Description
This particular detailed information regarding annual report to governor and general assembly november 2014.
Annual Report to Governor and General Assembly
November 2014
Created under legislative statute as Tennessee Technology Development Corporation,
now doing business as Launch Tennessee. This organization is funded under an agreement
with the State of Tennessee.
Tennessee Launch
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Dear Governor Haslam and Members of the Tennessee General Assembly:
I am pleased to present this annual report on the developments of TTDC d/b/a Launch
Tennessee over the 2014 fiscal year period, ending June 30, 2014.
As you will glean from the report, it has been a very busy year for the organization as the
team had its first full year together and worked diligently to fulfill our mission to make
Tennessee the number one place in the Southeast for entrepreneurs to start and grow a
business.
We continued to execute on several existing initiatives as well as launched several new
programs in our key focus areas of entrepreneurship, capital formation, commercialization
and outreach. Additionally, we initiated our corporate engagement program, which we see
as a key opportunity to drive impact across each of the focus areas.
Some of the new programs were the TENN master accelerator program, which included a
statewide Demo Day and road trips across the state and to Silicon Valley and New York to
showcase some of the top companies from our regional accelerator program; the Launch
Tennessee Fellows program which paired promising technologies from UTRF with graduate
students who worked diligently on commercialization plans; the Healthcare Connections
program, where emerging companies in the industry presented their businesses to corporate
“connectors” and investors; and finally, our Blackstone Specialists program, which paired 27
interns from across the state and country with five of our summer accelerator programs. Each
of these programs has met with great success and we will be expanding them in the year
ahead.
Additionally, we continued several initiatives that were launched in 2013, including our
Southland Conference that drew over 700 attendees, 70 investment firm representatives, and
over 300 applications from startups across the country; and the “Venture Match” series
pairing entrepreneurs, investors and academics in different parts of the state.
We also opened the third and final tranche of the INCITE Co-Investment fund. We invested
$4.2 million across 19 deals during FY2014, matching $14 million of private investment,
representing a total of over $18 million of capital in Tennessee companies. Finally, in an effort
to become partially self-sustaining, the organization raised over $1,000,000 of non-state
capital during FY2014, eclipsing the goal of $500,000 by over 200%.
We look forward to building on the momentum generated in 2014 to serve the entrepreneurs
and other citizens of our great state. Your support, as well as that of ECD and our board,
chaired by Commissioner Hagerty, makes this success possible.
Sincerely,
Charlie Brock
President and CEO
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Launch Tennessee Organizational Structure
Created by the Legislature in 1998, Launch Tennessee is similar in structure to many other
statewide technology-based economic development organizations in the United States.
Specifically:
• Launch Tennessee is a private, not-for-profit 501(c)(3) corporation created by the
state.
• As a public/private partnership, Launch Tennessee can enter into certain transactions
that a government agency cannot, such as financially supporting private sector non-
profit entities and for-profit businesses.
• The organization’s governance systems (with 15 of its 22 board members appointed
by government officials) and the organization’s partial reliance on state funding for
operations provide an effective system of checks and balances to ensure
accountability to state government for its operations.
Mission
Statute defines the mission of Launch Tennessee:
a) To contribute to the strengthening of the economy of the state through the
development of science and technology; and
b) To promote the development of Tennessee businesses by supporting the transfer of
science, technology, and quality improvement methods to private and public
enterprises.
In order to clearly capture the mission of developing early stage companies across the
state, Launch Tennessee developed a one-sentence mission statement that is being
used in collateral materials:
“To make Tennessee the No. 1 place in the Southeast for entrepreneurs to start and grow
a company.”
Corporate Governance & Board Committees
Proper corporate governance and oversight at the committee and board level continue
to be a priority for the organization. In addition, Launch Tennessee created operating
committees to help execute against the core mission of the organization. Current
leadership of these committees includes:
Executive (Core Committee) - Chairperson: Commissioner Bill Hagerty
Governance (Core Committee) - Chairperson: Commissioner Bill Hagerty
Audit (Core Committee) - Chairperson: Bruce Doeg
Capital Formation (Operating Committee) - Chairperson: Frank Williamson
Commercialization (Operating Committee) - Chairperson: Brian Debusk
Entrepreneurship (Operating Committee) - Chairperson: Marci Harris
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Launch Tennessee Operations Overview & FY 2014 Highlights
This report summarizes the innovation-based initiatives that Launch Tennessee and our
network of partners manage in support of the state’s broader economic development
agenda. The following categories represent the current focus of the organization.
1. Entrepreneurship: Nine regional entrepreneurial accelerators across the state
provide Tennessee entrepreneurs with mentoring, education and training,
strategic and technical support, and assistance identifying sources of capital.
2. Capital Formation: Launch Tennessee oversees Tennessee’s $30 million INCITE Co-
Investment Fund and works to connect entrepreneurs with various capital sources
including angel networks/funds and venture capital investors.
3. Commercialization: Launch Tennessee has implemented SBIR and STTR support
programs for early-stage companies and manages the Venture Match and
Fellows programs across the state in order to connect entrepreneurs, investors, and
academia.
4. Outreach: Launch Tennessee’s outreach operations target both in-state and out-
of-state stakeholders, including sponsoring innovation-focused events across the
state and positioning the organization’s annual conference as one of the top
innovation conferences in the region and country.
5. Corporate Engagement: Corporate engagement is a vehicle to drive innovation
across all Launch Tennessee focus areas. Specific opportunities to engage
include: the accelerator network, The Connection program, Reverse Pitch, INCITE
Co-Investment Fund and access to deal flow.
Launch Tennessee is ideally positioned to support the state’s innovation economy
through statute established by the General Assembly and supported by state leadership.
With the full support and confidence of state leadership, our organization will continue to
facilitate a strong innovation economy and help make Tennessee a leading state for
high-quality jobs and long-term economic prosperity.
2014 Accomplishments and Milestones Summary
During the past year, Launch Tennessee has demonstrated significant progress in
advancing its core program areas of entrepreneurship development, capital formation,
commercialization and outreach. Key accomplishments include:
Organization-wide
• Raised $1.03M in an effort to become partially self-sustaining
• Continued board-level operating committees to serve as advisors on key program
areas
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Entrepreneurship Development
• Secured sponsorship from UBS for the 2014/2015 TENN programs, including $150,000
and multiple levels of engagement
• Accelerated 70 companies through the statewide regional accelerator network
• Regional accelerators hosted over 400 entrepreneurial events, engaged over 400
mentors and screened over 1,400 companies
• Over $29 million in capital raised by accelerated startups
Capital Formation
• Invested over $4 million in capital to high-growth Tennessee companies through the
INCITE Co-Investment Fund and leveraged an additional $14 million in private capital.
• Promoted the development of angel funds / groups across the state
• Facilitated numerous connections between entrepreneurs and investors across the
state
Commercialization
• Organized 15 SBIR/STTR workshops, with over 350 attendees
• Assisted 10 companies with SBIR/STTR grant submissions and achieved a 33%
success rate
• Hosted five Venture Match events across Tennessee
• Launched the Fellows Program with the University of Tennessee and University of
Tennessee Research Foundation
Outreach
• Helped organize events for Global Entrepreneurship Week (powered by the
Kauffman Foundation) that resulted in over 70 entrepreneurial and innovation
focused events
• Attendance at our annual entrepreneur conference, Southland, grew to over 700
attendees, which included 35 top startups from across the country, over 70
investment firms and industry experts from around the country
• More than 250 stories were published in a variety of outlets, including the Wall Street
Journal, VentureBeat, Entrepreneur as well as the the major newspapers across
Tennessee
Corporate Engagement
• Formalized corporate engagement as one of the organization’s program areas.
• Developed a Healthcare Connection series with Pershing, Yoakley & Associates (PYA)
that included a total of 17 presenting early-stage companies and 60 corporate,
investor and supporter attendees
• Hosted five Verizon Wireless sector experts in Automotive, Healthcare, Manufacturing
and Smart Grid/Utilities for sessions with 35 entrepreneurs and specialists
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Entrepreneurship Development
Launch Tennessee has been working diligently with all nine regional entrepreneurship
centers to further enhance Governor Bill Haslam’s Jobs4TN Strategy. The nine regional
centers serve as the front door for entrepreneurs as they connect them with resources
necessary to start and grow their business. Resources may include mentors, investors,
industry experts, existing corporations and other entities providing entrepreneurial
support. These are the core components needed to build a thriving entrepreneurial
ecosystem to drive high-growth companies.
Highlights from the year include:
• The first TENN class graduated in February, where Governor Haslam &
Commissioner Hagerty presented a $25,000 check to Vendor Registry for gaining
the most traction after solidifying a pilot contract with Microsoft. Teams that
graduated from one of Tennessee’s statewide accelerators were eligible to
compete for a spot in The TENN during a statewide Demo Day. Ten companies
were selected from Knoxville, Chattanooga, Memphis, and Nashville, focusing on
industries such as medical device, consumer goods, B2B platforms and
healthcare.
• Launch Tennessee launched the first Specialist Program, an internship program
that introduces entrepreneurship in Tennessee to students. There were 27 Specialist
placed in 5 accelerators across the state from schools such as Vanderbilt,
University of Tennessee, University of Memphis, Sewanee, Columbia, Emory, North
Carolina State, Georgia Tech, and Rhodes. These students supported both
program directors and companies throughout the 13-week boot camp cohort
programs. The program resulted in one student being hired by a company, one
hired to work for the accelerator, and three continuing to support the companies
on a contract basis.
• For FY2014, 70 companies participated and graduated from regional accelerator
programs across the state. These 13 week boot camp cohort programs focused on
a variety of industries including healthcare, smart grid technology, medical
device, 3D printing/additive manufacturing, digital media and automotive.
• Launch Tennessee has engaged UBS as The TENN presenting sponsor for the 2014
and 2015 programs. As UBS expanded its presence in Nashville and in other
Tennessee markets, the firm sought an opportunity to fulfill its Elevating
Entrepreneurs corporate initiative on a statewide basis. In addition to the $150,000
financial contribution, UBS is supporting The TENN with its human capital. Through its
investment banking, wealth management and asset management business lines,
the firm will offer access to its advisors and client portfolio, aligning specific
expertise and resources with our TENN teams’ critical needs.
