Public and private leaders spoke Wednesday at Launch Tennessee’s entrepreneur conference, 3686, diving into the unique strengths and auspicious advantages changing the landscape of Tennessee’s venture capital community — specifically family offices.
The panel, which took place at the Frist Art Museum in Nashville, included:
- Stuart McWhorter, Commissioner, Tennessee Department of Economic and Community Development
- Stacy Gibson, Assistant Commissioner and ECD Liaison, Tennessee Department of Revenue
- Greg Gonzales, Commissioner, Tennessee Department of Financial Institutions
- Michael D. Sontag, Member Trusts & Estates Chair at Bass, Berry & Sims
Baker Donelson Attorney and Launch Tennessee Board member Bruce Doeg moderated the discussion.
“What we are trying to do is bring awareness of why it’s critical to have (family offices) invest in Tennessee,” ECD Commissioner Stuart McWhorter said in a Facebook video about the panel.
A family office is a privately held company that handles investment and wealth management for ultra-high-net-worth individuals, typically a family that has built significant holdings across generations. Generally, they might get involved in philanthropy and put money into the stock market, but with increasing frequency, they are also looking to invest in rising startup companies, Commissioner McWhorter said.
The panel that kicked off 3686’s Investor Day, an exclusive track of 3686 programming for attendees in the venture capital space, was just the beginning of additional conversations Commissioner McWhorter is looking to have as part of a concentrated effort to attract both more family offices as well as the increase depth, scale, and diversity of businesses for them to invest, he said.
Leaders said Tennessee is seeing an influx of wealth coming from states like California. They want to be here for a variety of reasons, panelists said, including the fact that there’s no state income tax. Panelists also said the people of Tennessee are generally friendly and engaged, making it a great place to do business.
The state is making investments in infrastructure and workforce development, making Tennessee even more attractive to family offices and startups, Commissioner McWhorter said.
For startups and entrepreneurs, access to capital is always a challenge, and these family offices are a dynamic and impactful solution.
And unlike venture capital funds, family offices can offer a longer and more patient timeline for seeing returns, Commissioner McWhorter said.
“This is really what’s going to make Tennessee very unique in a lot of ways,” he also said. “As more wealth moves to our state, not only are they investing dollars in our state with companies, but the companies they may have elsewhere — they are going to start thinking about moving those businesses to Tennessee.”