Vital Signs on Nashville Medical News

Vital Signs

By: ERIN LAWLEY

Vital Signs

In conjuring the TNInvestco program, Tennessee's economic development thinkers envisioned a way to help jumpstart promising, early-stage companies so those businesses will grow, add jobs, and contribute to the state's economy.

Though participating investment firms can fund companies in any industry in any part of the state, thus far the program mostly has been a boost for health-related companies in Nashville.

And there's little indication that's going to change.

The TNInvestco program was created through 2009 legislation that authorized the state to provide $120 million in tax credits to six qualified investment firms, or "TNInvestcos." The TNInvestcos would then sell the credits to raise capital for investing in small businesses.

In January, the firms raised $85 million from selling the credits. Given that five of those six TNInvestcos are based in Nashville, whose economy is dominated by the $30 billion healthcare industry, and that four of the firms name healthcare and/or life sciences among their focus industries, it seemed only logical that the local healthcare industry would see a decent chunk of those dollars.

And thus far that's been the case. Only one non-healthcare, non-Nashville firm — Knoxville-based shipping container security venture TrakLok — has received TNInvestco dollars. Of the other five TNInvestco-funded companies, all are based in Nashville, four are healthcare firms, and the fifth, social media venture GOBA, has "implications for healthcare," according to TNInvestco TriStar Technology Fund.

Since the last of those deals was made, the pool of TNInvestcos and dollars has expanded. Last month, four more TNInvestcos closed on the sale of another $80 million in tax credits, netting more than $60 million. Of those firms, two are based in Nashville, and two invest in healthcare and/or life sciences firms.

Adding it all up — that the majority of the TNInvestcos are based locally, the majority of TNInvestcos fund healthcare and life sciences ventures, that Nashville is the hot bed healthcare start-ups and that it's seen the majority of the TNInvestco deals to date— it's likely there will be more opportunities for area healthcare entrepreneurs to show their stuff.

Erin Lawley is a reporter at NashvillePost.com, a sister publication of The Medical News. elawley@nashvillepost.com.

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