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Strong leadership of the regional accelerators is crucial. Below is a summary of the
Executive Directors and locations for each accelerator:
Accelerator Name Executive Director Location
AccelNow John Campbell Johnson City, TN
Knoxville Entrepreneur
Center
Jim Biggs Knoxville, TN
The Company Lab Mike Bradshaw Chattanooga, TN
The Biz Foundry Jeff Brown Crossville, TN
Nashville Entrepreneur
Center
Michael Burcham Nashville, TN
Southern Middle TN
Entrepreneur Center
Dan Marcum Tullahoma, TN
Northwest TN
Entrepreneur Center
Carol Reed Martin, TN
Southwest TN
Entrepreneur
Development Center
Ben Ferguson/ Ben Harris Jackson, TN
Greater Memphis
(Start Co. / ZeroTo510)
Eric Matthews/ Allan Daisley Memphis, TN
Regional Metrics July 2013 - June 2014
July 2013-June 2014 Events Screened
Accelerated
(Cohort
Graduates)
Capital
Raised Jobs
Northeast TN- AccelNow 8 41 0 1,800,010 9.5
Southeast- The Company Lab 71 166 17 10,197,500 24.5
Southern Middle TN
Entrepreneur Center
16 91 9 193,500 14
Southwest TN Entrepreneur
Development Center
22 56 0 N/A N/A
East- Knoxville Entrepreneur
Center
45 94 5 3,100,000 7.5
Upper Cumberland – The Biz
Foundry
21 50 0 320,000 7
Northern Middle-Nashville
Entrepreneur Center
143 689 21 10,400,000 50
Greater Memphis
(Start Co. / ZeroTo510)
58 139 11 2,665,000 15.5
Northwest TN Entrepreneur
Center
34 93 7 452,500 5
Total:
418 1419 70 29,128,510 133
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Capital Formation
INCITE Co-Investment Fund
The INCITE Co-Investment Fund is a venture capital program that is a key component of
Governor Bill Haslam’s $50 million INCITE (Innovation, Commercialization, Investment,
Technology and Entrepreneurship) initiative to raise Tennessee’s profile in innovation-
based economic development and increase the number of knowledge-based jobs in
the state of Tennessee. Designed by ECD, and administered by Launch Tennessee, the
Fund is backed entirely by a $29.7 million award through the U.S. Department of
Treasury’s State Small Business Credit Initiative. During Fiscal Year 2014, the Fund invested
over $4.2 million in capital to early-stage high growth companies in the state of
Tennessee. Funding is provided to Approved Investors and Qualified Businesses on a first-
come, first-serve basis. A summary of the investment activity is listed below.
Investment Eligibility
The types of companies which Launch Tennessee's INCITE Co-Investment Fund invests in
include primarily technology-enabled businesses with scalable growth profiles. These
companies can be as diverse as restaurant order management systems to health care IT
companies that produce electronic medical records. An eligible business must receive
equity or preferred equity investment of at least $300,000 to qualify. Each of the investors
must be accredited, and at least one investor must have assets under management of
$15 million and a track record of investing at least $5 million in the types of businesses
that would qualify under the program guidelines (www.launchtn.org).
Deal Volume/Activity
During Fiscal Year 2014, Launch Tennessee's INCITE Co-Investment Fund invested
approximately $4.2 million, matching $14 million of investment, representing a total of
approximately $18.2 million of equity and preferred equity investment in 19 deals across
the state.
Fiscal Year 2014 INCITE Fund Investment Summary
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Molecular Sensing #2 Healthcare Tri-Star Technology 07/19/13 $300,000 $150,000 $450,000
iCitizen/ Citizengine #2 Digital Media Harry Rudolf Jacobson 07/19/13 $500,000 $250,000 $750,000
Streamweaver #2 Digital Media TNCV 07/19/13 $320,000 $160,000 $480,000
Overdog Digital Media TNCV 07/19/13 $300,000 $150,000 $450,000
MedCenterDisplay Healthcare Tri-Star Technology 07/23/13 $1,000,000 $500,000 $1,500,000
Senior Living Healthcare NEST-TN, LLC 07/19/13 $375,000 $187,500 $562,500
Diagnovus Healthcare Limestone Fund, LLC 07/23/13 $1,000,000 $500,000 $1,500,000
Molecular Sensing #3 Healthcare Tri-Star Technology Fund 10/30/13 $1,000,000 $500,000 $1,500,000
Consensus Point #2 Technology NEST-TN 11/29/13 $249,640 $62,410 $312,050
Auramist #2 High Tech Solidus Company, LP 12/11/13 $1,000,000 $250,000 $1,250,000
Quire #2 Healthcare Tri-Star Technology 12/11/13 $999,600 $249,900 $1,249,500
iCitizen/ Citizengine #3 Technology Harry Jacobson 12/20/13 $713,875 $178,469 $892,343
Logogarden Technology FCA Venture Partners V 12/11/13 $600,000 $150,000 $750,000
Hubble Telemedical Healthcare MB Ventures 02/04/14 $325,000 $75,000 $400,000
iCitizen #4 Technology Harry Jacobson 03/20/14 $609,999 $152,500 $762,499
US Biologic Healthcare XMi 02/04/14 $500,000 $125,000 $625,000
SIGNiX #2 Technology ProNvest, Inc. 03/31/14 $1,200,000 $240,000 $1,440,000
LiveSchool Technology/ NCN 04/17/14 $622,819 $122,500 $745,319
Molecular Sensing # 4 Medical Tri-Star Technology Fund 06/12/14 $2,400,000 $270,000 $2,670,000
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Current Approved Investors
Tri-Star Technology Fund, LLC Bone Blankenship Partnership
Meritus Ventures, L. P. MedCare Investment Fund III, Ltd.
Solidus-TNInvestco, LLC MedCare Investment Fund IV, Ltd.
Nest-TN, LLC Stephen Edward Young
Solidus Company, LP Tri-Star Technology Fund II, LLC
CP Investment Partners Scott R. Jeffery
NEST-USA, L.P. Senior Living Acquisition Corp, LLC
Tennessee Angel Fund, LP Limestone Fund, LLC
NCN Angel Fund I, LP Charles Kenton Kirby
XMi High Growth Development Fund LLC Robert Lemuel Kirby
Michael D. Shmerlings Partners G.P. Jewell Martin Hale
Battelle Ventures, LP Envest III, LLC
Ninth Avenue South Investments III, LLC Burtonwood Capital, LLC
Hatteras PTI, LLC Harding Holdings Inc.
Tennessee Community Ventures Fund LLC JRI Ventures LLC
Legacy Investments, LLC FCA Venture Partners, IV, LP
Landman Family Limited Partnership Tuna Investments, L.C.
Innova Fund II, LP Benjamin Cullen Bryant, Jr.
Joseph A. Hollingsworth, Jr. James H. Barton Jr.
Chrysalis Ventures II, LP T.M. Hederman Trust
Kevin Michael McNamara William Brian Reames
Lee Daniel Hammond Paul Gregory Hagood
Peter Samuel Brodsky Pittco Capital Partners IV, LP
Fred Curtis Goad, Jr Richard E. Ruth
Jimmy Dale Kever RAG Family Trust
Germain Boniface Boer Charles Gerber 2012 Family Trust
Herbert Allen Fritch Christopher Michael Kelly
Lawrence L Davis Steve Gerard Fridrich
Council Capital II, L.P. Leon May Trust I
Council & Enhanced Tennessee Fund, LLC Hunter Hillenmeyer
ProNvest, Inc. Memphis Biomed Ventures
SNB Investments Ezra Uzi Yemin
Michael Duncan Dashiff Michael J Hills
MedCare Investment Fund V, L.P. MGC Venture Partners 2013, L.P.
Harold Rudolf Jacobson FCA Venture Partners V LP
Matthew Robert Hafer Stephen Gregory Butler
Richard Theobald Intersouth Advisors, Inc.
Relevance Capital III, L.P.
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Commercialization
Launch Tennessee has incorporated dedicated resources this past year to several
elements of commercialization-related programming, including SBIR/STTR outreach,
continued support of entrepreneur/inventor/investor matching, and a new Fellows
program. These efforts continue to be in pursuit of success in four areas:
• Increasing the amount of venture capital raised by Tennessee companies;
• Increasing the number of start-ups based on intellectual property from research
institutions in Tennessee;
• Increasing the number of licenses to Tennessee companies from research
institutions in Tennessee; and
• Increasing the number of SBIR/STTR awards to Tennessee companies.
SBIR/STTR Support
Launch Tennessee believes that SBIR/STTR awards are an under-tapped resource for
Tennessee companies. The goals in this area are to increase the total amount of
SBIR/STTR funding to Tennessee companies, to increase the number of quality firms
pursuing and winning these awards, and to support Phase I winners in becoming Phase II
winners.
During the year, Launch Tennessee utilized the services of Mark Henry of Grow Emerging
Companies, LLC, a nationally renowned SBIR consultant. Henry provided the following
services to the Phase 0/00 program awardees:
• Identification and evaluation of potential SBIR/STTR opportunities;
• Expert proposal writing, editing, and production assistance;
• Assistance with the market research necessary to develop a compelling
SBIR/STTR commercialization story for successful Phase II awards; and
• Assistance in identifying and engaging collaborators required for R&D/business
credibility as well as potential Phase III private-sector partners;
Note that Mark Henry's support was provided in part by a FAST grant awarded to Launch
Tennessee by the SBA for the second consecutive year.
Grow EC assisted in the submission or continues to assist ten (10) new Phase I SBIR/STTR
applicants (representing nine different companies) during the fiscal year. Of these ten
(10) applicants, five (5) submitted grants to the National Institute of Health (NIH), four to
the National Science Foundation (NSF), and one to the Department of Defense. The
table below summarizes the results of the Launch Tennessee 2013-2014 program as of
6/30/14, with data from previous years as a benchmark.
The potential economic impact with successfully funded proposals would total
approximately $675K (including one of the ten submissions still to be reviewed). Note
that one of our clients in 2013-2014, VDDI Pharmaceuticals in partnership with Vanderbilt
University, has already won a large drug discovery Phase I STTR grant of $375K from NIH.
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Given his expertise in grant writing, Dr. Stefansic will continue to assist Mark Henry in the
review of the outstanding NIH proposals.
Table 1: SBIR/STTR Phase 0/00 program results in Tennessee since its inception in 2008
Year Number of Submissions Success Rate
2008-2010 !30 (all Ph1) 17% (!5/30)
2010-2011 (pilot) 18 (12 Ph1, 6 Ph2) 33% (6/18)
2011-2012 13 (7 Ph1, 4 Ph2, 2 FT) 8% (1/13)
2012-2013 9 (8 Ph1, 1 Ph2) 11% (1/9)*
2013-2014 10 (10 Ph1)+ 33% (3/9)**
*One Phase II – one additional received favorable score and resubmitted in 8/14
+As of June 30th, 2014
**One additional grant received favorable score and will resubmit; one other is not yet
reviewed.
Note that there was a decrease in success rate from 2011 through part of 2013. With the
turnover at TTDC and interruption in funding for Mark Henry in 2011-2012, there was a gap
in grant writing assistance and quality of submissions. Dr. Stefansic has been focused on
attracting academic researchers to increase the quality of submissions. Through plans
developed in our most recent FAST grants submitted and awarded by SBA in both 2013
and 2014, there has been a concerted effort to provide more advanced Phase II grant
writing and commercialization assistance, in particular to support companies that need
to manage their Phase I awards in order to get to Phase II and private investment. In
addition, less money is being spent on the program in order to focus on quality
submissions over quantity.
Launch Tennessee also continued to host a series of SBIR/STTR proposal writing workshops
across the state in conjunction with local partners in major cities and more rural areas.
Workshops in 2013-2014 were conducted in Chattanooga (2 with 48 participants),
Knoxville (3 with 50 participants), Memphis (3 with 60 participants), Nashville (2 with 45
participants), Cookeville (2 with 38 participants), Murfreesboro (1 with 24 participants),
Spring Hill (1 with 10 participants), and Johnson City (webinar with 3 participants). A
majority of the participants were from academic research institutions at Vanderbilt, UT
Knoxville & UT Chattanooga, and University of Memphis. The goal was to attract higher
quality research with investigators capable of successfully writing and executing
technology grant proposals.
