Tuesday, April 29, 2008

Doc Channel adds board chairman

Documentary Channel Founder-CEO Tom Neff (right) made clear in an interview this afternoon he doesn't care "whether it's a watch or a projection screen" he wants his Doc content to be available everywhere. He has a better shot at that after today's announcement that media entrepreneur and Nashville resident Jim Ackerman (left) has been named chairman of the 10-year-old venture's board of directors. Neff told us this afternoon that within 90 days the addition of Ackerman is likely to help attract further investment and help win more carriage among cable companies, telcos and other distributors, augmenting Documentary's sole existing alliance with Dish Network. Total subscribers ranges from 14 to 21 million across the schedule. Ackerman's Spinnaker Media is a Documentary investor, as well. Ackerman has over the years played lead roles with the UK's Sky Digital (BSkyB), and oversaw Sky Ventures' BSkyB’s alliances with Nickelodeon UK, Paramount Comedy Channel, QVC UK, The History Channel UK and The National Geographic Channel. He was also VP-International with A&E Television Networks and helped launch services in Latin America. Spinnaker also has stakes in Propeller Consulting, InternetSafety.Com and Famplosion! Ackerman has also served as CEO of OpenTV Corp, a provider of interactive TV technologies and services, and once served as the interim CEO of ClickStar Inc., a company founded by Intel and actor Morgan Freeman’s Revelations Entertainment. Jim Ridley's 2005 piece in Nashville Scene provided a great profile of the channel. Neff, age 54, said the channel has 18 fulltime staff, including offices in Nashville, LA and New York City. P.S.- The Documentary Channel will soon begin promoting its latest feature-length documentary, a history of the Tennessee Valley Authority.

BU incubator hatches soundAFX venture

Belmont University senior Kevin Jennings won't complete his fifth-year studies for a few weeks, but he's already 'way down the road in launching his soundAFX venture, which provides 'sonic branding' for corporations, films, video, performers and others who want to enhance the audio dimension of the brand and identity. He's one of the latest entrepreneurs to get their sea-legs in BU's campus 'Hatchery'. And, he's getting lots of help from locals who'd like this industrious fellow to succeed. Belmont prof Jeff Cornwall has been a key figure in establishing Belmont's entrepreneurial leadership. With 60 students at work in the incubator, Belmont could be spawning innovators with long careers ahead of them. For the story, click here.

Monday, April 28, 2008

Nashville's Brainpower Index

Nashvillians know "it's what's under the hat that counts." But, is Nashville at a Brainpower disadvantage? Music City has won more kudos! than most cities for its entrepreneurship, quality of life, affordability, e-government and other features. Nonetheless, earlier this month, American City Business Journals' latest brainpower index found Nashville ranked 59th, wedged-in between Cincinnati and Providence, R.I. ACBJ Reporter Scott Thomas pointed us to his methodology, here, which penalizes cities with soaring high-school dropout rates and low per-capita college degrees. Even being the home of state government and host to more than a dozen colleges and universities didn't offset our Achilles heel, K-12 education. ACBJ owns Nashville Business Journal. Top spot in this ranking? Madison (the one in Wisconsin).

Venture Notes April 28, 2008

VW -- UT Economist Matt Murray told us a couple weeks ago he was deep into a new study of the economic impact of the auto industry, and he was afraid he was going to be asked to hurry-up delivery of that assessment, to get it on the table before the General Assembly adjourns in May. Not long after our conversation, Volkswagen went public with the facts it's considering Tennessee's Clarksville and Chattanooga, as well as Michigan and Alabama sites, for a manufacturing facility. Since the news broke, Murray has been harder to reach.

Nashville -- The Entrepreneur Project of the Nashville Area Chamber of Commerce and Partnership 2010 took a big step forward last week, when a majority of the 75-member EP task force convened to consider a proposal for creating an Entrepreneur Energy Center in Middle Tennessee. The Center concept suggests the entity would, if it comes to fruit, provide services and resources to foster creation and growth of early-stage high-growth ventures. The scenario also calls for improving availability of low-cost facilities for ventures, plus a regional marketing initiative aimed at improving awareness of the region's assets. This and other ideas remain under consideration. The EP's recommendations are to be finalized and made public by
sometime in June.

