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Impact Fund

Overview

 

LaunchTN leverages our complete portfolio of programs, relationships, and other resources on behalf of Tennessee startups when funding is committed from the Impact Fund, maximizing the potential return on investment in the form of real dollars, jobs, capital investment, and innovation leadership.

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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.

The seed investment includes three equity initiatives: Seed Investment, Pre-Seed Investment, and Follow-On Investment. The LaunchTN Capital Program Team helps the Impact Fund applicants find the appropriate resources. Funding from each initiative requires a match of private dollars, a thorough diligence process by LaunchTN, and approval from the Impact Fund Committee.

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

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.

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
Fund investment

$50K to $150K

Private sector match ratio

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 sector match requirements

Private investment must be made on the same terms as the Fund investment

Investment structure

SAFE notes, convertible debt, revenue-share, or equity

Investment timing

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

Other
  • 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
Fund investment

$25K to $50K

Private sector match ratio

1:1 minimum

Private sector match requirements

Founder’s capital cannot exceed 50% of private sector match

-and-

Private investment must be made on the same terms as the Fund investment

 

Investment structure

Convertible notes or revenue-share instruments

Investment timing

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

Other
  • 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
Fund investment

$150K to $250K

Private sector match ratio

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 sector match requirements

Private investment must be made on the same terms as the Fund investment

Investment structure

SAFE notes, convertible debt, or equity

Investment timing

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

Other
  • 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.

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