• Nearly 80 percent of all venture capital investment is concentrated in only a few zip codes within the United States. The remaining 20 percent is divided across the rest of the country. In 2016, Nashville and peer cities, included in this report totaled less than 4% ($2.2 billion) of the venture capital raised. Nashville only accounted for 0.6% of the national venture capital raised in 2016.
  • Since 2016, annual venture capital invested in local companies has increased from $198 million in 2012 to $350 million in 2016. Per capita, Nashville is significantly behind its most competitive selected peers Austin, TX and Denver, CO. 
  • Tennessee’s TNInvestco and Incite Co-Investment Fund have been significant sources of venture capital within the ecosystem. However, they have been expended. TNInvestco focused on early seed funding for startups throughout Tennessee and was a significant source of funding within the ecosystem. 10
  • In 2016, unlike our leading peers Austin, TX and Denver, CO, the Nashville region bucked the national trend of contraction in venture capital investment. Despite this increase, Nashville experienced a 56% percent decline in the number of investment deals since 2014. 
  • The attention in growth stage capital by outside firms and seed-stage funding has left a funding gap for early-stage level investment. 
  • According to National Center for Science and Engineering Statistics (NCSES) the four main academic institutions receiving R&D funding within Nashville accounted for $690 million dollars in 2015 of which Vanderbilt University and Vanderbilt University Medical Center received $647 million. 
  • The Vanderbilt University Center for Technology Transfer and Commercialization licensed technology to a total of 31 companies. Of these companies, fourteen are based in Nashville. Many of the companies based in the region were started by Vanderbilt University faculty and students. 
  • Of all money awarded by the Small Business Innovation Research (SBIR) program and Small Business Technology Transfer (STTR) program,  Nashville small businesses received less than one tenth of a percent (0.07%). 


  • C1.0 Encourage commercialization of research. The research campuses within the ecosystem offer a tremendous opportunity to attract additional capital to the region by encouraging faculty to commercialize their ideas. Vanderbilt University is ranked 42nd of 225 universities by the Milken Institute in their 2017 Technology Transfer rankings.16  In Thomas Reuters’ recent ranking of 100 most innovative universities, Vanderbilt ranked 10th.17  Unlocking this potential  and maximizing the commercialization of this research would be a significant boost to Nashville’s ecosystem.  Stanford, MIT, and others have built a culture around the expectation of commercializing research and discoveries. The Global Action Platform’s Tennessee University Business Showcase is working toward improving the commercialization of research by strengthening the connection between Nashville’s universities and the business community.
  • C1.1 Continue to expand investment focus. The ecosystem must widen its view of potential business opportunities beyond healthcare and music in order to diversify and retain talent within the ecosystem.  This perspective will require venture capital to broaden their knowledge and build relationships with advisors in other industries.
  • C1.2 Get high net worth individuals off the sidelines.  It is important to instill a sense of community pride in nurturing the ecosystem particularly in early stages as angel investors.  A strong and consistent message around the importance of these investments to the city’s success should be instilled within the ecosystem’s leadership and their peers. Tennessee's Angel Tax Credit has begun to gain traction and help nudge these investors off the sidelines. In 2017 it raised nearly $5.5 million. 
  • C1.3 Instill a culture of reinvestment. As the ecosystem continues to mature, a culture of reinvestment should be encouraged in order to support the next wave of entrepreneurs.
  • C1.4 We don’t always have to swing for the fences. Too often there is a focus on finding the next billion dollar idea. The overall ecosystem suffers if there is too much focus on massive scaling of innovation at the expense of numerous other viable ideas.  A healthy ecosystem includes a wide range of companies.
  • C1.5 Fill the early-stage investment gap. As local venture capital companies continue to grow and outside companies come into the market, there is a tendency of focusing only on larger investment rounds for more mature companies. As a result, there is a considerable gap between early seed funding and growth stage investing. In order to counter this, it is important to continue to have a diverse range of venture capital options within the ecosystem.
  • C1.6 Integrate venture capital companies within clusters. Local venture capital is primarily isolated within their own clusters. They are hubs within the network. Bringing venture capital companies in closer physical proximity to the startup community will help strengthen relationships between companies and the overall network. It will also enable venture capital to keep a closer pulse on the market for opportunities and have a better understanding of them. The informal serendipitous relationships created through proximity will further enable the flow of knowledge within the ecosystem and reinforce mentorship.