Statewide -- Tennessee Technology Development Corporation is putting together an Enterprise Network, designed to connect small business owners, corporate innovators and campus-based researchers. For more information on participating, visit the TTDC site.

HealthStream beefs-up management

Jeff Doster has been named HealthStream's Chief Technology Officer, and next month he joins a company where success depends on complex technologies and continual innovation -- in face of growing competition and a shifting regulatory environment. HealthStream is shooting for about $54 million in topline revenue this year, but fresh momentum is still at least a quarter or two away. CEO Bobby Frist is holding his ground against analyst pressure for dividends. Will the company gain needed traction? Read the update here.

Wednesday, April 23, 2008

Nashville CEO reports for The Fed

Sage Group CEO Rich Ford told VNC this morning his company's recently completed first quarter was the "best we've ever had," since he and co-investors bought the company in 2002. Among the reasons? Cyclical factors and human behavior, factors he's learned to watch even more closely as chairman of the Federal Reserve Bank of Atlanta's Nashville Branch board of directors. Read the full story here.

VCs want 'disruptive' Music ventures

A music entrepreneur with an idea that "potentially blows up companies like Sony, BMG and Universal" just might attract the interest of Bay Area VCs like Chris Fralic (at left) of First Round Capital and Paul Santinelli of North Bridge Venture Partners. Yesterday, Santinelli told attendees at Leadership Music's Digital Summit at Belmont University that anything less than disruption is unlikely to earn a meeting. In addition, Santinelli said he's not interested in businesses linked directly to the fortunes of performing artists, music production or services. But, he is interested in "enablers" that improve business processes. Chris Fralic agreed, explaining that while "sexy" entertainment businesses will never be in short supply, most such ventures cannot produce the kind of returns VCs seek, largely because digital production and Internet distribution have diminished the advantages of big labels and other intermediaries and social media have democratized marketing and promotion. Santinelli said the only direct music play he'd be interested in would be in the music-subscription space. In fact, he'd gladly pay a monthly fee to have music and video entertainment he selects continually on tap through online storage. "If my music lives in the cloud, I'd be willing to pay them a monthly fee," he said. Even so, he suspects that lack of adequate online "discovery" capability -- the natural-language search technology that would enable consumers to find easily what they want -- may thwart new ventures. Other constraints cited by the two VCs included shallow song catalogs, lack of universal licensing and the risk of litigation, and subscription portability. Both men said they regularly meet with entertainment entrepreneurs, but seldom hear anything 'disruptive' -- and often walk quickly away from deals that seem likely to trigger lawsuits over copyrights and licenses. North Bridge has invested in Mozes.com, which connects fans, artists and friends via mobile messages, among other plays. First Round is in BiggerBoat.com, an advertising entertainment network. Silicon Valley Insider Managing Editor Peter Kafka moderated yesterday's VC discussion and blogged about related issues. NashvillePost.com blogged portions of the event, and The City Paper advanced it. Update: May 5, 2008 - Thanks to an anonymous reader who pointed out I had Fralic and Santinelli's respective affiliations transposed in the original text.

Another Collins investor

I'd like to think it would have eventually occurred to me to ask Mike Collins whether he was related to Tom and Stephen Collins, former owners of Juris. Thankfully, Mike had seen the blog on the Juris sale and mentioned the relationship when I contacted him Monday about 2nd Generational Capital LLC. Mike is CEO of the merchant-banking and VC company. Ten years ago, Mike and 2nd Gen conceptualized and capitalized Synaxis Group Inc., the property and casualty insurance brokerage. By 2002, they had sold it to now-First Horizon National Corp. for in about $60 million. (Another example of VCs not waiting on good deals from outside.) Asked whether it was genetics or some family corpus that led him, brother Tom and nephew Stephen into entrepreneurship and investing, Mike said Monday about the only thing they had in common in that context is they are all CPAs and all went through the PriceWaterhouse boot camp. Although the firm has a track record in diverse sectors, Mike stressed healthcare, bio/pharma and medical. And, he noted there's a venture in-the-offing, involving bridging data centers. BTW, 2nd Generation's portfolio news section makes clear the firm's wide network of co-investors. 2G is allied with KraftCPAs and Axis Accounting.

