Tennessee Glows with Entrepreneurship and Development
11 Jul, 2014By: Governor Bill Haslam
Tennessee is quickly becoming one of the best places in the country for entrepreneurs to launch and grow an early-stage company. Building on a deep store of entrepreneurial DNA, Tennessee is home to an ever-increasing number of startup companies in technology sectors ranging from medical devices and healthcare to digital media and consumer Internet.
As noted by Governor Bill Haslam in a 2013 issue of Trade & Industry Development, “Tennessee continues to take center stage when it comes to economic development, standing out amongst the competition and attracting new business from around the world, as well as growing existing industries and supporting entrepreneurship. A move to Tennessee allows companies to take advantage of its central location, tap into a highly qualified workforce in a right-to-work state, enjoy a low tax burden and collaborate with an administration that is business-friendly with the goal of making Tennessee the No. 1 place in the Southeast for high-quality jobs.”
Tennessee’s entrepreneurship and innovation efforts made significant progress in 2012 when public and private sectors came together to create an organization that directly supported and coordinated efforts around entrepreneurship and technology. That organization was Launch Tennessee, a public-private partnership focused on high-growth job creation with the goal of making Tennessee the best place in the Southeast for entrepreneurs to start and grow a company.
Launch Tennessee supports economic development by focusing on four key areas: entrepreneurship, commercialization of research, capital formation and outreach. These four pillars were carved out through careful planning by the state government and private partners who took great stake in the state’s entrepreneurial future. As stated by Bill Hagerty, commissioner of Tennessee’s Department of Economic & Community Development, “Tennessee has a great entrepreneurial spirit and great innovation assets. We simply need to enhance the environment for those ideas to take root, grow and create new jobs.”
Launch Tennessee oversees and connects nine regional business accelerators throughout the state – the only statewide-connected network of accelerators in the country. They also help companies with the development of business plans and management teams formed around emerging technologies from research institutions. Under the guidance of Launch Tennessee, the state’s nine regional business accelerators have screened over 2,000 companies and accelerated 230 early-stage companies that have in turn raised a total of $48 million in private capital since 2012.
Tennessee’s regional accelerators have designed their programs to be more sector-focused. The first medical device accelerator launched in the country, ZeroTo510, is located in Memphis. One of only a handful of automotive accelerators in the country, autoXLR8R, is in Tullahoma/Spring Hill. Tennessee has one of the country’s only agriculture-focused accelerators, which is based in Martin. The Biz Foundry in Cookeville is leading the charge to provide tech and software education through programs such as TN Code Academy and 100 Girls of Code. Other accelerators concentrate on health care (Nashville), 3D printing and smart grid (Chattanooga) and digital media (Knoxville).
Increasing technology commercialization from the state’s research institutions is another focus area for Launch Tennessee. Tennessee’s research institutions invested $3 billion last year in research and development, and Launch Tennessee is working to translate these dollars into start-up opportunities. Launch Tennessee has implemented Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) support programs for early-stage companies across the state and is connecting inventors and technologies with entrepreneurs who are interested in commercialization. Since 2012, there have been nearly 50 university start-ups spun out of the state's research institutions, in addition to over 850 patents filed and over 150 patents issued.
To further increase technology output, the state has implemented several programs to expand the amount of venture capital investment. One particular public program that has contributed significantly to the state’s capital numbers is the INCITE Co-Investment Fund, which is being administered by Launch Tennessee. This fund, which was developed from the federal State Small Business Credit Initiative program, has invested $20.4 million in 32 Tennessee companies since March 2012. These investments have leveraged another $57 million from private capital sources, equaling a total of $77 million investment in these Tennessee-based companies. This has been a tremendous boost to the state’s investment landscape and as these companies mature and achieve success through liquidity events such as M&A and IPOs, invested capital plus profits will be returned to the INCITE Fund for investment in more Tennessee companies.
Elevating Tennessee’s national profile as a hotbed of entrepreneurship, technology and innovation is key for the state’s future success. One of the most effective ways to achieve this is through outreach and bringing people together. Launch Tennessee hosts a number of sector-specific events that attract entrepreneurs, mentors, researchers and investors throughout the year. In 2013 alone, there were over 600 entrepreneur-focused events held throughout the state. A flagship event for the organization is their conference known as Southland.
Launch Tennessee created the concept for Southland last year to bring attention to the state and region's flourishing activity in entrepreneurship and technology, as well as give Southeast start-ups more access to investors. Last year’s conference welcomed 600-plus entrepreneurs, investors, thought leaders and innovators to Tennessee with the goal of connecting the Southeast’s best early-stage companies with investors from across the country.
This year’s conference, scheduled for June 9-11, 2014, is primed to further catapult the Southeast's startup community onto the national stage and create an ideal conference for entrepreneurs and tech enthusiasts nationally. This year’s slate of speakers includes former Vice President Al Gore, along with CEOs from big-name companies such as PayPal, Evernote, Box and Bonobos. The conference also boasts a start-up competition in which 10 early-stage companies will present for the chance at a $100,000 investment.
Another key element of Launch Tennessee’s outreach strategy is highlighting all that Tennessee has to offer.
“For recruitment efforts targeted at out-of-state investors, it is important to shine a light on some of the factors that make Tennessee a worthy and investable state,” said Launch Tennessee CEO, Charlie Brock. “The Volunteer State has several appealing qualities that are attracting people from all over.”
A huge technology draw for Tennessee is its connectivity. Having cutting-edge access to one-gigabit Internet in cities such as Chattanooga, Jackson, Tullahoma, Clarksville, Bristol and potentially Nashville sets Tennessee apart as one of the most connected states in the country. This shows increasing innovation across a statewide level, as well as extreme value to entrepreneurs who are looking to build potentially disruptive technologies in a high-bandwidth environment.
Tennessee is attractive and affordable in terms of living. It has a business-friendly governor and legislature who are implementing low taxes and also are putting through smart regulations to encourage statewide development and growth. A recipient of many national accolades for its job creation efforts, Tennessee’s economic development infrastructure is without a doubt reaffirming just how attractive the state is for both living and working.