By Jay Teamer and Reed Hooks
This report represents our commitment to transparency with Tennessee’s entrepreneurial community. As a state-backed investor, we believe it is important to clearly report how capital is being deployed, where it is flowing, and how it is performing relative to the broader market. Our goal is not only to invest, but to build trust, strengthen coordination across the ecosystem, and ensure that founders, investors, and partners understand how InvestTN is operating and evolving.
Highlights
- InvestTN has invested in 39 Tennessee companies to date and supported 25 startups during FY25. Two commitments of $3 million each were made to Veteran Venture Capital and Market Square Ventures.
- $13.015 million has been expended through the Regional Seed Fund and Growth Fund as of June 30 2025. Of that total, $5.535 million was deployed during FY25. Another $6 million is committed to venture funds, bringing the FY25 commitment to $11.535 million.
- Each dollar of InvestTN capital is estimated to attract about four dollars of private investment, amplifying our impact across the state.
- Tennessee companies raised $459.4 million in Q1 2025 and $311.9 million in Q2 2025. The broader venture market remains selective, with large deals capturing most of the capital and valuations rising in later‑stage rounds.
Market Overview
In 2025, the U.S. venture capital market saw renewed capital deployment alongside continued selectivity in underwriting, with investment increasingly concentrated into fewer, higher-conviction financings. While national exit conditions showed early signs of normalization, liquidity remained uneven across sectors and stages, reinforcing investor emphasis on efficiency, durability, and conviction-driven capital allocation.
In this environment, Tennessee recorded $1.18 billion of venture capital invested across calendar year 2025, according to PitchBook, with capital deployment peaking in the first quarter and stepping down sequentially through Q4. This pattern mirrors trends observed across much of the Southeast, where deal activity remained steady while capital deployed declined—reflecting a shift in round composition, with fewer large late-stage financings and a greater share of early- and mid-stage rounds. This dynamic reflects investor selectivity rather than reduced engagement: 188 Tennessee-based companies raised venture funding during the year, underscoring continued company formation and sustained participation across stages even as dollars deployed per quarter normalized.
Deal characteristics further reinforce this market profile. A $2.07 million median deal size and $20.5 million median post-money valuation point to valuation discipline consistent with broader regional and national trends in 2025. Across the Southeast, deal activity remained steady while capital deployed declined quarter-over-quarter, reflecting fewer large financings contributing to quarterly totals and a greater weighting toward smaller rounds.
(Sources: ncva.org, pitchbook.com (as of 2/5/26), launchtn.org)
InvestTN Program
InvestTN is Launch Tennessee’s $70 million equity investment fund. The program is designed to provide catalytic capital to early‑stage and growing startups across the state. Since its inception, InvestTN has invested in 39 Tennessee‑located companies. During FY25 alone, we supported 25 startups. In addition to these direct investments, we made two commitments of $3 million each to Veteran Venture Capital and Market Square Ventures. For every dollar InvestTN invests, roughly four dollars of private capital are catalyzed, multiplying the program’s impact.
Our portfolio spans a range of industries, including healthcare technology, life science and biotech, artificial intelligence, consumer goods, fintech and logistics, and includes companies in urban centres and smaller communities. Nashville hosts the largest number of portfolio companies, but on a per‑capita basis smaller cities like Nolensville and Brentwood see a high concentration of InvestTN investments.
(sources: launchtn.org , census.gov, pitchbook.com (as of 2/5/26)
FY25 Capital Deployment
Our capital deployment data offer a detailed view of how InvestTN funds were committed and spent during FY25, which covers July 1 2024 through June 30 2025. At the start of FY25, the cumulative amount expended stood at $7.48 million. By year‑end, the total expended increased to $13.015 million, meaning we deployed $5.535 million during FY25. We also obligated $6 million to two venture funds. Combining the new expenditure with these commitments results in $11.535 million of capital deployed or committed during FY25.