Thursday, April 17, 2008

Mid-TN coalition leverages UT-Oak Ridge technology commercialization

Nashvillians might take note that Tom Rogers (right), the long-time president of Oak Ridge-based Tech2020, is joining the Oak Ridge National Laboratory Partnership Directorate as director of industrial and economic partnerships. Middle Tennessee will be more than a blip on Rogers' radar. Because Rogers' move has been a loosely guarded secret, no one knew about it during yesterday's Vanderbilt-hosted meeting of the Mind2Marketplace technology-commercialization consortium. However, M2M Chair Andrea Loughry (left) told us this morning that tomorrow she'll meet at Oak Ridge with Rogers and his new boss, Tom Ballard, to discuss collaboration. Loughry knows how to leverage UT ties: She's not only a UT alumna, she is also Gov. Phil Bredesen's vice chair of the UT Board of Trustees. And, she's a staunch Rutherford County Chamber booster and the semi-retired co-owner of a Murfreesboro insurance firm. The MTSU- and Rutherford County-centered M2M movement was spurred by a challenge issued nearly three years ago by U.S. Rep. Bart Gordon (at right) Gordon is now chairman of the House Committee on Science and Technology. In 2005, he urged leaders in his Sixth District to help accelerate movement of local universities' intellectual property to market. Gordon's constituents are hoping, no doubt, he'll be a catalyst in driving government funding and other resources toward Tennessee, much as Rep. Zach Wamp (3rd Dist.) has done. Employing sector-specific targeting as a stratagem, M2M hopes to establish Middle Tennessee as a leader in such fields as aerospace (leveraging Tullahoma-based UT Space Institute and Arnold Engineering Development Center); biotechnology (capitalizing on MTSU programs, as well as on Franklin-based BioMimetic Therapeutics and the Cool Springs Life Sciences Center); and, distribution-logistics. The lack of an ORNL-scale innovation generator is no constraint, Loughry said this morning. She sees M2M connecting and nourishing "ideas and the persons who create them," wherever they may be. Toward such ends, M2M is also pursuing partnerships with Vanderbilt, UT-Chattanooga, Tennessee State University, tech institutions in Memphis and Huntsville, and numerous others.

Wednesday, April 16, 2008

Local VGT investing $100M in deals

Smyrna-based Video Gaming Technologies Founder Jon Yarbrough (left) told us earlier this week he plans to invest "around $100 million in private deals over the next 3 to 5 years." He said he's already spotted some deals "that were sourced locally." Now, Yarbrough said, VGT's business-development office is studying the "skills and processes" needed to achieve his investment goal. VGT, perhaps Tennessee's hottest company, makes gambling machines used mainly on American Indian reservations. In 2007, VGT won General Assembly approval for changes in law that precludes his moving dozens, if not hundreds of software jobs to the state. However, the company remains hesitant to relocate some of the highest-paying jobs, for fear state law still prohibits the work in Tennessee. Sixteen-year-old VGT handles roughly $30 billion per year in wagers, $1 billion of which goes to American Indian-owned casinos, with VGT revenues projected at roughly $200 million for 2008. According to Inc., VGT's growth rate from 2001 to 2004 was 9,721 percent. VGT's job opportunities are the type many cities and states fight to win. Yarbrough said VGT workers' average pay would easily range upward from $50,000 plus benefits, with $80,000 annual compensation a better estimate for VGT software developers, engineers and other specialists, most of whom are now in Virginia. [Revenue figures above updated 1214 CDT April 17]

NCN investment milestone ahead

Nashville Capital Network's Sid Chambless has been hard to catch in recent days, and he blamed it partly on the fact he's been working on closing the first two deals done under NCN's Angel Fund I. There will probably be 6 to 10 additional deals during the life of the Fund after these next two -- and that's in addition to deals that might be done separately via NCN's network of nearly 60 independent Angels. Chambless makes clear that after nearly five years as NCN pivot-man, he's more excited than ever about his role -- which has allowed him the catbird seat in deals done in harness with VCs and others, with aggregate value at more than $34 million. NCN also recently added Baker Donelson attorney Steve Wood to its board. For the full update, click here.

