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Tennessee reflections on PitchBook list of 'World's top startup cities'
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NASHVILLE and other Tennessee cities all failed to join 20 U.S. cities that were included in PitchBook analysts' latest ranking of 50 cities that represent the "top startup cities" worldwide as of Q1 2014, according to data the publisher's analysts gathered for a period ending in Q1 2014.

As VNC reported in October 2023, Nashville and other up-and-coming Tennessee metro areas had previously failed to grab a rung within the publisher's inaugural Global VC Ecosystem Rankings.

Despite the not-so-surprising results of the latest series of global rankings, the real treat for Music City lies in its data having been subject to rigorous independent review by PitchBook analysts, and the publisher then honoring VNC's request for Nashville's previously unpublished raw scores.

Each city that received fullest scrutiny was scored on "Development" and on "Growth."

The PitchBook analysts' report published April 18 explained that Development scores for cities are derived from gauging two criteria: size and maturity.

They added, "To measure size, we have analyzed inputs including but not limited to VC deals, exits and fundraising activity. When assessing the maturity of an ecosystem, emphasis is placed on the ability of startups based in the city to secure capital, grow, exit and create outliers*."

Ultimately, the latest assessment showed the Nashville's venture-capital ecosystem's "Development" score edged downward to 27.0 from its 2023 rating of 27.6.

Nashville, Music City

In contrast, along the "Growth" dimension, the Nashville ecosystem's score moved from 34.9 to 49.0, based on the analysts' review of data related to such considerations as "short-, medium- and long-term growth momentum regarding VC deal, exit and fundraising activity across the past six years."

So far, those metrics have failed to win Nashville a place among 49 other peers.

Beyond that, whether or not one thinks we should care about besting Atlanta, Austin, Raleigh, et al, surely some readers who scan the list will emerge certain that more than one of the winners is sitting in Nashville's seat.

While Pitchbook's analysts named 20 other U.S. cities among the globe's 50 leading ecosystems, Nashville data actually did receive full examination, though the city fell short of what was needed to make the leaderboard.

Instead, the 20 U.S. cities that made the latest Pitchbook list of 50 published in April 2024 were Atlanta, Austin, Boston, Chicago, Dallas, Denver, District of Columbia, Houston, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Phoenix, Portland, Raleigh, Salt Lake City, San Diego, San Francisco, Seattle.

VNC research indicates PitchBook venture-ecosystem reporting continues to evolve, and no firm schedule for further updates has been disclosed.

Reports by PitchBook and others may provide ecosystem builders fresh perspective for long-range planning.

It's proper to acknowledge here that -- quite apart from the Covid-19 pandemic and other stressors -- in the past few years, Tennessee's industrial and economic development reputation has been bolstered by news of immense investments here by Ford Blue Oval, Oracle, xAI and by the State of Tennessee.

Moreover, particularly during the past 25 years or so, Tennessee's technologies-driven innovation sector has been incrementally spurred by initiatives taken during the administrations of Governors Phil Bredesen, Bill Haslam and Bill Lee.

The impact of their efforts has been dramatically heightened by federal initiatives that included, but were not limited to the auspicious U.S. Treasury's State Small Business Credit Incentive (SSBCI) rounds of 2010 and 2020. (Tennessee's SSBCI 1.0-2.0 programs may well have been embraced more effectively as a result of the controversial, costly and galvanizing program known as TNInvestco.)

Lindsey Cox

Another important actor is Tennessee Technology Development Corporation dba Launch Tennessee (LaunchTN), which is led by President & CEO Lindsey Cox, and is a nonprofit public-private partnership sponsored by Tennessee Economic and Community Development (ECD).

LaunchTN recently reached a milestone of 26 years of continuous operation. Its first full calendar year of operations was 1999, after being registered as an entity in 1998, pursuant to action in 1997 by Gov. Don Sundquist and the Tennessee General Assembly.

Stuart McWhorter

SSBCI 2.0 funding is proving to be a major accelerant for initiatives by LaunchTN, which is overseen by the LaunchTN board chaired by state ECD Commissioner Stuart McWhorter.

However, LaunchTN has on several occasions signaled it needs greater funding to make the most of opportunities to advance key facets of the state's economy, with emphases including providing connective tissue for entrepreneurs and fund managers who seek investors, and on working to ramp-up corporate and institutional spending for technology transfer and commercialization within the state.

In-line with that, on May 30 ECD Commissioner McWhorter told conferees of the Tennessee Valley Corridor National Summit that during the next two years he'll be intensifying ECD's focus on getting a greater share of corporate R&D spending done in Tennessee, rather than in other states.

McWhorter noted that related efforts are already underway in the Mobility sector, with a multi-sectoral ECD initiative soon-to-unfold.

See our VNC's earlier report on a related study of Tennessee's laggard performance here.

TN ECD's key performance indicators are laid-out here. The LaunchTN subset of KPIs is here. LaunchTN's 2022 990 is here.

Also of interest: Pitchbook's 2023 report on the record of Vanderbilt University graduates associated with startups.

* Outliers are the focus of resources here: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 VNC

. last edited 0542 13 June 2024

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Tags: Launch Tennessee, LaunchTN, Lindsey Cox, PitchBook, Stuart McWhorter, Tennessee Technology Development Corporation, TTDC

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