Look out California and New York, Tennessee is on the rise and it’s attracting women entrepreneurs with really interesting businesses. Launch Tennessee’s (LaunchTN) is a public-private partnership focused on supporting the development of high-growth companies in Tennessee. An impressive 30% of graduates from its recent masterclass, which draws from nine accelerator programs across the state, are female founders.
Lucy Beard moved from Silicon Valley to Chattanooga. Her company, Feetz, is a ‘Digital Cobbler’ that uses 3-D printing technology to make custom shoes and delivers them within 7 days. She just raised $1.25 million from Khosla Ventures, which led the investment round, and was joined by Chattanooga-based JumpFund and former Reebok Inc. Chief Executive Uli Becker.
Sarah Bellos grew up on Long Island, NY, went to Cornell in upstate NY and worked in DC. But when it came time to choosing a place to settle down, Tennessee had what she wanted -- affordable farmland. Her company, Stony Creek Colors, based outside Nashville, creates plant-based dyes to replace petroleum-based dyes that are the leading causes of industrial water pollution. She’s raised over half a million dollars, including grant dollars from the prestigious Small Business Innovation Research (SBIR) program and an angel investor.
Casey Casterline lived in both New Jersey and New York. Her Memphis-based company, eDivv, is tapping into the sharing economy trend by creating a marketplace to trade beauty products women don’t use for products they want. She’s raised $240,000.
So what does Tennessee have?
- Less competition than in California and New York. With so much entrepreneurial activity in the hot spots, it’s hard to stand out. “It’s easier to get attention in Tennessee,” said Casterline. An example is LaunchTN’s signature event, 36|86 (formerly called Southland), which will take place from June 8-10. It highlights the best startups throughout the Southeast and connects them to investors around the country.
- Affordability. “There’s no income tax,” said Beard. “Employee salaries go a lot further,” she continued.
- Easy shipping. From Chattanooga, Feetz can ship its shoes to 65% of the country in 24 hours.
- Proximity to Oak Ridge National Laboratory, a government facility creating innovative manufacturing technologies to rejuvenate U.S. manufacturing. Stony Creek is a hop, skip and a jump from the re-emerging textile manufacturing industry in North and South Carolina. Instead of using polluting chemical dyes from China, these companies are actively seeking local companies with environmentally friendly solutions.
- Its can-do attitude. Whatever it is that you need, the teams from nine accelerator programs will find it for you, even if they have to go out of state. This includes introductions to funding sources, interns and customers.
- It’s not just work work work. It’s a fun place to live. ‘It has great outdoor activities including cycling, climbing and rafting,” said Beard. “Nashville has a great music scene,” said Bellos.
On the downside, Tennessee does not have good K-12 math and science education, which is the foundation for many skilled jobs. Casterline looked elsewhere for a web developer. Beard is taking a different approach in her search for 3-D technology skills. Since 3-D technology is a completely new field, no one has the skills. To ensure that Tennessee residents can acquire them, Beard wants to teach courses at the University of Tennessee, Chattanooga.
Finding money is always brutal. It doesn’t help that Tennessee is conservative and doesn’t have an active angel or venture capital community. However, in 2012 The JumpFund was formed. It is the Southeast’s only female-focused angel fund of women investors who invest in female-led, early stage companies. It has invested in eDivv and Feetz. LaunchTN also provides support by organizing field trips to money centers.
Because female role models and mentors are still in short supply in Tennessee, all three women maintain a network outside the area. But with women starting businesses at the rate they are, this gap may soon be filled.
Apparently Tennessee gets it: Women entrepreneurs can rev up the economy and innovate worthwhile products. Let’s hope other states get the message, too.