Related: Over at Belmont, Jeff Cornwall blogs a report showing Angel investors have turned even more cautious, read about it here. Also, Venture-backed IPOs and M&A activity are at a relatively low ebb, according to a recent release from the National Venture Capital Association.

Tuesday, April 15, 2008

Avondale keeps eye on local entrepreneurs

Nashville-based Avondale Partners completed more than $4.5 billion in investment-banking transactions and assignments during the past two years, reflecting six consecutive years of rising performance in the firm's investment-banking unit, across a variety of M&A, private placement, debt and other deals. They're focused on larger enterprises, but don't think they don't keep an eye on the venture sector. This morning, Pat Shepherd (at left), Avondale's senior managing partner, general counsel and chief administrative officer, told me that while "venture-stage companies just aren't our bailwick...all the companies we work with were at one time venture-stage, startup-stage companies." He added, "I think it's the sort of thing that is critical to a local economy -- that there be a kind of vibrant level of entrepreneurism. We see that in the healthcare area." He said he believes that "the more venture-stage activity you have, long term," the more vibrant Nashville's economy will be. Avondale, of course, routinely travels to visit the big institutional money. The firm will soon conduct conferences for institutional investors in New York City, covering consumer and leisure companies; and, privatization and corrections opportunities. Avondale is also considering replicating here in Nashville an institutional investors conference focusing on the healthcare sector. They've done it here before, because of Nashville's healthcare base. The company also periodically brings in institutional investors for a conference featuring chain restaurant models, partly because Nashville is so well populated with those.

A Nashville 'venture creed'

Marc Krejci's determination to find funding for his Bravato Music startup in Nashville serves to underscore the power of a Nashville venture credo that may, in fact, already be woven through many the deals done here, today. This update on Krejci (at left) also offers ideas on how Nashville might leverage the expanding energy of its venture community. Read more here.

Friday, April 11, 2008

Waddey: Nashville needs a research park

Yesterday, during an unscheduled phone conversation, Jack Waddey rose to the question with gusto. We asked his opinion on building Nashville's high-tech economy, and quickly learned that the Nashville aerospace engineer-cum-patent mediator and Waddey & Patterson attorney -- the guy who founded the Tennessee Intellectual Property Law Association (TIPLA) -- had plenty to offer. First of all, Waddey warned -- as have others -- that Nashville's HCA-ignited success in privatizing services has come with a hidden cost: Service-oriented ventures involve scant IP or technology, and are thus hard to protect from competitors. Yet, largely because of the wealth culture created by the HCA Big Boom, Waddey believes that while most Nashville entrepreneurs are hungry for "business opportunities," they have little or no interest in being part of the "heavy lifting" of research that would produce new ideas and products. In addition, he said, past political and institutional leadership has not been adequate to galvanize all stakeholders. Today, he said, there's real opportunity for progress, with Governor Bredesen and Mayor Dean in place. Among their highest economic priorities, he said, should be the creation of a research center for Nashville, a community that would leverage and augment Vanderbilt. He cited Huntsville's Cummings Research Park as a prime example of what a city can do. Thanks in part to momentum provided by government and industry, Cummings is second only to the 7,000-acre Research Triangle Park in scope and activity (RTI has 157 companies and more than 40,000 employees and contractors). The Association of University Research Parks (AURP) says there are nearly 200 such parks in the nation, most of them relatively small. There's no AURP park in Nashville. A recent Battelle report provides a virtual blueprint for what any community could attempt in fostering high-knowledge, high-paying ventures. The reports stresses growing indigenous innovative companies, rather than relying on recruiting industry from elsewhere. There's no mystery in the process, Waddey stresses, but it requires sustained effort. After all, RTI was founded 49 years ago. Waddey said Nashville civic and business leaders must come to understand that if they're not willing to "get behind" the local tech economy, "then no matter how much we talk about it, it isn't going to happen." Clearly frustrated, Waddey said, "Nashville is a fabulous city. It ought to blow the socks off North Carolina in terms of attractiveness." Instead, he observed, Nashville is assembling computers for Dell, rather than "designing the next wave." The problem, he contends, is that Nashville technology has long been "the red-headed stepchild at a church picnic." He likens it to the way the Music industry was treated, until fairly recently. Plenty of folks want to jump onboard after someone hits a homerun, but few will take the risks associated creating a knowledge foundation for Nashville. Consequently, Silicon Valley, Austin, Boston, RTI and Huntsville are among the exemplars. Asked Waddey, "What's the next big one that's coming along? Why couldn't it be Nashville?" (P.S.- Do you realize Boston is claiming to be the nation's "Hidden Hub of Music and Technology"? Nashville's Digital Music Summit is April 22. Use it or lose it, Nashville.)