In addition these workshops, we provided a five-week specific step-by-step "Getting
Ready to Write" SBIR grant training webinar program to nascent entrepreneurs through
our partners at Grow Emerging Technologies, LLC. Several women-owned businesses
participated in this webinar. Finally, Mark and Catherine Henry and Dr. Stefansic led a
"Managing Phase I to Get to Phase II" workshop in April with 15 attendees, several of
whom are now in our program writing Phase II grants.
In 2015, Launch Tennessee plans to continue to offer Phase 0/00 program support with
Mark Henry, with the following objectives:
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• Support additional proposal writing workshops across the state, with a focus on
attracting participants writing more financially lucrative Phase II or Fast Track
(Phase I & II combined) grant proposals;
• Increase the quality of Tennessee firms participating in the SBIR/STTR programs,
with a focus on attracting early-stage companies based on academic
laboratory research; and
• Develop methods to make Launch Tennessee’s SBIR/STTR support program
financially sustainable within three to four years such that revenue it generates
from grant writing assistance and FAST federal funding covers all of the
program’s costs.
Entrepreneur and Technology Matching
With the intention of strengthening the fabric of relationships among entrepreneurs,
inventors and investors, Launch Tennessee developed Venture Match. This is an
opportunity for entrepreneurs and investors to engage in meaningful conversations with
some of Tennessee’s top innovators and explore the best emerging opportunities in order
to develop new companies, create sustainable jobs, and build value for investors. These
events were first held regionally throughout spring and summer 2013, hosted by
technology transfer offices or similar support organizations in “off-campus” locations.
Since last October, we have held five Venture Match events – one in Nashville in
November, three in East Tennessee throughout the spring, and one in Memphis in April.
The Nashville event was focused on mature technologies or actual small businesses
recently launched from Middle Tennessee universities, the Memphis event was focused
on a variety of technologies both commercialized and in development, and the East
Tennessee series was focused on medical devices (February) / data analytics &
visualization (March) / advanced manufacturing (April). These focus areas reflect areas
of strength from universities and research institutions around the state, as well as areas in
which the private sector has expressed interest in commercialization.
One example of a successful "match" occurred through the Nashville event. Dr. Eliot
Altman from The Tennessee Center for Botanical Medicine Research at MTSU presented
his work on screening of Traditional Chinese Medicine herbs for drug treatment of a
variety of illnesses. He has now partnered with an experienced commercial drug
development specialist who recently moved to Franklin, TN and attended the event
representing his new company. MTSU and this company are in the process of a licensing
agreement to push the technology into a new partnership in Middle Tennessee.
The relationship aspect building of Venture Match will be supplemented by Launch
Tennessee’s outreach efforts to venture capital and private equity firms that concentrate
in the state’s core research competencies and the various technology transfer offices
across the state.
In the future, both the Venture Match series and "road show" events of technologies out
of our labs and universities will help Launch Tennessee evaluate how best to match
entrepreneurs to technologies and investors and to incorporate those best practices into
additional programming initiatives.
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Fellows Program
In recognition of our state's institutional intellectual property strengths and the potential
for commercialization as a path toward entrepreneurship, Launch Tennessee piloted a
Fellows Program with UT and UTRF this past summer through the end of 2014.
This program matched graduate students in Business and/or Law with UT researchers that
have relatively mature technologies with potential market applications. As research
continues inside the laboratory, the market research and business plan will develop
outside the laboratory.
Launch Tennessee provided a summer stipend for the three Fellows chosen in a
competitive process along with mentorship from Dr. Stefansic. The Fellows worked closely
with UT faculty researchers and graduate students to determine the market viability of
the technology and its best path forward in the marketplace. The Fellows have
developed a business plan, investor pitch deck, and full financial model for each of the
technologies under review. Below is a summary of the three projects and Fellows:
• "Improved Nasal Cannula" [John Horton, JD/MBA candidate 2015] – this device
was conceived by Dr. Chris Stephens from the Institute of Biomedical Engineering
and several neonatologists (Drs. Mark Gaylord & Dr. Vichien Lorch) from the UT
Medical Center in Knoxville. During the summer, John developed a clinical
investigation plan and business plan that would focus on licensing this technology
and other similar products covered by the intellectual property to a manufacturer
and distributor. Dr. Stephens is applying for a UTRF Technology Maturation Grant to
build the first prototypes and begin the clinical investigation developed.
• "Neuromorphic Computing" [Adam Holdsworth, MBA candidate 2014] – this
technology was conceived by Drs. Doug Birdwell and Mark Dean, along with NSF
graduate fellow Katie Schuman. Based on considerable conversations with the
inventors, Adam developed a very detailed financial model that can be
replicated with short business plans to potential strategic partners such as
Qualcomm or Google, which would pay a start-up with the right expertise led by
the individuals above R&D fees to develop specific applications. Work is in process
using connections from Dr. Dean, a former IBM executive, to present these short
business plans to strategic partners in early in 2015.
• "Thermofield, Inc." [Ryan Kemp, JD] – this inexpensive but highly innovative
technology which involves the use of high temperature heat to treat cancer has
been developed by Thermofield and their partner at Tennessee Technology
University. The technology is quite mature and ready for investment based on
successful animal studies done at Lincoln Memorial University in Knoxville, Ryan has
developed a complete business and financial plan for angel investors that would
allow the technology to be sold in the veterinary market then more globally in low
to middle income countries such as India. With this business plan, Thermofield has
made the finals of the Global Action Challenge with a $1MM investment prize and
also the semi-finals of the US Dept. of State India-US partnership grant competition.
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Outreach
The long-term goal of Launch Tennessee’s outreach plan is to position our state as the
southeastern region’s #1 location for entrepreneurs, investors and innovators. By
partnering with various organizations around the state, Launch Tennessee will host or
partner to create world-class events that bring together entrepreneurs, corporate
leaders, researchers and investors from across the country.
Southland – “Southern Culture & Technology”
Launch Tennessee’s principal activity in its outreach business segment is its annual
conference focused on entrepreneurship and southern culture. The 2
nd
annual event
took place on June 9-11 in Nashville, TN at Marathon Music Works.
Southland featured venture capitalists and angel investors from across the country
along with an extensive lineup of speakers and panelists with a firsthand knowledge
of the power of innovation and its ability to transform a region’s ecosystem. Speakers
included Former Vice President Al Gore (Co-Founder, Generation Investment
Management), Andy Dunn (CEO & Co-Founder, Bonobos), Bill Ready (CEO, Braintree),
Aaron Levie (CEO & Co-Founder, Box) and Phil Libin (CEO, Evernote).
Other key elements of the 2014 Southland were:
• Over 700 attendees were in Nashville for the 2.5-day conference
• Over 70 investment firms were represented
• Conference media coverage generated over 100 stories reaching over 170 million
people, with a PR/marketing value of over $554,000.
• Southland Village featuring 35 high-growth startups from across the world
• Three nights of entertainment featuring musical acts brought in part through
partnership with AC Entertainment, the creators of Bonnaroo
• Samplings of southern culture featuring local restaurants, distillers, artisans and
musicians.
Sponsored Events / Global Entrepreneurship Week
A big part of Launch Tennessee’s outreach plan consists of a sponsorship program aimed
at providing support to entrepreneur-focused events happening across the state. Some
of the notable 2014 sponsored events included:
• Will This Float? CO.LAB, Chattanooga’s accelerator, hosts an annual business pitch
competition that showcases up-and-coming startup ideas in the Chattanooga
area. The four previous winners of this event have raised over $5 million in private
Angel and VC investment.
• Life Sciences Tennessee Annual Conference: Life Science Tennessee hosted its
2014 Annual Conference featuring national and state speakers from the drug
discovery, medical device, diagnostics, biologics, bio-agriculture and venture
capital industries.
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• Startup Day – Knoxville: Startup Day brings together businesses and entrepreneurs
looking for the next big idea and investors looking for new startup opportunities,
businesses offering services to startups and small businesses, regional accelerators,
research institutions and East Tennesseans interested in learning what all the
excitement is about.
• Global Action Summit: The Summit is an annual event held in Nashville, Tennessee
to address major innovation-based opportunities that create abundance. It is
presented by the Global Action Platform, which works to advance social
leadership, invest in innovation and new businesses and focus on the intersection
of food, health and prosperity.
Global Entrepreneurship Week took place Nov. 18-22, 2013. This Kauffman Foundation
initiative takes place across six continents and is designed to inspire people to embrace
innovation, imagination and creativity. Launch Tennessee worked with over 40 partner
organizations to bring together resources that resulted in 75 events being hosted across
our state.
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Marketing & Communications
Launch Tennessee considers itself to be the marketing arm for Tennessee’s
entrepreneurship efforts. For FY2014, more than 250 stories were published about Launch
Tennessee and Tennessee’s entrepreneurs. These stories were featured in statewide,
regional and national publications including The Wall Street Journal, VentureBeat,
Entrepreneur, The Tennessean and major daily newspapers across the Southeast. Launch
Tennessee also sends out a daily news briefing (called Daily Clips) to more than 500
people and a monthly newsletter to more than 2,000 people.
Launch Tennessee’s continued marketing and communications goal is to create a
steady drumbeat of positive news stories, case studies, and data to help further
Tennessee’s entrepreneurial ecosystem and position Tennessee as the No. 1 state in the
Southeast for entrepreneurship and innovation. Launch Tennessee’s media strategy is
multi-faceted, robust and proactive. Some of our specific audiences and
communication goals include:
• In-state Stakeholders: Building relevance and engagement among key
stakeholders across the state including inventors, investors and entrepreneurs.
• Out-of-State Stakeholders: Marketing to potential investors, startups and
stakeholders outside of Tennessee with the goal having the state identified as one
of the country’s leading innovation and entrepreneurial hubs.
• Industry: Strategically targeting key industry partners in the state to further engage
them in the state’s entrepreneurial and commercialization efforts.
• Data: Developing a baseline of statistics and data that illustrate why Tennessee is
a great place to start and grow a business.
Marketing Highlights
• Rebranding of company logo and marketing materials (Daily Clips and Newsletter
templates)
• Redesign of the Launch Tennessee website (www.launchtn.org) to streamline user
interface and better serve as a robust repository for entrepreneurs.
• Creation of Launch Tennessee media kit that is complementary to our new brand
and enhanced mission.
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Corporate Engagement
In 2014Q1, Launch Tennessee formalized our corporate engagement efforts and created
a director-level position to head the effort.
The corporate community has tremendous resources to offer early-stage companies in
the form of venture investment, beta test sites, strategic partnerships, customer
engagements and mentorship. Conversely, the startup community has incredible value
to offer the corporate world in the form of innovation solutions and workforce talent. It is
this two-way value proposition that drives our corporate engagement strategy.