Quarterly breakdown
The table below summarises the incremental amounts spent and obligated each quarter of FY25. The second quarter saw the largest increase due to several Growth Fund investments. Obligations were made in the first quarter through our commitments to Veteran Venture Capital and Market Square Ventures.
| FY25 quarter | Approx. dates | Expenditure (USD) | Obligations (USD) | Total committed (USD) |
| Q1 | Jul–Sep 2024 | 850,000 | 6,000,000 | 6,850,000 |
| Q2 | Oct–Dec 2024 | 2,940,000 | 0 | 2, 940,000 |
| Q3 | Jan–Mar 2025 | 965,000 | 0 | 965,000 |
| Q4 | Apr–Jun 2025 | 780,000 | 0 | 780,000 |
| FY25 total | 5,535, 000 | 6,000, 000 | 11,535,000 |
Visual summary
The charts below show quarterly expenditure versus obligations and illustrate how capital commitments accumulate over the fiscal year. The first chart compares the amounts spent to those committed in each quarter. The second chart traces the cumulative trajectory of both expenditure and total commitments.
(Source: launchtn.org)
Investor Activity and Portfolio Geography
To contextualize InvestTN’s activity, it is helpful to compare our deal volume with that of other investors active in Tennessee. The table below provides approximate deal counts for 2025. These numbers should be updated when new data become available.
| Investor | Deals completed (2025) | Notes |
| Innova Memphis | 32 | Early stage healthcare fund based in Nashville |
| InvestTN | 26 | Mission‑driven program funded by the State Small Business Credit Initiative; 39 companies funded overall and 25 in FY25 |
| Jumpstart Foundry | 20 | Seed stage accelerator fund |
| Right Side Capital Management | 17 | National micro‑VC investing across many states |
| Other funds | ≈8 | Includes Mercury Fund, FINTOP Capital and angel groups |
Portfolio companies are concentrated in Nashville, Knoxville and Chattanooga, but InvestTN’s reach extends statewide. Pairing portfolio counts with 2024 population estimates highlights where our impact is densest on a per capita basis.
| City | Portfolio companies | Population (2024 estimate) | Companies per 100 k |
| Nashville | 21 | 704,963 | 2.98 |
| Knoxville | 8 | 198, 722 | 4.03 |
| Chattanooga | 7 | 191, 496 | 3.66 |
| Memphis | 4 | 610, 919 | 0.65 |
| Franklin | 3 | 89, 142 | 3.37 |
| Brentwood | 2 | 45, 525 | 4.40 |
| Nolensville | 1 | 15, 809 | 6.33 |
These distributions show that while the majority of investments are in larger metros, smaller cities like Nolensville and Brentwood have a high concentration of InvestTN companies relative to their population.
(Sources: census.gov, pitchbook.com as of 2/5/26, Launchtn.org )
Increasing Catalytic Efficiency and Outreach in 2026
While FY25 demonstrated strong activity and disciplined deployment, we are focused on continuously improving how efficiently our capital catalyzes private investment and how effectively we reach founders statewide.
In 2026, we will prioritize three areas of improvement:
1. Increasing catalytic efficiency
We will refine our underwriting processes and capital structuring to maximize private capital leverage per dollar invested. Our goal is not simply to deploy more capital, but to increase the multiplier effect of each investment.
2. Expanding founder outreach across regions
Geographic analysis shows meaningful representation in smaller communities, but also highlights opportunities in markets such as Memphis and other underrepresented regions. We will increase proactive sourcing, regional engagement, and ecosystem partnerships to ensure founders statewide have access to InvestTN capital.
3. Strengthening later-stage participation
As Tennessee valuations increase and rounds grow in size, we will evaluate how the Growth Fund can more effectively anchor and participate in Series A and B financings. Keeping high-growth companies headquartered in Tennessee requires competitive capital at scale.
Our objective is to remain not just one of the most active investors in Tennessee, but one of the most catalytic.
Conclusion
FY25 marked a year of disciplined deployment and measurable catalytic impact. We deployed $5.535 million in new capital, committed $6 million to venture funds, and supported 25 startups across Tennessee. Our cumulative portfolio now includes 39 companies spanning industries and regions across the state.
This report is part of our commitment to transparency. We believe that public capital must be reported publicly, clearly, and consistently. By sharing detailed metrics and market context, we aim to foster trust, strengthen collaboration, and contribute to a more connected entrepreneurial ecosystem in Tennessee.
As we move into 2026, our focus remains on increasing catalytic efficiency, expanding outreach, and ensuring that founders across all regions of Tennessee have access to competitive capital and long-term partnership.
We are building infrastructure, not just deploying dollars.
(Sources: ncva.org, pitchbook.com (as of 2/5/26), launchtn.org)