The Tennessee Small Business Investment Company Credit Act (the “Act”) was signed into law on July 9, 2009 as Public Chapter 610. The Act offers $120 million in gross premiums tax credits to insurance companies that invest in companies certified by the State of Tennessee as “TNInvestcos.” A total of six TNInvestcos will be authorized to invest funds in qualifying Tennessee small and start-up businesses.
TriStar Technology Fund (managed by TriStar Technology Ventures) was selected as one of the initial six TNInvestcos.
The goals of the TNInvestco program, as outlined by Tennessee Economic and Community Development Commissioner Matt Kisber and Revenue Commissioner Reagan Farr, are to develop Tennessee’s entrepreneurial infrastructure, to bring additional capital into the state, to diversify the state’s economy and to create “anchors” or “clusters” of business innovation which can result in new companies being created or spun off and new talent being attracted to Tennessee.
In order to invest capital into a company under the TNInvestco program, a business must meet the following requirements:
- The business must be independently owned and operated.
- The business must be headquartered in Tennessee; its principal business operations must be located in Tennessee, and at least 60% of its employees must be located in Tennessee.
- The business must not be principally engaged in professional accounting, medical, or legal services; banking or lending; real estate development; insurance; oil and gas exploration; or direct gambling services.
- The business must employ no more than 100 employees.
Once a business qualifies to receive investment funds, it may continue receiving funds so long as it continues to be headquartered and principally operated in Tennessee with at least 60% of its employees located in Tennessee.
TriStar Technology Ventures and our portfolio companies, in which we invest, shall strive to maximize the participation of minority-owned businesses and woman-owned businesses to reflect the racial, ethnic and gender diversity of Tennessee’s population. Additionally, TNInvestco is an equal opportunity program and does not discriminate in employment or investment on the basis of race, color, religion, sex, national origin, citizenship status, age, disability, political affiliation or belief.
Through the TNInvestco program, TriStar Technology Ventures has capital available to invest in businesses including, but not limited to, minority-owned businesses and woman-owned businesses pursuant to the restrictions in the Tennessee Small Business Investment Company Credit Act. Each TNInvestco, including TriStar Technology Ventures, shall coordinate its efforts to strive to maximize participation in minority-owned businesses and woman-owned businesses with the efforts of the State of Tennessee’s Department of Economic and Community Development (ECD).
“Minority-owned business” means a business that is wholly owned, or at least fifty-one percent (51%) of the assets or outstanding stock of which is owned, by one (1) or more individuals who are members of any racial or ethnic minority within the state and whose management and daily business operations are under the control of one (1) or more members of any racial or ethnic minority within the state.
“Woman-owned business” means a business that is wholly owned, or at least fifty-one percent (51%) of the assets or outstanding stock of which is owned, by one (1) or more women and whose management and daily business operations are under the control of one (1) or more women.
Additionally, the ECD has the Business Enterprise Resource Office (BERO) that offers procurement assistance and development opportunities to small and minority- and women-owned businesses. For more information go to their website at: http://www.state.tn.us/ecd/bero/.
TriStar is committed to the state of Tennessee and looks forward to working with the other TNInvestco recipients to create and invest in transformational companies. The other TNInvestco recipients include:
- Tennessee Community Ventures Fund, LLC
- XMi High Growth Development Fund, LLC
Nashville and Chattanooga, Tennessee
- Limestone Fund, LLC
- Innova Fund II, LP
- Council & Enhanced Tennessee Fund, LLC
- Solidus-TNInvestco, LLC
- Tennessee Angel Fund, LLC
- Memphis Biomed Ventures Tennessee I, LLC
- NEST-TN, LLC