Frequently Asked Questions (FAQs)

InvestTN is made possible by Fund Tennessee – $117 million in federal funding for Tennessee as part of the U.S. Department of the Treasury’s SSBCI (State Small Business & Credit Initiative) program. InvestTN is the $70M equity program, administered by Launch Tennessee.

We are accepting applications on a rolling basis and reviewing new applications regularly. There is no fixed deadline to apply at this time.

We will review completed applications for alignment with InvestTN program guidelines as set by the State of Tennessee and the U.S. Department of the Treasury, in addition to assessment of the viability of the company (industry focus, business model, proof points, go-to-market, team expertise, etc.). Incomplete applications will not be considered for investment.

We are unable to provide updates on the status of your application while our review process is ongoing, as this will slow our capacity to process applications and make investments. If we are interested in moving forward with your application, we will be in touch to schedule a call/meeting. If we do not think there is a fit with our program, we will let you know via email.

The American Rescue Plan Act reauthorized and expanded the State Small Business Credit Initiative (SSBCI) via US Treasury to provide $10 billion to support small businesses and empower them to access the capital needed to invest in job-creating opportunities as the country emerges from the pandemic. SSBCI provides funds to states, the District of Columbia, territories, and Tribal governments to promote American entrepreneurship, support small business ownership, and democratize access to capital across the country, including in underserved communities. To learn more about the program, including comprehensive detail on the guidelines and requirements, visit the SSBCI website.

InvestTN capital will be invested into Tennessee-located businesses, defined as a business that is registered to do business in Tennessee with the Tennessee Secretary of State and (1) 51% of its employees are domiciled in Tennessee, or (2) is a Headquarters Facility as defined by T.C.A. § 67-6-224, or (3) a majority of its senior management are domiciled in Tennessee. A street address must be submitted as part of the company’s application. Companies that receive capital from InvestTN agree to remain located in Tennessee for at least 24 months from the date of receipt of funds.

InvestTN portfolio companies and funds, including the portfolio company recipients of SSBCI capital from those funds, are required to participate in quarterly and annual reporting requirements. This data will be collected and submitted to TNECD by Launch Tennessee, for submission to the U.S. Department of the Treasury by stated deadlines.

All investees are required to make available to the Treasury Inspector General and the Government Accountability Office all books and records related to the use of the SSBCI funds, subject to applicable privacy laws, including but not limited to 12 U.S.C. § 3401 et seq., including detailed loan and investment records, as applicable.

Each state, including Tennessee, received an initial SEDI allocation from the US Department of Treasury and we will be following programmatic requirements related to that allocation as prescribed by the SSBCI program. Additionally, the State of Tennessee requires a minimum 58% of invested funds to meet SSBCI’s SEDI-owned business definition.

‘SEDI’ refers to Socially and Economically Disadvantaged Individuals. A portion of SSBCI capital will be invested into SEDI Owned and Controlled businesses meaning at least 51 percent of the business is owned and controlled by SEDI individuals meeting one or more definitions from the following criteria:

1. CDFI Investment Areas: Individuals whose residences and/or business address are located in CDFI investment areas, or the business will operate a future location in a CDFI investment area. 
2. Additional SEDI Definitions: Individuals who have had their access to credit on reasonable terms diminished as compared to others in comparable economic circumstances, due to their:
   1. Membership of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society, such as Black, Latino, and Indigenous and Native American persons; Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender, and queer (LGBTQ+) persons
   2. Gender
   3. Veteran status
   4. Limited English proficiency
   5. Disability
   6. Long-term residence in an environment isolated from the mainstream of American society
   7. Membership of a federally or state-recognized Indian Tribe
   8. Long-term residence in a rural community
   9. Residence in a U.S. territory
   10. Residence in a community undergoing economic transitions (including communities impacted by the shift towards a net-zero economy or deindustrialization)
   11. Membership of another underserved community, such as persons otherwise adversely affected by persistent poverty or inequality

Prior to receiving investment from InvestTN, the company must sign a certification to verify compliance with the venture capital program conflict of interest standards set forth in Section VIII.f of the SSBCI Capital Program Policy Guidelines (starting on page 31). 

Briefly, these standards provide that no SSBCI insider, or a family member or business partner of an SSBCI insider, has a personal financial interest in the investee unless an exception specified in Section VIII.f of the SSBCI Capital Program Policy Guidelines applies. The terms “SSBCI insider,” “family member,” “business partner,” and “personal financial interest” have the meanings set forth in Section VIII.f of the SSBCI Capital Program Policy Guidelines.

An SSBCI Insider may co-invest alongside SSBCI capital into new investments so long as an SSBCI Insider does not have an existing financial interest in the company prior to the transaction in question. However, SSBCI capital will not be available for follow-on investment consideration following this initial investment.

InvestTN will request the company’s latest capitalization table as part of the application process to compare the list of investors against the State of Tennessee’s list of SSBCI Insiders. If there is an SSBCI Insider listed on the company’s cap table, the company will not be eligible for investment.

We ask that you first complete our Intake Form. Based on what you share, our investment team will be in touch to facilitate the Regional Seed Fund or Technology Fund application process. The process from start to finish can be completed in a matter of weeks or months depending on the completeness of your application, the volume of applications currently being processed by our team, among other factors.