Thursday, April 10, 2008

VU takes company's liquidation in stride

"This is a high-risk business," said Vanderbilt Tech Transfer & Enterprise Development Director Chris McKinney (at left), as he responded to our questions about the ongoing liquidation of one of his VU-portfolio companies. The assets of ActivBiotics Inc., based in Lexington, Mass., went on the auction block soon after the company's prize Refalazil failed in clinical trials to produce benefits for patients with peripheral arterial disease. The company had raised more than $100 million in capital, and 18 months ago had planned an IPO, before the market deteriorated. Last week, a fiduciary announced sale of ActivBiotics' IP for $3.5 million. Fully 21 companies remain active in the VU TTED collection -- including 10 in the Nashville area and 1 each in Knoxville and Memphis. Of the ventures, 15 have direct healthcare or life sciences ties. (TTED's IP licensing generated $8.4 million in FY 2007, after six consecutive years of increase. McKinney would not provide revenue from equity sales, if any, and he was uncertain how many ventures may have exited the portfolio in recent years through failure or sale.) Little is known publicly about most of the portfolio companies. We do know that Pathfinder Therapeutics and Universal Robotics continue to attract investment, and Informatics Corporation of America (ICA) on West End is making steady progress, backed by VU's patient capital. Then there's pesticide engineer TyraTech -- a publicly traded UK company, with virtually all its assets in the U.S. and roughly 23 percent owned by VU -- which seems to be in no trouble, at all, despite losing $16.5 million pre-tax last year. (An earlier TyraTech document is slightly outdated, but interesting.) Note: TyraTech Chief Science Officer Essam Enan is Vanderbilt faculty, and the company is considering, at least casually, Nashville and Research Triangle Park for a possible relocation of its U.S. headquarters, now in Melbourne, Fla. There are, no doubt, many "lessons learned" among VU's portfolio companies -- and the same could be said about the holdings of such VCs as Council Ventures. See their 10 companies here.

Legislating progress?

Despite the budget crunch, the General Assembly is trying to do some good. While new energy research and certain universities' engineering buildings may or may not get funded, among bills making progress this week were job tax credits (McNally) for (among other beneficiaries) high-tech companies with jobs that align with "the core competencies of the state's research institutions..." Can't wait to learn what that means. Perhaps equally important, long term, the Assembly is seriously considering incentives for students and schools that offer International Baccalaureate programs, as well as AP courses. There has for about four years been a great IB program at Metro's Hillsboro HS, and former Metro Director Pedro Garcia had pushed the program. In the wake of his departure, IB's fate is unknown.