During FY2014, the Launch Tennessee team undertook a strategic planning effort,
including a deep dive SWOT analysis, 20+ stakeholder interviews and best practices
research of programs around the country. A piece of that plan was to outline a more
strategic approach for Launch Tennessee and for Tennessee startups to engage with
corporate entities. These opportunities to engage include the Accelerator Network, The
Connection and Venture Match programs, a Reverse Pitch-style event, the INCITE Co-
Investment Fund and other in-state deal flow. The Launch Tennessee team began to
explore each of those components in FY2014; several are highlighted below.
• Healthcare Connection series: Launch Tennessee developed a Healthcare
Connection series with Pershing, Yoakley & Associates (PYA). The goal of the series
was to provide healthcare startups an audience with seasoned industry
professionals, both to garner market-driven feedback and to access those
professionals’ networks for introductions to customers and strategic partners. The
series included three programs, one each in Knoxville (January), Nashville (April)
and Chattanooga (June), where a total of 17 early-stage companies presented,
and over 60 corporate representatives, investors and supporters attended. The
entrepreneurs benefited immediately from the attendees’ market-driven
feedback. Over the course of the three-program series, PYA and Launch
Tennessee facilitated 28 follow-up meetings with potential customers, partners and
investors. We are aware of 10 of those connections resulting in on-going
communications. Launch Tennessee is continuing to explore opportunities around
the Connections-style program and leveraging our partners’ networks.
• Verizon Wireless workshop: In June 2014, Launch Tennessee hosted Verizon Wireless
in Chattanooga, where five of their industry sector experts engaged in workshop-
style conversations with 35 entrepreneurs and Blackstone specialists. The Verizon
experts were in the fields of Automotive, Healthcare, Manufacturing and Smart
Grid/Utilities, aligning well with several of our summer accelerator cohorts. The goal
of the program was to surround our entrepreneurs with the combination of
technological and sector expertise, and to expose them to the partnership and
engagement opportunities of Verizon’s Innovation Program. Following the formal
event, Launch Tennessee has facilitated an additional 12 engagements between
Verizon and Tennessee early-stage companies, leveraging Verizon’s connected
device capabilities to benefit our startup community. The Launch Tennessee-
Verizon relationship continues to evolve into FY2015.
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Launch Tennessee Organizational Structure
Board of Directors
Launch Tennessee is governed by a 22-person board of directors. By design and law, 14
of the board members are to be appointed from the private sector – three are
appointed by the governor, two each by the speaker of the house and the speaker of
the senate, and seven by the Launch Tennessee board. Seven board members are to be
appointed from the public sector – three by the governor and two each by the speaker
of the house and the speaker of the senate.
Bill Hagerty, Commissioner of the Tennessee Department of Economic and Community
Development, was elected chair of the board by members present at the August 19,
2011, board meeting and was subsequently approved by unanimous consent by all
active board members.
The board consists of various subcommittees, including:
Executive (Chairperson: Commissioner Bill Hagerty)
Governance (Chairperson: Commissioner Bill Hagerty)
Audit (Chairperson: Bruce Doeg)
Capital Formation (Chairperson: Frank Williamson)
Commercialization (Chairperson: Brian Debusk)
Entrepreneurship (Chairperson: Marci Harris)
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Launch Tennessee Board of Directors, as of June 30, 2014:
Name Company/Organization Appointer | Sector Term & Expiration
AJ Bahou Prism Technologies LLC
Speaker of the Senate - Private 2 year initial; 4 year thereafter
Exp: 6/30/2015
Tom Ballard Pershing Yoakley & Associates
Board Member Emeritus Board Member Emeritus
Tom Beehan Mayor of Oak Ridge
Governor – Public 4 year initial; 4 year thereafter
Exp: 6/30/2015
Alan Bentley Vanderbilt University
LTN Board of Directors - Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Steve Crawford Eastman Chemical
Speaker of the Senate - Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Brian DeBusk DeRoyal Industries
Speaker of the House – Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
Bruce Doeg
Baker Donelson Bearman
Caldwell & Berkowitz
LTN Board of Directors – Private 3 year initial; 4 year thereafter
Exp: 6/30/2017
Dr. William Evans
St. Jude Children's Research
Hospital
Speaker of the House – Private 2 year initial; 4 year thereafter
Exp: 6/30/2015
Rep. Craig Fitzhugh Tennessee State Legislature
Governor - Public 2 year initial; 4 year thereafter
Exp: 6/30/2017
Commissioner Bill Hagerty
Department of Economic &
Community Development
Ex-Officio By Virtue of Office
Exp: N/A
Marci Harris POPVOX
LTN Board of Directors – Private 4 year initial; 4 year thereafter
Exp: 6/30/16
Dr. Thom Mason ORNL
Governor – Public 3 year initial; 4 year thereafter
Exp: 6/30/2015
Stuart McWhorter Clayton Associates
Governor – Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Dr. David Milhorn University of Tennessee
Speaker of the House – Public 3 year initial; 4 year thereafter
Exp: 6/30/2015
Dr. Brian Noland
East TN State University
Speaker of the Senate – Public 4 year initial; 4 year thereafter
Exp: 6/30/2016
Senator Mark Norris Tennessee State Legislature
Speaker of the Senate - Public 2 year initial; 4 year thereafter
Exp: 6/30/2015
David Owens Vanderbilt University
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
James Phillips NanoMech
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
Andrew Seamons Pittco Management, LLC
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2017
Richard Smith FedEx
Governor – Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
Rep. Mark White Tennessee State Legislature
Speaker of the House – Public 2 year initial; 4 year thereafter
Exp: 6/30/2015
Laura Whitsitt Smith & Nephew
Governor – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
Frank Williamson Four Bridges Capital
LTN Board of Directors - Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
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Management Team
The Launch Tennessee team is well positioned to support the state’s innovation initiatives
especially when coupled with the expertise of a very strong board of directors. Below are
snapshots of the entire management team as of the end of FY2014:
Charlie Brock
CEO & President
Serving as Launch Tennessee’s President & CEO is Charlie Brock. He
helped establish Foxmark Media, which became one of the nation’s
leading mall advertising companies. After selling Foxmark, Brock
helped launch FourBridges Capital Advisors, where Brock served as
Managing Director. Brock most recently served as a general partner
of the Chattanooga Renaissance Fund, a Chattanooga-based angel
investment group, and as the CEO of CO.LAB. Brock is an organizer
and director of CapitalMark Bank and Trust in Chattanooga and
serves as a director of The Dixie Group and Park Media Software.
Patricia Beavers, DHA, MBA/ACC
Director of Finance
Patricia ensures Launch Tennessee is fiscally accountable and maximizes
every dollar it has to pursue it mission. Previously, she had management
responsibility over multiple programs at the Tennessee Department of
Health. Patricia holds a doctorate in Health Care Administration and an
MBA and BBA in Accounting.
Courtney Corlew
Director of Communications
Courtney leads Launch Tennessee’s communications efforts. Previously,
Courtney worked as an Account Supervisor for Athlon Sports
Communications and the Community Relations Director for Primary Care
& Hope Clinic. Courtney graduated from Middle Tennessee State
University.
Jason Denenberg
Director of Entrepreneurship
Jason coordinates efforts across Tennessee’s nine regional accelerators
and focuses on driving entrepreneurial activity while building access to
capital for each region. Jason was formerly a Partner at Angel Capital
Group where he led and a financial advisor at Morgan Stanley Smith
Barney.
Henry Gindt
Director of Capital Formation
Henry manages the INCITE Co-Investment Fund and coordinates
outreach to out-of-state investors. Previously, Henry oversaw the
TNInvestco venture capital program at the Tennessee Department of
Economic and Community Development and worked at Evercore
Partners and Ondra Partners. Henry graduated from the University of
Pennsylvania.
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Andrew Hogin
Director of Outreach
Andrew’s primary role is the production of the Southland conference. He
previously served as legislative liaison for the Tennessee Department of
Economic and Community Development and as Field Director for
Governor Bill Haslam gubernatorial campaign and first year in office.
Andrew is a graduate of the University of Tennessee.
Jim Stefansic, PhD, MBA
Director of Commercialization
Jim provides assistance to Tennessee entrepreneurs who have developed
technology and are trying to commercialize it into a business. He
previously served as Chief Operating Officer at Pathfinder Therapeutics,
Inc., a medical device company he co-founded. Jim has his PhD in
Biomedical Engineering from Vanderbilt University and his MBA from
Belmont University.
Jill Van Beke
Director of Corporate Engagement
Jill works to build statewide corporate connections and strategic
partnership opportunities. Previously she was a Business Development
Consultant at the Tennessee Department of Economic and Community
Development. Jill graduated from Columbia University with a degree in
Urban Studies and concentrations in Economics and Anthropology.
Brittany Burgess
Specialist Recruiter
Brittany is responsible for coordinating the Blackstone Specialist Program
for Tennessee’s nine regional accelerators. She recently worked as an
Account Executive and recruiter for an IT recruiting firm in Nashville. Prior to
that, Brittany worked with the Development team at the United Way of
Greater Cincinnati. Brittany is a graduate of the University of Tennessee,
Knoxville.
Lindsey Cox
Accounting, Finance, and Compliance Manager
Lindsey works with each of the nine regional accelerators to ensure proper
fiscal reporting and compliance measures are in place. Lindsey previously
worked as a grant administrator at Legal Aid Society of Middle TN and a
legislative accountant in the Office of the Tennessee State Comptroller.
Tracey McGraw
Events & Administrative Coordinator
Tracey coordinates marketing and event activities as well as the day-to-
day office operations for the organization. Previously, Tracey was a Sales &
Program Coordinator at Goldner & Associates and Program Coordinator
and Wellness Coach at Fleet Feet Inc.
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Financial & Sustainability Highlights – FY 2014
Financial Status
Launch Tennessee’s technology-based economic development activities increased the
organization’s net position by approximately $535,000 compared to a $217,000 increase
the prior year. Total revenues increased 103% to $5.6 million mostly due to the
organization’s contract as Administrator of the INCITE Co-Investment Fund. As a result,
contract revenue – which is comprised of our operating grant with the State of
Tennessee and our grant to administer the INCITE Co-Investment Fund – increased 97% to
$4.8 million. Charges for services revenue, consisting of application fee revenue from the
Fund and admission fees from the Southland Conference, increased to $730,000 from
$299,000 the previous year due to application fees generated from the Fund. Other
sources of revenue (investment earnings, miscellaneous) increased to $42,000 from
$8,000 due to increased interest income.
Total expenses increased 99% to $5.1 million due to, as previously noted, Launch
Tennessee’s continued role as Administrator of the INCITE Co-Investment Fund.
Sustainability Status
As a part of the contact with the Tennessee Department of Economic and Community
Development, Launch Tennessee must raise outside funding each fiscal year in an effort
to become partially self-sustaining. During Fiscal Year 2014, Launch Tennessee exceeded
its fundraising goal by 206%.
Revenue Amount Purpose
Grants $245,000 SBIR/STTR Support Services, The Specialist Program, Commercialization
Events $786,300 Southland, The TENN, Demo Day, Venture Match
Total FY 2014 Funds Raised $1,031,300
FY 2014 Goal $500,000
Capital Raised/ Goal 206%
FY2014 Fundraising - Cash Support
doc_967269026.pdf
This particular detailed information regarding annual report to governor and general assembly november 2014.
