Headsup: LaunchTN may have to beard budget lion|
to fund Tennessee entrepreneurial leadership
By Milt Capps
Launch Tennessee, officially Tennessee Technology Development Corporation, has received about $20MM mostly from State funds in the past five years, but it may need an order of magnitude more to fund the ambitiously detailed strategic plan its staff outlined for its board today.
CEO Charlie Brock said that if his organization is to compete with such tech-driven economic development leaders as Ohio, Georgia and others, new and more innovative programs must be added to the organization's armamentarium.
LaunchTN/TTDC was legislated into existence in 1997 and began operations 20 years ago, in 1998. It was revived, rebranded and brought into closer orbit with ECD beginning in 2011.
The nonprofit, a virtual subsidiary of the State Department of Economic and Community Development, has been strongly supported by Gov. Bill Haslam and a succession of three ECD Commissioners in the past five years.
If it is to execute on the strategic plan it has outlined, expanding efforts in traditional focus areas and doing even more with regard, for example, to the state's Technology sector talent shortage, it may need greater resources.
Today, in a voice that seemed tinged with both enthusiasm and urgency, Brock put the Talent matter into perspective by noting pointedly that there are about 6,000 unfilled Tech jobs in Tennessee, right now. He made clear that is only one piece of the puzzle that must be confronted.
Note: LaunchTN is working to provide VNC a detailed copy of the strategy and remarks Brock delivered, but that has not yet arrived. This story will be updated as warranted.
Rapidly sketching-out the strategic plan for LaunchTN that is coming together, Brock said his gameplan for raising the state's entrepreneurial rankings is likely to include not only the traditional tallies of in-state capital investment, entrepreneur centers' client traffic and startups served in the course of a given year, but also progress against national yardsticks.
For example, Brock said that by 2022, LaunchTN staff propose raising Tennessee to No. 3 rank on a Kauffman Foundation entrepreneurial index.
It wasn't immediately clear from Brock's verbal presentation monitored via phone which specific Kauffman ranking he was referring to. For example, on Kauffman's recent Entrepreneurship Growth table, Tennessee was recently ranked 10th and on another Startup Activity list, Tennessee ranked 14th, while ranking 21st on Kauffman's Mainstreet entrepreneurship index.
Updated: A LaunchTN spokesperson said after original publication of this story that ranking results in the above-mentioned three indices would be averaged to determine Tennessee's standing and progress. The landing page for the indices is here.
Brock also said that his team believes Tennessee can rise to 15th rank in Venture Capital assets under management; can increase Angel investor ranks dramatically; and, with proper resources to pursue it, could become the most productive state in the Southeast in terms of commercializing research-spawned intellectual property.
It should be noted that, although common in entrepreneurial development circles, none of those measures correspond with the metrics that Gov. Bill Haslam emphasized during his November budget hearing for ECD: raising Median Household Income in Tennessee and creating net-new jobs. Related story here. On the MHHI front, Tennessee has for years continued to rank in the mid- to lower-40s rankings of states.
On the Angel investor dimension, Brock mentioned a statewide target of 750 active angel investors statewide.
That would mean at least a 50 percent increase of active Angels, if the truly active Angel population statewide here is no more than 500, as widely believed. It is also generally believed that Tennessee has ample households in which there are accredited investors, and efforts should be made to bring more Angels in from the sidelines.
Brock also offered in rapid-fire manner a menu of possible initiatives that including creating or enlisting alternative financing services providers, such as San Francisco-based Kiva, the lending crowdsourcer.
Another tactic suggested today by Brock -- creation of the state's own Tennessee Innovation Index ranking -- might allow the state partly to direct attention away from other rankings.
Brock and some board members made clear during their discussion today that defining and adequately funding the next phase of LaunchTN's action agenda is of growing importance.
Reasons cited included not only competitive liabilities, such as the talent shortage, but also the need to capitalize on recent momentum in Tennessee's entrepreneurial sector.
The realpolitik of state funding also reared its head. Several acknowledged during the board discussion this afternoon that stepped-up effort on the budget front is essential in the current policy environment, particularly given that the agenda-setting role of Tennessee Governor is up for election grabs this fall, with Gov. Haslam passing the baton to a successor whose views are difficult to predict.
Bob Rolfe, who became ECD commissioner about a year ago and is also chairman of the LaunchTN, praised the relatively small LaunchTN staff for their achievements and effort, but also sounded a sobering note.
Rolfe recalled that the Haslam Administration had (in 2011) set a goal of making LaunchTN both stronger and truly self-sustaining, i.e., much less reliant on ECD and State Government generally as a funder of first resort.
While a great deal has been achieved, Rolfe said, LaunchTN remains dependent on state funding.
Equally important, said Rolfe, is the reality that many members of the General Assembly may have lost their appetite for funding entrepreneurship and stimulating investment.
That well may have been poisoned, he seemed to say, by what some (including the State's Comptroller of the Treasury) have judged to be the state's failed experiment in capital formation -- the TNInvestco venture-capital program, which was in 2009 funded with $200MM in what would otherwise have been state tax revenue from the insurance sector.
"It's a tough one," Rolfe added.
LaunchTN Board Member Emeritus Tom Ballard, an executive with Knoxville-based PYA and a retired former senior exec with both the University of Tennessee and Oak Ridge National Laboratory, today warned that he believes budget requests for entrepreneurship, tech commercialization and the like face tough sledding partly because of a philosophical fault-line that divides those who believe government has a role in fostering business and the economy, and those who believe such things should generally be left to the private sector and, presumably, the invisible hand of the marketplace.
On Feb. 6, Launch Tennessee is collaborating with Life Science Tennessee and other trade organizations to conduct a series of Day on the Hill activities, partly to fulfill its obligation for annual reporting to the legislature and partly to build contacts and support for sustained support of the entrepreneurship sector. VNC
. last edited 0554 26 Jan 2018