Our Strategy

Proven Investment Strategy

The Solidus management team has significant experience in seed and early-stage investing in the State of Tennessee. Together, the principals have invested over $112 million in 48 companies over a 24-year period. Of these investments, 27 have been realized to date and the remaining 21 are currently operating. The principals have a strong investment track record from any point of view. A summary of this record includes:

  • Stage: 47 of 48 investments were in seed or early-stage companies
  • Geography: 43 of 48 investments were in Tennessee companies
  • Job creation: 20,197 high-paying jobs created (average 421 jobs per investment)
  • Follow-on capital: Over $300 million in follow-on capital into Tennessee (excluding Solidus’ investment)
  • Financial return: For realized investments, $63 million invested capital has produced $164 million of capital (return of 2.6x)

Strong, Experienced, and Consistent Team

The principals of Solidus-TNInvestco have 32 years of collective experience executing the exact strategy they plan to implement in this program. They have extensive knowledge in originating, structuring, closing, managing and realizing portfolio company investments. They have built a state-wide network of professional relationships to aid in sourcing investment opportunities, creating business development leads for the portfolio company and recruiting additional talented personnel to portfolio company management teams. They have also previously held executive management positions in operating companies. This is the set of experiences, resources, skills and abilities that the principals of Solidus-TNInvestco will use to partner effectively with the state to create transformational economic development.

134% of Base Investment Amount to Early-Stage Investments

Solidus-TNInvestco will make financial and operational commitments that will enable it to invest over $18 million into early-stage, Tennessee-based companies. Our capital strategy will further the goal of creating additional companies and high paying jobs in the state. We believe these commitments clearly align Solidus-TNInvestco with the goals and intent of the program and the state agencies that have sponsored the program.

Fully-developed, systematic process

For over two decades, the principals of Solidus-TNInvestco have been enabling entrepreneurs to turn visionary concepts into companies that introduce industry-changing innovations, create large numbers of jobs and deliver financial returns to investors. This effort is not simple or straightforward. Many investment firms expect to create successful companies by reviewing deals and writing checks. Solidus understands that the process of indentifying small, high-potential companies, mentoring the founders, and building an enterprise into a large, transformational company takes longer and is more complex than most investors expect. We have developed a longer-term, holistic approach to the process of building companies. Deal review and investment is only the starting point of the process – not the end. Developing the right management team is a critical component in building a great company, but not solely sufficient. Solidus has positioned all of the necessary services to provide support and assistance to entrepreneurs during each stage of the portfolio company’s development. This simultaneously creates goodwill with management teams, increases the portfolio companies’ odds of success and improves the fund’s financial performance.

Emerging Industry Accelerators

Solidus believes that as a means to achieve the maximum economic development outcome for the state, recipients of TNInvestco allocations must be prepared to utilize their capital in support of the overarching Tennessee Economic Development Playbook. We will commit that 10-20% of our base investment amount will be used to foster and develop emerging, high potential industries in Tennessee. We have selected three industries in specific regions of the state where the existing Solidus expertise, deal flow and network of relationships match existing assets of the region.

We plan to use a relatively small amount of capital as a catalyst to build upon existing resources and bring more exposure to Tennessee from around the country. Solidus-TNInvestco will launch three business accelerators with an explicit mission to invest in start-up companies within a targeted industry and city. In Nashville, we combine health information technology and digital music into one broader category of digital content. In Memphis, there is an incredible opportunity in logistics, particularly as it relates to applied technology and data services. Finally, in Chattanooga, we will pursue transportation, with an eye to leveraging resources in applied technology and media.

Each city and target industry will require a unique strategy tailored to the opportunity. However, each will share the following basic framework. Solidus will identify and recruit leading industry experts to join an Advisory Board. This Advisory Board will bring invaluable knowledge in the target industry as well as the local community. Because our advisors will be highly motivated to foster the development of their industry in Tennessee, we believe that they will be willing to work for little, if any, economic consideration. Advisors will also have strong personal contacts that may be used to the benefit the accelerator. Utilizing this group for input, Solidus will craft a plan to both support local entrepreneurs and import entrepreneurs from across the United States to the target city to launch a new company in the designated industry. In this way, a very small amount of invested capital (<$1 million per accelerator) will have a dramatic impact.

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