Annual Report to Governor and General Assembly
November 2014
Created under legislative statute as Tennessee Technology Development Corporation,
now doing business as Launch Tennessee. This organization is funded under an agreement
with the State of Tennessee.
Tennessee Launch
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Dear Governor Haslam and Members of the Tennessee General Assembly:
I am pleased to present this annual report on the developments of TTDC d/b/a Launch
Tennessee over the 2014 fiscal year period, ending June 30, 2014.
As you will glean from the report, it has been a very busy year for the organization as the
team had its first full year together and worked diligently to fulfill our mission to make
Tennessee the number one place in the Southeast for entrepreneurs to start and grow a
business.
We continued to execute on several existing initiatives as well as launched several new
programs in our key focus areas of entrepreneurship, capital formation, commercialization
and outreach. Additionally, we initiated our corporate engagement program, which we see
as a key opportunity to drive impact across each of the focus areas.
Some of the new programs were the TENN master accelerator program, which included a
statewide Demo Day and road trips across the state and to Silicon Valley and New York to
showcase some of the top companies from our regional accelerator program; the Launch
Tennessee Fellows program which paired promising technologies from UTRF with graduate
students who worked diligently on commercialization plans; the Healthcare Connections
program, where emerging companies in the industry presented their businesses to corporate
“connectors” and investors; and finally, our Blackstone Specialists program, which paired 27
interns from across the state and country with five of our summer accelerator programs. Each
of these programs has met with great success and we will be expanding them in the year
ahead.
Additionally, we continued several initiatives that were launched in 2013, including our
Southland Conference that drew over 700 attendees, 70 investment firm representatives, and
over 300 applications from startups across the country; and the “Venture Match” series
pairing entrepreneurs, investors and academics in different parts of the state.
We also opened the third and final tranche of the INCITE Co-Investment fund. We invested
$4.2 million across 19 deals during FY2014, matching $14 million of private investment,
representing a total of over $18 million of capital in Tennessee companies. Finally, in an effort
to become partially self-sustaining, the organization raised over $1,000,000 of non-state
capital during FY2014, eclipsing the goal of $500,000 by over 200%.
We look forward to building on the momentum generated in 2014 to serve the entrepreneurs
and other citizens of our great state. Your support, as well as that of ECD and our board,
chaired by Commissioner Hagerty, makes this success possible.
Sincerely,
Charlie Brock
President and CEO
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Launch Tennessee Organizational Structure
Created by the Legislature in 1998, Launch Tennessee is similar in structure to many other
statewide technology-based economic development organizations in the United States.
Specifically:
• Launch Tennessee is a private, not-for-profit 501(c)(3) corporation created by the
state.
• As a public/private partnership, Launch Tennessee can enter into certain transactions
that a government agency cannot, such as financially supporting private sector non-
profit entities and for-profit businesses.
• The organization’s governance systems (with 15 of its 22 board members appointed
by government officials) and the organization’s partial reliance on state funding for
operations provide an effective system of checks and balances to ensure
accountability to state government for its operations.
Mission
Statute defines the mission of Launch Tennessee:
a) To contribute to the strengthening of the economy of the state through the
development of science and technology; and
b) To promote the development of Tennessee businesses by supporting the transfer of
science, technology, and quality improvement methods to private and public
enterprises.
In order to clearly capture the mission of developing early stage companies across the
state, Launch Tennessee developed a one-sentence mission statement that is being
used in collateral materials:
“To make Tennessee the No. 1 place in the Southeast for entrepreneurs to start and grow
a company.”
Corporate Governance & Board Committees
Proper corporate governance and oversight at the committee and board level continue
to be a priority for the organization. In addition, Launch Tennessee created operating
committees to help execute against the core mission of the organization. Current
leadership of these committees includes:
Executive (Core Committee) - Chairperson: Commissioner Bill Hagerty
Governance (Core Committee) - Chairperson: Commissioner Bill Hagerty
Audit (Core Committee) - Chairperson: Bruce Doeg
Capital Formation (Operating Committee) - Chairperson: Frank Williamson
Commercialization (Operating Committee) - Chairperson: Brian Debusk
Entrepreneurship (Operating Committee) - Chairperson: Marci Harris
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Launch Tennessee Operations Overview & FY 2014 Highlights
This report summarizes the innovation-based initiatives that Launch Tennessee and our
network of partners manage in support of the state’s broader economic development
agenda. The following categories represent the current focus of the organization.
1. Entrepreneurship: Nine regional entrepreneurial accelerators across the state
provide Tennessee entrepreneurs with mentoring, education and training,
strategic and technical support, and assistance identifying sources of capital.
2. Capital Formation: Launch Tennessee oversees Tennessee’s $30 million INCITE Co-
Investment Fund and works to connect entrepreneurs with various capital sources
including angel networks/funds and venture capital investors.
3. Commercialization: Launch Tennessee has implemented SBIR and STTR support
programs for early-stage companies and manages the Venture Match and
Fellows programs across the state in order to connect entrepreneurs, investors, and
academia.
4. Outreach: Launch Tennessee’s outreach operations target both in-state and out-
of-state stakeholders, including sponsoring innovation-focused events across the
state and positioning the organization’s annual conference as one of the top
innovation conferences in the region and country.
5. Corporate Engagement: Corporate engagement is a vehicle to drive innovation
across all Launch Tennessee focus areas. Specific opportunities to engage
include: the accelerator network, The Connection program, Reverse Pitch, INCITE
Co-Investment Fund and access to deal flow.
Launch Tennessee is ideally positioned to support the state’s innovation economy
through statute established by the General Assembly and supported by state leadership.
With the full support and confidence of state leadership, our organization will continue to
facilitate a strong innovation economy and help make Tennessee a leading state for
high-quality jobs and long-term economic prosperity.
2014 Accomplishments and Milestones Summary
During the past year, Launch Tennessee has demonstrated significant progress in
advancing its core program areas of entrepreneurship development, capital formation,
commercialization and outreach. Key accomplishments include:
Organization-wide
• Raised $1.03M in an effort to become partially self-sustaining
• Continued board-level operating committees to serve as advisors on key program
areas
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Entrepreneurship Development
• Secured sponsorship from UBS for the 2014/2015 TENN programs, including $150,000
and multiple levels of engagement
• Accelerated 70 companies through the statewide regional accelerator network
• Regional accelerators hosted over 400 entrepreneurial events, engaged over 400
mentors and screened over 1,400 companies
• Over $29 million in capital raised by accelerated startups
Capital Formation
• Invested over $4 million in capital to high-growth Tennessee companies through the
INCITE Co-Investment Fund and leveraged an additional $14 million in private capital.
• Promoted the development of angel funds / groups across the state
• Facilitated numerous connections between entrepreneurs and investors across the
state
Commercialization
• Organized 15 SBIR/STTR workshops, with over 350 attendees
• Assisted 10 companies with SBIR/STTR grant submissions and achieved a 33%
success rate
• Hosted five Venture Match events across Tennessee
• Launched the Fellows Program with the University of Tennessee and University of
Tennessee Research Foundation
Outreach
• Helped organize events for Global Entrepreneurship Week (powered by the
Kauffman Foundation) that resulted in over 70 entrepreneurial and innovation
focused events
• Attendance at our annual entrepreneur conference, Southland, grew to over 700
attendees, which included 35 top startups from across the country, over 70
investment firms and industry experts from around the country
• More than 250 stories were published in a variety of outlets, including the Wall Street
Journal, VentureBeat, Entrepreneur as well as the the major newspapers across
Tennessee
Corporate Engagement
• Formalized corporate engagement as one of the organization’s program areas.
• Developed a Healthcare Connection series with Pershing, Yoakley & Associates (PYA)
that included a total of 17 presenting early-stage companies and 60 corporate,
investor and supporter attendees
• Hosted five Verizon Wireless sector experts in Automotive, Healthcare, Manufacturing
and Smart Grid/Utilities for sessions with 35 entrepreneurs and specialists
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Entrepreneurship Development
Launch Tennessee has been working diligently with all nine regional entrepreneurship
centers to further enhance Governor Bill Haslam’s Jobs4TN Strategy. The nine regional
centers serve as the front door for entrepreneurs as they connect them with resources
necessary to start and grow their business. Resources may include mentors, investors,
industry experts, existing corporations and other entities providing entrepreneurial
support. These are the core components needed to build a thriving entrepreneurial
ecosystem to drive high-growth companies.
Highlights from the year include:
• The first TENN class graduated in February, where Governor Haslam &
Commissioner Hagerty presented a $25,000 check to Vendor Registry for gaining
the most traction after solidifying a pilot contract with Microsoft. Teams that
graduated from one of Tennessee’s statewide accelerators were eligible to
compete for a spot in The TENN during a statewide Demo Day. Ten companies
were selected from Knoxville, Chattanooga, Memphis, and Nashville, focusing on
industries such as medical device, consumer goods, B2B platforms and
healthcare.
• Launch Tennessee launched the first Specialist Program, an internship program
that introduces entrepreneurship in Tennessee to students. There were 27 Specialist
placed in 5 accelerators across the state from schools such as Vanderbilt,
University of Tennessee, University of Memphis, Sewanee, Columbia, Emory, North
Carolina State, Georgia Tech, and Rhodes. These students supported both
program directors and companies throughout the 13-week boot camp cohort
programs. The program resulted in one student being hired by a company, one
hired to work for the accelerator, and three continuing to support the companies
on a contract basis.
• For FY2014, 70 companies participated and graduated from regional accelerator
programs across the state. These 13 week boot camp cohort programs focused on
a variety of industries including healthcare, smart grid technology, medical
device, 3D printing/additive manufacturing, digital media and automotive.
• Launch Tennessee has engaged UBS as The TENN presenting sponsor for the 2014
and 2015 programs. As UBS expanded its presence in Nashville and in other
Tennessee markets, the firm sought an opportunity to fulfill its Elevating
Entrepreneurs corporate initiative on a statewide basis. In addition to the $150,000
financial contribution, UBS is supporting The TENN with its human capital. Through its
investment banking, wealth management and asset management business lines,
the firm will offer access to its advisors and client portfolio, aligning specific
expertise and resources with our TENN teams’ critical needs.