Wednesday, April 09, 2008

Gazelles and Geezers

Bruce Lynskey (right) likes Sen. Diane Black's idea for tax credits for angel-fund contributors. He wrote that by creating some "large-sized serious seed-stage funds, we would certainly attract some interest," adding "...we would also need to attract some very tech savvy folks to manage such funds." Then, commenting on our post on TTDC's creating new working groups to support ventures, he argued nothing will take the place of cash and talent. He next raised questions about two of Tennessee's biggest claims to fame: lifestyle and cost of living. True, he said, Tennessee has a "more mellow, slower paced lifestyle than places like NYC, Silicon Valley, and Boston. [But,] if you are running or are an employee in an early-stage high tech firm, it is hard for me to see how TN's slower lifestyle impacts you. Your competition is not other TN firms; it is firms on the West Coast, in the Northeast, in India, or in China. You need to do whatever it takes to stay ahead of them -- and that determines your lifestyle, regardless of where you are geographically located." It got worse: From his post at Owen GSM, Bruce said he often hears of talented grads getting low-ball compensation offers from local startups. Lynskey insists they could earn much more, even after COL differences, on either coast. He says that just this week, he advised a student negotiating with a local firm to ask for twice what the prospective employer had offered, or "walk away." He said such episodes are so common, "It makes me think that the TN start-up environment is like the sweatshops of the garment industry." FULL STOP. "What if" that employer is factoring-in "quality of life"? And, "what if" that student values Nashville QoL over bigger paychecks? "What if" the dilemma is a false one, spawned mainly by low Angel-VC interest in "lifestyle entrepreneurs" (LEs) -- nothwithstanding the "LE" label worn by Hugh Hefner, among others. Angel/VCs often stress they're after Gazelles or better, not owners looking toward comfortable Geezerdom. There are, of course, significant differences among entrepreneurial types. And, yes, big surges here will require one or more "Big Wins" from among high-growth businesses. However, along the way, Nashville might do well to develop a strategy for aggressively leveraging our "LE seedbed" -- for example, by helping owners scale-up local businesses, possibly averting selling to investors who will relocate jobs and IP to other cities.

Tuesday, April 08, 2008

TN Angel Fund incentives

While in Charleston last weekend, I learned the S.C. legislature may pass incentives for creation of Angel funds -- up to 30 percent tax credit for investors contributing to funds with at least $10 million. Once back in Tennessee, I learned State Sen. Diane Black (S18-R-Gallatin) is considering something similar for next session (not now, while state revenue is running at least $165 million lower than projected). Senator Black told me this morning she's been exploring this with colleagues, senior state officials and others and believes the idea can get a fair hearing in 2009. She'll organize a study group this summer. Another source says the legislation would probably be for companies with under $3 million in sales, credits would be capped and funding priorities would probably go to companies developing or applying advanced technologies, manufacturing, or bringing capital into the state.

Perseverance: Cromwell at TTDC

Eric Cromwell, president of Tennessee Technology Development Corporation, apparently has gotten a second wind in his continuing effort to spur growth of high-tech companies, university research and tech commercialization. The question is whether or not creating new teams, announced yesterday, will produce the kind of momentum Cromwell and 10-year-old TTDC need, now they're back in the spotlight. Read the full story here.

Friday, April 04, 2008

Friday Fantasy: 'The Big Win' vs Motricity

"Big Win" (B.W.) often crops-up when you ask entrepreneurs, investors and civic boosters what Nashville needs to take its economy to that ill-defined "next level." Too often, people think the B.W. means luring a company from another city, giving the loser an economic wedgie. Seldom in the same breath do people mention how illusory such gains can be. Remember Motricity (aka, PowerByHand)? After scooping up some capital here during its all-too-brief sojourn, Founder-CEO Ryan Wuerch (at left) moved lock, stock and barrel to N.C. Now, did you notice Motricity, now international and having reverse-merged with InfoSpace, recently relocated to Bellevue (WA) and is slashing headcount? Wishful thinking: Motricity is divesting of some of its consumer businesses. Maybe Nashville investors will grab one of those assets and bring it here. Either way, it's a lesson in sic transit tech. Maybe we could get Wuerch to come tell us how we could've kept him here and avoided the 'Big Loss" (B.L.). Take it farther: We note Cisco Systems VP Dave Holland joined the Motricity board. That, in turn, reminds us of Cisco's iPrize competition, in which 1,600 individuals, comprising hundreds of teams, submitted product and venture ideas to Cisco, in pursuit of $10 million in venture capital, signing bonuses and a chance to surf the Next Wave. (Winners TBA.) Today's Friday Fantasy: Let's get Wuerch, the Cisco iPrize folks and other Big Thinkers (B.T.'s) to come to Nashville to help us think-through how to leverage our advantages and become a piston in the engine of the new economy. Maybe we connect that gathering to a Venture Forum (not unlike the TVVF) and "animate" all the pieces, as Stephen Collins said in yesterday's post about Juris. Yeah, ideas are cheap. I'm just sayin'...

