TNInvestco was created in 2009 in Tennessee to invest in early stage companies. Like Pennsylvania in 1983, state leaders had the business savvy to understand that these investments pay dividends in terms of jobs, tax revenue and the, harder-to-quantify-but-just-as-important, building of an early stage company development ecosystem.
There is some criticism coming at the effort: the program hasn’t created enough jobs; they haven’t invested in the right companies; the program shouldn’t have invested in its funds with the VC’s who have a different mission than the state. Some of this is fair, some is not.
For starters, what was the job creation goal of the program? Assuming the number of 60 jobs is real and bona fide, what do you want for two years of investing? One of the beauties of the Ben Franklin program in PA is that it was allowed to breathe. Big job numbers do not occur in 2 years, they occur in 5+ years. Tennessee needs to have experienced people helping them set goals for the program…maybe not the people getting the money, of course!
Nor should the VC’s be expected to invest in companies that both 1) fit the financial expectations of their limited partners AND 2) fit the job creation needs of their legislator limited partners. You will not get the results either is looking for. Many, many tech companies do not create a lot of jobs. Twitter? Facebook? Zynga? Financial grand slams that really don’t deliver the jobs/$ invested metrics that states should be seeking.
Take a longer term view. New angel investors are advised that, usually, it is a 7-10 year commitment before financial success is achieved. TNInvestco in this case is essentially an angel investor and complaining about “low jobs” without understanding the process of company creation and without comparing the results with the targets is unfair. And it should not derail the program before it has had a chance to work.