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Strong leadership of the regional accelerators is crucial. Below is a summary of the
Executive Directors and locations for each accelerator:
Accelerator Name Executive Director Location
AccelNow John Campbell Johnson City, TN
Knoxville Entrepreneur
Center
Jim Biggs Knoxville, TN
The Company Lab Mike Bradshaw Chattanooga, TN
The Biz Foundry Jeff Brown Crossville, TN
Nashville Entrepreneur
Center
Michael Burcham Nashville, TN
Southern Middle TN
Entrepreneur Center
Dan Marcum Tullahoma, TN
Northwest TN
Entrepreneur Center
Carol Reed Martin, TN
Southwest TN
Entrepreneur
Development Center
Ben Ferguson/ Ben Harris Jackson, TN
Greater Memphis
(Start Co. / ZeroTo510)
Eric Matthews/ Allan Daisley Memphis, TN
Regional Metrics July 2013 - June 2014
July 2013-June 2014 Events Screened
Accelerated
(Cohort
Graduates)
Capital
Raised Jobs
Northeast TN- AccelNow 8 41 0 1,800,010 9.5
Southeast- The Company Lab 71 166 17 10,197,500 24.5
Southern Middle TN
Entrepreneur Center
16 91 9 193,500 14
Southwest TN Entrepreneur
Development Center
22 56 0 N/A N/A
East- Knoxville Entrepreneur
Center
45 94 5 3,100,000 7.5
Upper Cumberland – The Biz
Foundry
21 50 0 320,000 7
Northern Middle-Nashville
Entrepreneur Center
143 689 21 10,400,000 50
Greater Memphis
(Start Co. / ZeroTo510)
58 139 11 2,665,000 15.5
Northwest TN Entrepreneur
Center
34 93 7 452,500 5
Total:
418 1419 70 29,128,510 133
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Capital Formation
INCITE Co-Investment Fund
The INCITE Co-Investment Fund is a venture capital program that is a key component of
Governor Bill Haslam’s $50 million INCITE (Innovation, Commercialization, Investment,
Technology and Entrepreneurship) initiative to raise Tennessee’s profile in innovation-
based economic development and increase the number of knowledge-based jobs in
the state of Tennessee. Designed by ECD, and administered by Launch Tennessee, the
Fund is backed entirely by a $29.7 million award through the U.S. Department of
Treasury’s State Small Business Credit Initiative. During Fiscal Year 2014, the Fund invested
over $4.2 million in capital to early-stage high growth companies in the state of
Tennessee. Funding is provided to Approved Investors and Qualified Businesses on a first-
come, first-serve basis. A summary of the investment activity is listed below.
Investment Eligibility
The types of companies which Launch Tennessee's INCITE Co-Investment Fund invests in
include primarily technology-enabled businesses with scalable growth profiles. These
companies can be as diverse as restaurant order management systems to health care IT
companies that produce electronic medical records. An eligible business must receive
equity or preferred equity investment of at least $300,000 to qualify. Each of the investors
must be accredited, and at least one investor must have assets under management of
$15 million and a track record of investing at least $5 million in the types of businesses
that would qualify under the program guidelines (www.launchtn.org).
Deal Volume/Activity
During Fiscal Year 2014, Launch Tennessee's INCITE Co-Investment Fund invested
approximately $4.2 million, matching $14 million of investment, representing a total of
approximately $18.2 million of equity and preferred equity investment in 19 deals across
the state.
Fiscal Year 2014 INCITE Fund Investment Summary
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Molecular Sensing #2 Healthcare Tri-Star Technology 07/19/13 $300,000 $150,000 $450,000
iCitizen/ Citizengine #2 Digital Media Harry Rudolf Jacobson 07/19/13 $500,000 $250,000 $750,000
Streamweaver #2 Digital Media TNCV 07/19/13 $320,000 $160,000 $480,000
Overdog Digital Media TNCV 07/19/13 $300,000 $150,000 $450,000
MedCenterDisplay Healthcare Tri-Star Technology 07/23/13 $1,000,000 $500,000 $1,500,000
Senior Living Healthcare NEST-TN, LLC 07/19/13 $375,000 $187,500 $562,500
Diagnovus Healthcare Limestone Fund, LLC 07/23/13 $1,000,000 $500,000 $1,500,000
Molecular Sensing #3 Healthcare Tri-Star Technology Fund 10/30/13 $1,000,000 $500,000 $1,500,000
Consensus Point #2 Technology NEST-TN 11/29/13 $249,640 $62,410 $312,050
Auramist #2 High Tech Solidus Company, LP 12/11/13 $1,000,000 $250,000 $1,250,000
Quire #2 Healthcare Tri-Star Technology 12/11/13 $999,600 $249,900 $1,249,500
iCitizen/ Citizengine #3 Technology Harry Jacobson 12/20/13 $713,875 $178,469 $892,343
Logogarden Technology FCA Venture Partners V 12/11/13 $600,000 $150,000 $750,000
Hubble Telemedical Healthcare MB Ventures 02/04/14 $325,000 $75,000 $400,000
iCitizen #4 Technology Harry Jacobson 03/20/14 $609,999 $152,500 $762,499
US Biologic Healthcare XMi 02/04/14 $500,000 $125,000 $625,000
SIGNiX #2 Technology ProNvest, Inc. 03/31/14 $1,200,000 $240,000 $1,440,000
LiveSchool Technology/ NCN 04/17/14 $622,819 $122,500 $745,319
Molecular Sensing # 4 Medical Tri-Star Technology Fund 06/12/14 $2,400,000 $270,000 $2,670,000
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Current Approved Investors
Tri-Star Technology Fund, LLC Bone Blankenship Partnership
Meritus Ventures, L. P. MedCare Investment Fund III, Ltd.
Solidus-TNInvestco, LLC MedCare Investment Fund IV, Ltd.
Nest-TN, LLC Stephen Edward Young
Solidus Company, LP Tri-Star Technology Fund II, LLC
CP Investment Partners Scott R. Jeffery
NEST-USA, L.P. Senior Living Acquisition Corp, LLC
Tennessee Angel Fund, LP Limestone Fund, LLC
NCN Angel Fund I, LP Charles Kenton Kirby
XMi High Growth Development Fund LLC Robert Lemuel Kirby
Michael D. Shmerlings Partners G.P. Jewell Martin Hale
Battelle Ventures, LP Envest III, LLC
Ninth Avenue South Investments III, LLC Burtonwood Capital, LLC
Hatteras PTI, LLC Harding Holdings Inc.
Tennessee Community Ventures Fund LLC JRI Ventures LLC
Legacy Investments, LLC FCA Venture Partners, IV, LP
Landman Family Limited Partnership Tuna Investments, L.C.
Innova Fund II, LP Benjamin Cullen Bryant, Jr.
Joseph A. Hollingsworth, Jr. James H. Barton Jr.
Chrysalis Ventures II, LP T.M. Hederman Trust
Kevin Michael McNamara William Brian Reames
Lee Daniel Hammond Paul Gregory Hagood
Peter Samuel Brodsky Pittco Capital Partners IV, LP
Fred Curtis Goad, Jr Richard E. Ruth
Jimmy Dale Kever RAG Family Trust
Germain Boniface Boer Charles Gerber 2012 Family Trust
Herbert Allen Fritch Christopher Michael Kelly
Lawrence L Davis Steve Gerard Fridrich
Council Capital II, L.P. Leon May Trust I
Council & Enhanced Tennessee Fund, LLC Hunter Hillenmeyer
ProNvest, Inc. Memphis Biomed Ventures
SNB Investments Ezra Uzi Yemin
Michael Duncan Dashiff Michael J Hills
MedCare Investment Fund V, L.P. MGC Venture Partners 2013, L.P.
Harold Rudolf Jacobson FCA Venture Partners V LP
Matthew Robert Hafer Stephen Gregory Butler
Richard Theobald Intersouth Advisors, Inc.
Relevance Capital III, L.P.
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Commercialization
Launch Tennessee has incorporated dedicated resources this past year to several
elements of commercialization-related programming, including SBIR/STTR outreach,
continued support of entrepreneur/inventor/investor matching, and a new Fellows
program. These efforts continue to be in pursuit of success in four areas:
• Increasing the amount of venture capital raised by Tennessee companies;
• Increasing the number of start-ups based on intellectual property from research
institutions in Tennessee;
• Increasing the number of licenses to Tennessee companies from research
institutions in Tennessee; and
• Increasing the number of SBIR/STTR awards to Tennessee companies.
SBIR/STTR Support
Launch Tennessee believes that SBIR/STTR awards are an under-tapped resource for
Tennessee companies. The goals in this area are to increase the total amount of
SBIR/STTR funding to Tennessee companies, to increase the number of quality firms
pursuing and winning these awards, and to support Phase I winners in becoming Phase II
winners.
During the year, Launch Tennessee utilized the services of Mark Henry of Grow Emerging
Companies, LLC, a nationally renowned SBIR consultant. Henry provided the following
services to the Phase 0/00 program awardees:
• Identification and evaluation of potential SBIR/STTR opportunities;
• Expert proposal writing, editing, and production assistance;
• Assistance with the market research necessary to develop a compelling
SBIR/STTR commercialization story for successful Phase II awards; and
• Assistance in identifying and engaging collaborators required for R&D/business
credibility as well as potential Phase III private-sector partners;
Note that Mark Henry's support was provided in part by a FAST grant awarded to Launch
Tennessee by the SBA for the second consecutive year.
Grow EC assisted in the submission or continues to assist ten (10) new Phase I SBIR/STTR
applicants (representing nine different companies) during the fiscal year. Of these ten
(10) applicants, five (5) submitted grants to the National Institute of Health (NIH), four to
the National Science Foundation (NSF), and one to the Department of Defense. The
table below summarizes the results of the Launch Tennessee 2013-2014 program as of
6/30/14, with data from previous years as a benchmark.
The potential economic impact with successfully funded proposals would total
approximately $675K (including one of the ten submissions still to be reviewed). Note
that one of our clients in 2013-2014, VDDI Pharmaceuticals in partnership with Vanderbilt
University, has already won a large drug discovery Phase I STTR grant of $375K from NIH.
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Given his expertise in grant writing, Dr. Stefansic will continue to assist Mark Henry in the
review of the outstanding NIH proposals.
Table 1: SBIR/STTR Phase 0/00 program results in Tennessee since its inception in 2008
Year Number of Submissions Success Rate
2008-2010 !30 (all Ph1) 17% (!5/30)
2010-2011 (pilot) 18 (12 Ph1, 6 Ph2) 33% (6/18)
2011-2012 13 (7 Ph1, 4 Ph2, 2 FT) 8% (1/13)
2012-2013 9 (8 Ph1, 1 Ph2) 11% (1/9)*
2013-2014 10 (10 Ph1)+ 33% (3/9)**
*One Phase II – one additional received favorable score and resubmitted in 8/14
+As of June 30th, 2014
**One additional grant received favorable score and will resubmit; one other is not yet
reviewed.
Note that there was a decrease in success rate from 2011 through part of 2013. With the
turnover at TTDC and interruption in funding for Mark Henry in 2011-2012, there was a gap
in grant writing assistance and quality of submissions. Dr. Stefansic has been focused on
attracting academic researchers to increase the quality of submissions. Through plans
developed in our most recent FAST grants submitted and awarded by SBA in both 2013
and 2014, there has been a concerted effort to provide more advanced Phase II grant
writing and commercialization assistance, in particular to support companies that need
to manage their Phase I awards in order to get to Phase II and private investment. In
addition, less money is being spent on the program in order to focus on quality
submissions over quantity.
Launch Tennessee also continued to host a series of SBIR/STTR proposal writing workshops
across the state in conjunction with local partners in major cities and more rural areas.
Workshops in 2013-2014 were conducted in Chattanooga (2 with 48 participants),
Knoxville (3 with 50 participants), Memphis (3 with 60 participants), Nashville (2 with 45
participants), Cookeville (2 with 38 participants), Murfreesboro (1 with 24 participants),
Spring Hill (1 with 10 participants), and Johnson City (webinar with 3 participants). A
majority of the participants were from academic research institutions at Vanderbilt, UT
Knoxville & UT Chattanooga, and University of Memphis. The goal was to attract higher
quality research with investigators capable of successfully writing and executing
technology grant proposals.