Thursday, April 03, 2008

Cautionary tale: Juris jobs gone

Okay, so the Brentwood company's two entrepreneurs are looking for their next mountains to climb...but Nashville is left to reflect on how 70 jobs at the former Juris Inc. will be replaced. LexisNexis, which bought Juris last summer, confirmed today all Juris jobs will relocate to other cities. As reported on NashvillePost.com, Juris, which provides software and services for law firms, apparently commanded a premium at sale far beyond its $12 million annual revenue. Juris Founder Tom Collins, 66, told me he's disappointed LexisNexis is moving Juris jobs, and expressed regret that family-owned businesses often sell to faraway owners whose calculations are global. Tom says he'll keep writing fiction and looking for a publisher, and will play an investor role in Nashville Capital Network's new fund. Meanwhile, his son Stephen, 42, who spent five years prior to the sale increasing Juris revenue and earnings, said today he's looking for his next CEO gig. With three young children at home, Stephen said he hopes to remain here, even if his next venture requires spending time on the coasts. He's taking a sabbatical to consider the state of the world, doing a lot of competitive bicycling and some community-service work. He stressed that during his five years improving Juris operations, he was often "beyond disappointment" at how hard it was to recruit talented, ambitious people who aren't afraid of risk. Having labored in the Dot.com vineyards of New York City and elsewhere, he believes Nashville is exporting its hardiest workers to other cities that have more risk-embracing cultures. Particularly frustrating, he said, is the fact that Nashville has all the pieces -- quality of life, no personal income tax and much more. However, Steve said all those pieces "need to be 'animated'...something's got to explode here, besides healthcare." He warned Nashville's labor-cost advantages will soon erode, leaving the region at a greater disadvantage. (Pictured: Tom and Stephen)

Wednesday, April 02, 2008

VN Metrics

MIXED SIGNALS in Tennessee data appearing in today's "Cyberstates" report from American Electronics Association. VCs invested $75.6M in Tennessee tech plays in 2007 (rank 30, after a 60% resurgence in 2007, after a laggard '06), versus $212M dropped here in 2001. Of course, Cali, Tex, Va and the other "usual suspects" still lead the AeA rankings of tech jobs, payroll, R&D and the rest. And, software services and engineering and tech services are still hot. VC's nationwide put $17B into tech in '07, and tech companies poured $75B into their R&D, nationally. The latest R&D figure for Tennessee tech firms, 2004 was $3.1B (rank 33). We Tennesseans came in a dignified 25th in numbers of high-tech jobs, but 48th in tech jobs as part of all private-sector jobs. (Our high-tech jobs were down 10.7% during 2001-06.) And, we came in a humble 35th in average tech wages. That reflects the fact that the differential between tech and general private-sector wages in Tennessee, while a wide 60%, is not as strong as the 87% average wage differential, nationally. We also ranked in the top 20 states for creating new tech firms, consistent with our reputation for startups of all kinds (entrepreneurial churn, as some say). Here's the AeA report (large PDF).

Noodge from The Noog

Tech-enterprise maven Jim Frierson, after reading the VN Blog, wrote from his Chattanooga lair this morning to remind that they're not 'reinventing the wheel' in River City -- they have a long-running Venture forum called Capital Connection. Since yesterday was the deadline for proposals to present to Connection investors May 13, perhaps Jim's note was the equivalent of a Chattanooga Raspberry? P.S.-The city's also honoring innovative companies April 18, during the Kruesi Awards.

Tuesday, April 01, 2008

Angel investors

Angel Capital Group CEO Rachael Qualls of the Nashville area has aligned with a North Carolina angel fund to create a national network of angel investors and committed funds for "true seed" investing. Click here for full story.

Eaststate: Emerging from bankruptcy, Atmospheric Glow Technologies' travails remind us that even with solid IP and plenty of partners -- plus 15 or more SBIR/STTR and related research projects -- the going is tough for startups. Poor access to capital is cited as a factor in today's KNS story. Company background here.