• Eligible: Companies with scalable business models that are located in Tennessee and are well suited for venture funding. In short, we are looking to invest in great companies with business models built to generate strong capital returns for our fund.
• Ineligible: Companies that partake in speculative activities (oil, stock trading, etc.), companies that earn more than half it’s revenue from lending activities, pyramid sales, activities prohibited by federal law (such as cannabis/marijuana), and gaming/gambling activities.

For Startups, investments will be made into companies receiving a majority vote (minimum 3 out of 4) from the InvestTN Investment Committee. Committee meetings are generally held weekly on Tuesdays.

Yes, though a company does not need to raise matching capital nor secure a lead investor prior to submitting an application to InvestTN for investment.

The 1:1 private capital match requirement is considered on a per transaction basis, and private investment must be made on the same terms as the InvestTN Fund. Debt and grant financing, including personal capital provided by the founder(s), do not meet the requirements of the private match. Capital invested prior to InvestTN’s investment will not qualify for the 1:1 private capital matching requirement.

All approved investments will enter legal diligence, including required SSBCI program certification. Sample certifications are available here, including Use of Proceeds and Conflict of Interest, Sex Offender, SEDI-Owned Businesses (as applicable).

InvestTN may elect to pass on an investment opportunity at any point in our process. You will be notified by email, including any immediately available feedback. Due to the volume of applications we are not able to offer individual feedback calls or meetings. For eligible companies and venture capital funds, you will have the opportunity to re-apply for funding at a later date. Declined applicants may seek technical assistance through AssistTN. 

InvestTN has the ability to lead investments, meaning we can work with the company’s CEO and founders to set terms for the investment round, though this is not required. If the company has terms already set for their investment round, InvestTN will evaluate these terms and factor these into the investment decision made by the Investment Committee. Our interest is to both generate a return on investment of InvestTN capital, and to set the company up for success in the future from an equity ownership standpoint.

Yes, InvestTN has the ability to lead investments from our $30M Technology Fund. This fund can write $250k to $3M initial equity investments into early-stage startups.

Yes! Investment capital from angel investors made on the same terms as InvestTN within the same transaction (at the same time) can help satisfy the 1:1 private capital match.

Proceeds will be used solely for a business purpose, and not for any prohibited activities such as repayment of delinquent taxes, repayment of taxes held in trust or escrow, or purchasing ownership interests of any owner. Additionally, capital cannot be invested into companies performing speculative activities, generating more than half of annual net revenue from lending activities, conducting pyramid sales, conducting activities prohibited by federal law (including cannabis companies), and deriving more than one-third of gross annual revenue from legal gambling activities.

A venture capital fund is an entity that meets the SEC’s definition of venture capital fund as displayed here. All other types of funds will not be considered for investment at this time.

InvestTN will make investments into the first closing of a newly formed early-stage venture capital fund, committing between $1M and $3M. Target fund sizes range from $10M to $30M, with the ability to invest into a sidecar fund. Tennessee-located and/or Tennessee-focused funds should consider applying for InvestTN Multi-Fund investment. Multi-Fund portfolio funds must invest our committed capital in line with SSBCI program guidelines.

To get started, submit a completed application here. The process from the time your application is submitted through investment decision and legal review is expected to take several months, at minimum. We are required by the State of Tennessee to run a fair and open process in the selection of funds receiving investment. We seek to meet with all potentially eligible venture capital funds in Tennessee as part of our market assessment.

For Venture Capital Funds, capital commitments will be made into funds that receive unanimous approval from the InvestTN Investment Committee. Committee meetings are generally held weekly on Tuesdays.

Per SSBCI program guidelines, a standard management fee is not provided as part of our capital commitment.

Per SSBCI program guidelines, standard fund formation costs are not covered by InvestTN capital.

A fee for portfolio company services averaging 1.71% annually over the life of the InvestTN program can be leveraged to cover expenses relating to financial management, operational guidance, IT consulting, and connecting portfolio companies to potential customers, investors, board members, and officers. Multi-Fund recipients are required to identify the services to be provided to portfolio companies and annually certify that these services were provided. The agreement between the Fund and their SSBCI portfolio companies must disclose these services offered by the Fund. This information must be reported to TNECD in annual reports.

The 1:1 private capital match must be met at the fund level, with private (non-public) investment equal to or greater than the SSBCI investment into that fund.

SSBCI program guidelines require certification at the time of InvestTN’s investment pertaining to ‘Use of Proceeds’. Funds from the State Small Business Credit Initiative (SSBCI) may only be used for certain business purposes. For more information, review SSBCI sample certifications.

When investing SSBCI capital as an InvestTN Multi-Fund recipient, you must abide by all SSBCI program guidelines, including the completion of required certifications (sample certifications are available here, including Use of Proceeds and Conflict of Interest, Sex Offender, SEDI-Owned Businesses, as applicable), 1:1 private capital match, among other requirements. Additionally, demographic data collection at the time of investment is encouraged and will be submitted as part of annual reporting. InvestTN will supply Multi-Fund recipients with language to include in side letter agreements made between your fund and portfolio companies receiving SSBCI capital to abide by and enforce all SSBCI programmatic requirements.

A side car fund may qualify for SSBCI-supported investment under the Capital Program Policy Guidelines to the same extent as an investment in a main fund if it satisfies the conditions described by the SSBCI program.

No. InvestTN strictly follows the U.S. Department of the Treasury’s SSBCI 2.0 program guidelines, prohibiting the investment of SSBCI capital into portfolio companies given there is an existing financial interest. As such, InvestTN’s capital commitment into newly formed funds must be used to invest in new companies, rather than existing portfolio companies.