In addition these workshops, we provided a five-week specific step-by-step "Getting
Ready to Write" SBIR grant training webinar program to nascent entrepreneurs through
our partners at Grow Emerging Technologies, LLC. Several women-owned businesses
participated in this webinar. Finally, Mark and Catherine Henry and Dr. Stefansic led a
"Managing Phase I to Get to Phase II" workshop in April with 15 attendees, several of
whom are now in our program writing Phase II grants.
In 2015, Launch Tennessee plans to continue to offer Phase 0/00 program support with
Mark Henry, with the following objectives:
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• Support additional proposal writing workshops across the state, with a focus on
attracting participants writing more financially lucrative Phase II or Fast Track
(Phase I & II combined) grant proposals;
• Increase the quality of Tennessee firms participating in the SBIR/STTR programs,
with a focus on attracting early-stage companies based on academic
laboratory research; and
• Develop methods to make Launch Tennessee’s SBIR/STTR support program
financially sustainable within three to four years such that revenue it generates
from grant writing assistance and FAST federal funding covers all of the
program’s costs.
Entrepreneur and Technology Matching
With the intention of strengthening the fabric of relationships among entrepreneurs,
inventors and investors, Launch Tennessee developed Venture Match. This is an
opportunity for entrepreneurs and investors to engage in meaningful conversations with
some of Tennessee’s top innovators and explore the best emerging opportunities in order
to develop new companies, create sustainable jobs, and build value for investors. These
events were first held regionally throughout spring and summer 2013, hosted by
technology transfer offices or similar support organizations in “off-campus” locations.
Since last October, we have held five Venture Match events – one in Nashville in
November, three in East Tennessee throughout the spring, and one in Memphis in April.
The Nashville event was focused on mature technologies or actual small businesses
recently launched from Middle Tennessee universities, the Memphis event was focused
on a variety of technologies both commercialized and in development, and the East
Tennessee series was focused on medical devices (February) / data analytics &
visualization (March) / advanced manufacturing (April). These focus areas reflect areas
of strength from universities and research institutions around the state, as well as areas in
which the private sector has expressed interest in commercialization.
One example of a successful "match" occurred through the Nashville event. Dr. Eliot
Altman from The Tennessee Center for Botanical Medicine Research at MTSU presented
his work on screening of Traditional Chinese Medicine herbs for drug treatment of a
variety of illnesses. He has now partnered with an experienced commercial drug
development specialist who recently moved to Franklin, TN and attended the event
representing his new company. MTSU and this company are in the process of a licensing
agreement to push the technology into a new partnership in Middle Tennessee.
The relationship aspect building of Venture Match will be supplemented by Launch
Tennessee’s outreach efforts to venture capital and private equity firms that concentrate
in the state’s core research competencies and the various technology transfer offices
across the state.
In the future, both the Venture Match series and "road show" events of technologies out
of our labs and universities will help Launch Tennessee evaluate how best to match
entrepreneurs to technologies and investors and to incorporate those best practices into
additional programming initiatives.
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Fellows Program
In recognition of our state's institutional intellectual property strengths and the potential
for commercialization as a path toward entrepreneurship, Launch Tennessee piloted a
Fellows Program with UT and UTRF this past summer through the end of 2014.
This program matched graduate students in Business and/or Law with UT researchers that
have relatively mature technologies with potential market applications. As research
continues inside the laboratory, the market research and business plan will develop
outside the laboratory.
Launch Tennessee provided a summer stipend for the three Fellows chosen in a
competitive process along with mentorship from Dr. Stefansic. The Fellows worked closely
with UT faculty researchers and graduate students to determine the market viability of
the technology and its best path forward in the marketplace. The Fellows have
developed a business plan, investor pitch deck, and full financial model for each of the
technologies under review. Below is a summary of the three projects and Fellows:
• "Improved Nasal Cannula" [John Horton, JD/MBA candidate 2015] – this device
was conceived by Dr. Chris Stephens from the Institute of Biomedical Engineering
and several neonatologists (Drs. Mark Gaylord & Dr. Vichien Lorch) from the UT
Medical Center in Knoxville. During the summer, John developed a clinical
investigation plan and business plan that would focus on licensing this technology
and other similar products covered by the intellectual property to a manufacturer
and distributor. Dr. Stephens is applying for a UTRF Technology Maturation Grant to
build the first prototypes and begin the clinical investigation developed.
• "Neuromorphic Computing" [Adam Holdsworth, MBA candidate 2014] – this
technology was conceived by Drs. Doug Birdwell and Mark Dean, along with NSF
graduate fellow Katie Schuman. Based on considerable conversations with the
inventors, Adam developed a very detailed financial model that can be
replicated with short business plans to potential strategic partners such as
Qualcomm or Google, which would pay a start-up with the right expertise led by
the individuals above R&D fees to develop specific applications. Work is in process
using connections from Dr. Dean, a former IBM executive, to present these short
business plans to strategic partners in early in 2015.
• "Thermofield, Inc." [Ryan Kemp, JD] – this inexpensive but highly innovative
technology which involves the use of high temperature heat to treat cancer has
been developed by Thermofield and their partner at Tennessee Technology
University. The technology is quite mature and ready for investment based on
successful animal studies done at Lincoln Memorial University in Knoxville, Ryan has
developed a complete business and financial plan for angel investors that would
allow the technology to be sold in the veterinary market then more globally in low
to middle income countries such as India. With this business plan, Thermofield has
made the finals of the Global Action Challenge with a $1MM investment prize and
also the semi-finals of the US Dept. of State India-US partnership grant competition.
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Outreach
The long-term goal of Launch Tennessee’s outreach plan is to position our state as the
southeastern region’s #1 location for entrepreneurs, investors and innovators. By
partnering with various organizations around the state, Launch Tennessee will host or
partner to create world-class events that bring together entrepreneurs, corporate
leaders, researchers and investors from across the country.
Southland – “Southern Culture & Technology”
Launch Tennessee’s principal activity in its outreach business segment is its annual
conference focused on entrepreneurship and southern culture. The 2
nd
annual event
took place on June 9-11 in Nashville, TN at Marathon Music Works.
Southland featured venture capitalists and angel investors from across the country
along with an extensive lineup of speakers and panelists with a firsthand knowledge
of the power of innovation and its ability to transform a region’s ecosystem. Speakers
included Former Vice President Al Gore (Co-Founder, Generation Investment
Management), Andy Dunn (CEO & Co-Founder, Bonobos), Bill Ready (CEO, Braintree),
Aaron Levie (CEO & Co-Founder, Box) and Phil Libin (CEO, Evernote).
Other key elements of the 2014 Southland were:
• Over 700 attendees were in Nashville for the 2.5-day conference
• Over 70 investment firms were represented
• Conference media coverage generated over 100 stories reaching over 170 million
people, with a PR/marketing value of over $554,000.
• Southland Village featuring 35 high-growth startups from across the world
• Three nights of entertainment featuring musical acts brought in part through
partnership with AC Entertainment, the creators of Bonnaroo
• Samplings of southern culture featuring local restaurants, distillers, artisans and
musicians.
Sponsored Events / Global Entrepreneurship Week
A big part of Launch Tennessee’s outreach plan consists of a sponsorship program aimed
at providing support to entrepreneur-focused events happening across the state. Some
of the notable 2014 sponsored events included:
• Will This Float? CO.LAB, Chattanooga’s accelerator, hosts an annual business pitch
competition that showcases up-and-coming startup ideas in the Chattanooga
area. The four previous winners of this event have raised over $5 million in private
Angel and VC investment.
• Life Sciences Tennessee Annual Conference: Life Science Tennessee hosted its
2014 Annual Conference featuring national and state speakers from the drug
discovery, medical device, diagnostics, biologics, bio-agriculture and venture
capital industries.
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• Startup Day – Knoxville: Startup Day brings together businesses and entrepreneurs
looking for the next big idea and investors looking for new startup opportunities,
businesses offering services to startups and small businesses, regional accelerators,
research institutions and East Tennesseans interested in learning what all the
excitement is about.
• Global Action Summit: The Summit is an annual event held in Nashville, Tennessee
to address major innovation-based opportunities that create abundance. It is
presented by the Global Action Platform, which works to advance social
leadership, invest in innovation and new businesses and focus on the intersection
of food, health and prosperity.
Global Entrepreneurship Week took place Nov. 18-22, 2013. This Kauffman Foundation
initiative takes place across six continents and is designed to inspire people to embrace
innovation, imagination and creativity. Launch Tennessee worked with over 40 partner
organizations to bring together resources that resulted in 75 events being hosted across
our state.
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Marketing & Communications
Launch Tennessee considers itself to be the marketing arm for Tennessee’s
entrepreneurship efforts. For FY2014, more than 250 stories were published about Launch
Tennessee and Tennessee’s entrepreneurs. These stories were featured in statewide,
regional and national publications including The Wall Street Journal, VentureBeat,
Entrepreneur, The Tennessean and major daily newspapers across the Southeast. Launch
Tennessee also sends out a daily news briefing (called Daily Clips) to more than 500
people and a monthly newsletter to more than 2,000 people.
Launch Tennessee’s continued marketing and communications goal is to create a
steady drumbeat of positive news stories, case studies, and data to help further
Tennessee’s entrepreneurial ecosystem and position Tennessee as the No. 1 state in the
Southeast for entrepreneurship and innovation. Launch Tennessee’s media strategy is
multi-faceted, robust and proactive. Some of our specific audiences and
communication goals include:
• In-state Stakeholders: Building relevance and engagement among key
stakeholders across the state including inventors, investors and entrepreneurs.
• Out-of-State Stakeholders: Marketing to potential investors, startups and
stakeholders outside of Tennessee with the goal having the state identified as one
of the country’s leading innovation and entrepreneurial hubs.
• Industry: Strategically targeting key industry partners in the state to further engage
them in the state’s entrepreneurial and commercialization efforts.
• Data: Developing a baseline of statistics and data that illustrate why Tennessee is
a great place to start and grow a business.
Marketing Highlights
• Rebranding of company logo and marketing materials (Daily Clips and Newsletter
templates)
• Redesign of the Launch Tennessee website (www.launchtn.org) to streamline user
interface and better serve as a robust repository for entrepreneurs.
• Creation of Launch Tennessee media kit that is complementary to our new brand
and enhanced mission.
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Corporate Engagement
In 2014Q1, Launch Tennessee formalized our corporate engagement efforts and created
a director-level position to head the effort.
The corporate community has tremendous resources to offer early-stage companies in
the form of venture investment, beta test sites, strategic partnerships, customer
engagements and mentorship. Conversely, the startup community has incredible value
to offer the corporate world in the form of innovation solutions and workforce talent. It is
this two-way value proposition that drives our corporate engagement strategy.
During FY2014, the Launch Tennessee team undertook a strategic planning effort,
including a deep dive SWOT analysis, 20+ stakeholder interviews and best practices
research of programs around the country. A piece of that plan was to outline a more
strategic approach for Launch Tennessee and for Tennessee startups to engage with
corporate entities. These opportunities to engage include the Accelerator Network, The
Connection and Venture Match programs, a Reverse Pitch-style event, the INCITE Co-
Investment Fund and other in-state deal flow. The Launch Tennessee team began to
explore each of those components in FY2014; several are highlighted below.
