The Follow-On Investment provides capital to companies in which LaunchTN already holds an equity position. Prudent follow-on investments in our portfolio companies are essential to “signal” other investors within the ecosystem that a company continues to have positive growth prospects. Furthermore, these investments prevent significant dilution, which allows us to maximize the ROI of the LaunchTN portfolio.
Impact Fund
Overview
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By contributing to the continuum of capital resources for Tennessee startups, the state can promote financial opportunity and inclusion for all citizens.
Seed Investment
The Impact Fund focuses on Tennessee-based seed-stage ventures in a wide variety of industries and verticals. LaunchTN functions in multiple ways, including:
- As a round closer for companies that have raised the majority, or all, of the matching funds necessary; or
- As an early commitment and vote of confidence for companies that clearly demonstrate growth potential but are lacking angel or seed-stage risk capital
Pre-Seed Investment
The Pre-Seed Investment provides a customized investment solution for otherwise under-resourced early-stage companies. It responds to several conditions:
- Shortage in the capital markets with respect to smaller-dollar products for new companies
- Lack of access for many entrepreneurs to the traditional “friends & family” funding that can bridge a young company to traditional capital sources
- Desire for building a diverse founder network (gender, race, ethnicity, geography, business model)
Follow-On Investment
LaunchTN Investments
We invest in innovative, early-stage Tennessee startups, pairing our capital with connections, programming, and resources to help each team go further. With a focus on Tennessee, we’re proud to support companies with big ideas and global potential. Check them out here.
Impact Fund Details
Seed Investment
$50K to $150K
4:1
3:1
** for companies with principal businesses in Tier 3 and 4 counties, and Opportunity Zones, female-owned companies, minority-owned companies, veteran-owned companies, and companies owned by those with disabilities (per state definition)
2:1
** for companies that fit two or more of the following criteria (only one criteria can be geographic): principal businesses in Tier 3 and 4 counties, and Opportunity Zones, female-owned companies, minority-owned companies, veteran-owned companies, and companies owned by those with disabilities (per state definition)
Private investment must be made on the same terms as the Fund investment
SAFE notes, convertible debt, revenue-share, or equity
Companies must close on Fund investment within 180 days of Investment Committee decision
** LaunchTN reserves the right, but is not under the obligation, to make 30-day extensions at our discretion
- Companies must be based in Tennessee at the time of investment with intention to remain so for 24 months
- LaunchTN will not take board seats or set deal terms
- LaunchTN will provide ongoing support through access to a variety of networks and resources
- Companies will report annually to LaunchTN on jobs, revenue, and other economic development-related data
Pre-Seed Investment
$25K to $50K
1:1 minimum
Founder’s capital cannot exceed 50% of private sector match
-and-
Private investment must be made on the same terms as the Fund investment
Convertible notes or revenue-share instruments
Companies must close on Fund investment within 90 days of Investment Committee decision
** LaunchTN reserves the right, but is not under the obligation, to make 30-day extensions at our discretion
- Companies must be based in Tennessee at the time of investment with intention to remain so for 24 months
- LaunchTN will not take board seats or set deal terms
- LaunchTN will provide ongoing support through access to a variety of networks and resources
- Companies will report annually to LaunchTN on jobs, revenue and other economic development-related data
Follow-On Investment
$150K to $250K
4:1
3:1
** for companies with principal businesses in Tier 3 and 4 counties, and Opportunity Zones, female-owned companies, minority-owned companies, veteran-owned companies, and companies owned by those with disabilities (per state definition)
2:1
** for companies with that fit two or more of the following criteria (only one criteria can be geographic): principal businesses in Tier 3 and 4 counties, and Opportunity Zones, female-owned companies, minority-owned companies, veteran-owned companies, and companies owned by those with disabilities (per state definition)
Private investment must be made on the same terms as the Fund investment
SAFE notes, convertible debt, or equity
Companies must close on Fund investment within 180 days of Investment Committee decision
** LaunchTN reserves the right, but is not under the obligation, to make 30-day extensions at our discretion
- Companies must be based in Tennessee at the time of investment with intention to remain so for 24 months
- LaunchTN will not take board seats or set deal terms
- LaunchTN will provide ongoing support through access to a variety of networks and resources
- Companies will report annually to LaunchTN on jobs, revenue. and other economic development-related data
Learn about the BuildTN Fund
The Impact Fund is no longer accepting new applications at this time, in anticipation of the launch of our BuildTN Fund. To receive updates from us when the BuildTN Fund opens applications for funding, sign up below.
Learn More