities, municipalities and individual mentors and leaders — thank you for your extraordinary efforts and support. Now is the time to throw gas on the fire and double down so that we can achieve our 2020 vision to make Tennessee the most startup-friendly state in the country.

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