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TNInvestco funds still had $84 Million dry powder at year-end 2011, ECD says
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Bill Hagerty
ECD Commissioner

The state's TNInvestco-supported venture-capital funds had deployed roughly $55.3 million for 76 firms by year-end 2011, according to a report posted today by the program administrator, Gov. Bill Haslam's department of economic and community development (ECD).

By last New Year's Eve, that meant TNInvestco's still had approximately $84MM available for future commitments. At the end of 2010, TNInvestco's had invested $35.9MM, according to the report for that year.

New fulltime-job creation claimed by the TNInvestco's totaled 234, with total (new and retained) employment among portfolio firms reported to be 751.5, the later figure including 270 jobs filled by minorities and women, the funds said.

Raw jobs-creation is disputed by some observers as a poor, even misguided barometer of success for private-equity investment, particularly in early-stage investment; however, that metric was among key points in the argument for creating TNInvestco, when the General Assembly passed bipartisan enabling legislation, subsequently signed by then-Gov. Phil Bredesen.

As was true in a report produced by VNC at midyear in 2011, Tennessee Community Ventures led the TNInvestco's in deployment of capital, at $7.1MM. It produced the lowest number of new jobs per million deployed, at 1.97. Council & Enhanced's 13.16 jobs per million deployed led the pack.

Some TNInvestco fund received their TNInvestco insurance-premium tax credit allocations later than others, creating a staggered start. Each fund converted its $20MM credit allocation into about $14MM available capital, which translates into $140MM for overall TNInvestco program investment.

ECD Commissioner Bill Hagerty has in recent months -- seldom with any direct reference to TNInvestco, per se -- made clear he places some priority on recruiting additional private capital to Tennessee.

Hagerty also chairs LaunchTN (Tennessee Technology Development Corporation), which administers the governor's $30MM co-investment program. LaunchTN yesterday announced its latest co-investment allocations, here.

The TNInvestco funds collectively reported they have attracted $97.2MM in "follow-on capital" from other sources, a figure 1.76 times the total TNInvestco capital thus far invested.

Follow-on capital reported by C&E, which is the TNInvestco affiliate of Council Capital in collaboration with Enhanced Capital was greatest, at $27.5MM, according to the report. Tennessee Angel Fund, Solidus, Limestone and TriStar Technology Fund followed closest behind C&E. (Enhanced's executives had, in alliance with St. Louis-based Advantage Capital, introduced via General Assembly sponsors proposed legislation that proved the precursor to an improved TNInvestco program.)

There are 10 TNInvestco's at this time, with eight of those domeciled in Middle Tennessee, though one, Solidus, also conducts complementary programs in other state regions. Here are the 10, as well as the original 2009 list of 25 qualified firms.

Click here for the full reports for 2010 and 2011, as well as ECD's latest postings of TNInvestco funds' letters reporting their most recent commitments to qualified companies. Further VNC reporting on TNInvestco, here.VNC


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Tags: Advantage Capital, Bill Hagerty, capital formation, Council and Enhanced Tennessee Fund, economic development, employment, Enhanced Capital Partners, Gov. Bill Haslam, INCITE, Innova Fund II, investment, jobs, Limestone Fund, Memphis Biomed Ventures Tennessee I, NEST-TN, Solidus-TNInvestco, Tennessee Angel Fund, Tennessee Community Ventures Fund, TNInvestco, Tri-Star Technology Fund, venture capital, XMi High Growth Development Fund

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