• Healthcare Connection series: Launch Tennessee developed a Healthcare
Connection series with Pershing, Yoakley & Associates (PYA). The goal of the series
was to provide healthcare startups an audience with seasoned industry
professionals, both to garner market-driven feedback and to access those
professionals’ networks for introductions to customers and strategic partners. The
series included three programs, one each in Knoxville (January), Nashville (April)
and Chattanooga (June), where a total of 17 early-stage companies presented,
and over 60 corporate representatives, investors and supporters attended. The
entrepreneurs benefited immediately from the attendees’ market-driven
feedback. Over the course of the three-program series, PYA and Launch
Tennessee facilitated 28 follow-up meetings with potential customers, partners and
investors. We are aware of 10 of those connections resulting in on-going
communications. Launch Tennessee is continuing to explore opportunities around
the Connections-style program and leveraging our partners’ networks.
• Verizon Wireless workshop: In June 2014, Launch Tennessee hosted Verizon Wireless
in Chattanooga, where five of their industry sector experts engaged in workshop-
style conversations with 35 entrepreneurs and Blackstone specialists. The Verizon
experts were in the fields of Automotive, Healthcare, Manufacturing and Smart
Grid/Utilities, aligning well with several of our summer accelerator cohorts. The goal
of the program was to surround our entrepreneurs with the combination of
technological and sector expertise, and to expose them to the partnership and
engagement opportunities of Verizon’s Innovation Program. Following the formal
event, Launch Tennessee has facilitated an additional 12 engagements between
Verizon and Tennessee early-stage companies, leveraging Verizon’s connected
device capabilities to benefit our startup community. The Launch Tennessee-
Verizon relationship continues to evolve into FY2015.
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Launch Tennessee Organizational Structure
Board of Directors
Launch Tennessee is governed by a 22-person board of directors. By design and law, 14
of the board members are to be appointed from the private sector – three are
appointed by the governor, two each by the speaker of the house and the speaker of
the senate, and seven by the Launch Tennessee board. Seven board members are to be
appointed from the public sector – three by the governor and two each by the speaker
of the house and the speaker of the senate.
Bill Hagerty, Commissioner of the Tennessee Department of Economic and Community
Development, was elected chair of the board by members present at the August 19,
2011, board meeting and was subsequently approved by unanimous consent by all
active board members.
The board consists of various subcommittees, including:
Executive (Chairperson: Commissioner Bill Hagerty)
Governance (Chairperson: Commissioner Bill Hagerty)
Audit (Chairperson: Bruce Doeg)
Capital Formation (Chairperson: Frank Williamson)
Commercialization (Chairperson: Brian Debusk)
Entrepreneurship (Chairperson: Marci Harris)
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Launch Tennessee Board of Directors, as of June 30, 2014:
Name Company/Organization Appointer | Sector Term & Expiration
AJ Bahou Prism Technologies LLC
Speaker of the Senate - Private 2 year initial; 4 year thereafter
Exp: 6/30/2015
Tom Ballard Pershing Yoakley & Associates
Board Member Emeritus Board Member Emeritus
Tom Beehan Mayor of Oak Ridge
Governor – Public 4 year initial; 4 year thereafter
Exp: 6/30/2015
Alan Bentley Vanderbilt University
LTN Board of Directors - Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Steve Crawford Eastman Chemical
Speaker of the Senate - Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Brian DeBusk DeRoyal Industries
Speaker of the House – Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
Bruce Doeg
Baker Donelson Bearman
Caldwell & Berkowitz
LTN Board of Directors – Private 3 year initial; 4 year thereafter
Exp: 6/30/2017
Dr. William Evans
St. Jude Children's Research
Hospital
Speaker of the House – Private 2 year initial; 4 year thereafter
Exp: 6/30/2015
Rep. Craig Fitzhugh Tennessee State Legislature
Governor - Public 2 year initial; 4 year thereafter
Exp: 6/30/2017
Commissioner Bill Hagerty
Department of Economic &
Community Development
Ex-Officio By Virtue of Office
Exp: N/A
Marci Harris POPVOX
LTN Board of Directors – Private 4 year initial; 4 year thereafter
Exp: 6/30/16
Dr. Thom Mason ORNL
Governor – Public 3 year initial; 4 year thereafter
Exp: 6/30/2015
Stuart McWhorter Clayton Associates
Governor – Private 3 year initial; 4 year thereafter
Exp: 6/30/2015
Dr. David Milhorn University of Tennessee
Speaker of the House – Public 3 year initial; 4 year thereafter
Exp: 6/30/2015
Dr. Brian Noland
East TN State University
Speaker of the Senate – Public 4 year initial; 4 year thereafter
Exp: 6/30/2016
Senator Mark Norris Tennessee State Legislature
Speaker of the Senate - Public 2 year initial; 4 year thereafter
Exp: 6/30/2015
David Owens Vanderbilt University
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
James Phillips NanoMech
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
Andrew Seamons Pittco Management, LLC
LTN Board of Directors – Private 2 year initial; 4 year thereafter
Exp: 6/30/2017
Richard Smith FedEx
Governor – Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
Rep. Mark White Tennessee State Legislature
Speaker of the House – Public 2 year initial; 4 year thereafter
Exp: 6/30/2015
Laura Whitsitt Smith & Nephew
Governor – Private 2 year initial; 4 year thereafter
Exp: 6/30/2018
Frank Williamson Four Bridges Capital
LTN Board of Directors - Private 4 year initial; 4 year thereafter
Exp: 6/30/2016
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Management Team
The Launch Tennessee team is well positioned to support the state’s innovation initiatives
especially when coupled with the expertise of a very strong board of directors. Below are
snapshots of the entire management team as of the end of FY2014:
Charlie Brock
CEO & President
Serving as Launch Tennessee’s President & CEO is Charlie Brock. He
helped establish Foxmark Media, which became one of the nation’s
leading mall advertising companies. After selling Foxmark, Brock
helped launch FourBridges Capital Advisors, where Brock served as
Managing Director. Brock most recently served as a general partner
of the Chattanooga Renaissance Fund, a Chattanooga-based angel
investment group, and as the CEO of CO.LAB. Brock is an organizer
and director of CapitalMark Bank and Trust in Chattanooga and
serves as a director of The Dixie Group and Park Media Software.
Patricia Beavers, DHA, MBA/ACC
Director of Finance
Patricia ensures Launch Tennessee is fiscally accountable and maximizes
every dollar it has to pursue it mission. Previously, she had management
responsibility over multiple programs at the Tennessee Department of
Health. Patricia holds a doctorate in Health Care Administration and an
MBA and BBA in Accounting.
Courtney Corlew
Director of Communications
Courtney leads Launch Tennessee’s communications efforts. Previously,
Courtney worked as an Account Supervisor for Athlon Sports
Communications and the Community Relations Director for Primary Care
& Hope Clinic. Courtney graduated from Middle Tennessee State
University.
Jason Denenberg
Director of Entrepreneurship
Jason coordinates efforts across Tennessee’s nine regional accelerators
and focuses on driving entrepreneurial activity while building access to
capital for each region. Jason was formerly a Partner at Angel Capital
Group where he led and a financial advisor at Morgan Stanley Smith
Barney.
Henry Gindt
Director of Capital Formation
Henry manages the INCITE Co-Investment Fund and coordinates
outreach to out-of-state investors. Previously, Henry oversaw the
TNInvestco venture capital program at the Tennessee Department of
Economic and Community Development and worked at Evercore
Partners and Ondra Partners. Henry graduated from the University of
Pennsylvania.
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Andrew Hogin
Director of Outreach
Andrew’s primary role is the production of the Southland conference. He
previously served as legislative liaison for the Tennessee Department of
Economic and Community Development and as Field Director for
Governor Bill Haslam gubernatorial campaign and first year in office.
Andrew is a graduate of the University of Tennessee.
Jim Stefansic, PhD, MBA
Director of Commercialization
Jim provides assistance to Tennessee entrepreneurs who have developed
technology and are trying to commercialize it into a business. He
previously served as Chief Operating Officer at Pathfinder Therapeutics,
Inc., a medical device company he co-founded. Jim has his PhD in
Biomedical Engineering from Vanderbilt University and his MBA from
Belmont University.
Jill Van Beke
Director of Corporate Engagement
Jill works to build statewide corporate connections and strategic
partnership opportunities. Previously she was a Business Development
Consultant at the Tennessee Department of Economic and Community
Development. Jill graduated from Columbia University with a degree in
Urban Studies and concentrations in Economics and Anthropology.
Brittany Burgess
Specialist Recruiter
Brittany is responsible for coordinating the Blackstone Specialist Program
for Tennessee’s nine regional accelerators. She recently worked as an
Account Executive and recruiter for an IT recruiting firm in Nashville. Prior to
that, Brittany worked with the Development team at the United Way of
Greater Cincinnati. Brittany is a graduate of the University of Tennessee,
Knoxville.
Lindsey Cox
Accounting, Finance, and Compliance Manager
Lindsey works with each of the nine regional accelerators to ensure proper
fiscal reporting and compliance measures are in place. Lindsey previously
worked as a grant administrator at Legal Aid Society of Middle TN and a
legislative accountant in the Office of the Tennessee State Comptroller.
Tracey McGraw
Events & Administrative Coordinator
Tracey coordinates marketing and event activities as well as the day-to-
day office operations for the organization. Previously, Tracey was a Sales &
Program Coordinator at Goldner & Associates and Program Coordinator
and Wellness Coach at Fleet Feet Inc.
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Financial & Sustainability Highlights – FY 2014
Financial Status
Launch Tennessee’s technology-based economic development activities increased the
organization’s net position by approximately $535,000 compared to a $217,000 increase
the prior year. Total revenues increased 103% to $5.6 million mostly due to the
organization’s contract as Administrator of the INCITE Co-Investment Fund. As a result,
contract revenue – which is comprised of our operating grant with the State of
Tennessee and our grant to administer the INCITE Co-Investment Fund – increased 97% to
$4.8 million. Charges for services revenue, consisting of application fee revenue from the
Fund and admission fees from the Southland Conference, increased to $730,000 from
$299,000 the previous year due to application fees generated from the Fund. Other
sources of revenue (investment earnings, miscellaneous) increased to $42,000 from
$8,000 due to increased interest income.
Total expenses increased 99% to $5.1 million due to, as previously noted, Launch
Tennessee’s continued role as Administrator of the INCITE Co-Investment Fund.
Sustainability Status
As a part of the contact with the Tennessee Department of Economic and Community
Development, Launch Tennessee must raise outside funding each fiscal year in an effort
to become partially self-sustaining. During Fiscal Year 2014, Launch Tennessee exceeded
its fundraising goal by 206%.
Revenue Amount Purpose
Grants $245,000 SBIR/STTR Support Services, The Specialist Program, Commercialization
Events $786,300 Southland, The TENN, Demo Day, Venture Match
Total FY 2014 Funds Raised $1,031,300
FY 2014 Goal $500,000
Capital Raised/ Goal 206%
FY2014 Fundraising - Cash Support
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