Chattanooga’s startup and entrepreneurial scene has become quieter in the past few years, but there is still activity, it’s just different from Gig City’s first heyday.
In 2010, Chattanooga became the first city in the Western hemisphere to have gigabit-speed internet, which is a coveted tool for entrepreneurs. The years that followed were filled with pitch competitions, highly anticipated Startup Weeks, and national publicity about the city’s growing tech + entrepreneurial scene.
But as capital funds have been deployed and other cities have caught up to Chattanooga’s internet speeds, the organized focus on Chattanooga as an entrepreneurial center has dwindled.
However, that doesn’t mean there’s no money to fund startups, and it doesn’t mean the entrepreneurial scene is gone. It’s just different. We spoke with local experts to get their takes on where the startup scene is now and where it’s expected to go.
Terms to know
✅ Bridge financing (n.): An interim financing option used by companies and other entities to solidify their short-term position until a long-term financing option can be arranged.
✅ Business exit (n.): An entrepreneur’s strategic plan to sell his or her ownership in a company to investors or another company.
✅ Capital-raising (adj.): Relating to the actions that a company takes in order to find new capital to finance its activities.
✅ Scalability (n.): Describes a company’s ability to grow without being hampered by its structure or available resources when faced with increased production.
✅ Venture capital (n.): Capital invested in a project in which there is a substantial element of risk, typically a new or expanding business — can be provided in the form of technical or managerial expertise.
Local venture capital
💰 Charlie Brock; entrepreneur, investor
Who: Charlie Brock has been a part of Chattanooga’s startup scene for years. He served as head of The Company Lab and Launch Tennessee. He’s currently working in the finance world to give entrepreneurs new lending opportunities.
In their words
- “Capital is certainly still here,” but so is investor fatigue.
- Back 2012, Chattanooga’s high-speed internet + startups were the shiny new objects with investors like Lamp Post Group and Chattanooga Renaissance Fund.
- Chattanooga Renaissance Fund invested over 95% of its capital to businesses in a 150-mile radius of Chattanooga.
- Lamp Post invested in local startups, like Bellhop Moving and Nooga.com. (DYK? NOOGAtoday used to be Nooga.com.)
- Charlie is working with Pathway Lending to provide fair loans — especially to POC + people with lower incomes — to support entrepreneurs and small businesses.
The Company Lab, aka CO.LAB, which has been a leader in the local entrepreneurial scene officially since 2010, will soon launch a regional evergreen fund to address the early-stage funding gap as other funds have deployed their capital or closed.
- CO.LAB aims to raise $5 million and provide $50,000-150,000 investments.
- The fund will provide funds to high-growth companies operating in sectors that are strong in the region, including — but not limited to — healthcare, transportation + energy.
Dynamo founders have a wealth of experience in the industries they are investing in and saw an opportunity to to use that knowledge to invest in other companies.
In their words
Santosh Sankar, founding partner:
- The national venture capital market is healthy.
- Locally, the scene is different because there’s not a big PR push in telling the Gig City story like there has been in the past.
- There are still meaningful startups growing here.
- Currently, it’s almost like the city is replenishing its talent, drawing people who want to get out of Tier 1 cities.
What: An all-women investment group that invests in women-led ventures in the Southeastern U.S. When the organization started in 2013, less than 3% of venture capital in the Southeast U.S. went to women-led companies. (This number hasn’t moved much and it’s 1% if we are talking about women of color.)
In their words
Kristina Montague, managing partner of The Jump Fund:
- In 2018, The Jump Fund launched its second fund and has been investing in their businesses out of that for the past couple of years.
- Currently the org is focusing more on managing current companies, as opposed to investing in new ones.
- The org manages 28 companies across 2 portfolios.
- It’s currently working to “leverage additional capital and support other funds and networks,” especially ones that support women.
The BLM movement is changing some investments with more people looking to support Black-owned businesses, Kristina said.
Bonus: Local tech leader Mickey Cloud, executive director of the Sasha Group + renowned entrepreneur Gary Vaynerchuk — who has brought business and entrepreneurs to Chattanooga — recently did a keynote conversation at the virtual UnValley conference hosted by Powderkeg. They both have worked in bigger markets and talk about what makes Chattanooga special for entrepreneurs.