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VOL. 39 | NO. 20 | Friday, May 15, 2015

Nashville emerging ‘as a regional tech leader’

By Kathy Carlson

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Two very different startups speak volumes about how much the Nashville venture capital scene has changed over the years and how things are still evolving.

When Franklin-based Cybera began with three employees in 2001, it set up voice and data networks for small to medium-sized companies, using leased space on traditional telecom companies’ high-speed digital subscriber lines.

The climate for raising capital was challenging for all startups, including in Nashville. The September 11 attacks that year further slowed investment. Nashville’s main contribution to the entrepreneurial world was in health care.

These days, investment dollars are flowing more freely, and there’s more room for non-health care ventures, including a beauty-products venture born in entrepreneurship classes at Vanderbilt’s Owen Graduate School of Management.

The school, through the Sohr Grant program, has helped student ventures from Georgie Beauty to a language-learning app called Boomalang, along with health-related ventures.

“Nashville as a city is very well set up to support entrepreneurial health care,” says Cybera founder Cliff Duffey, “but I think it’s a different environment for non-health care.”

“We’ve seen increasing interest in health care-related tech.” But, he says, support for non-health care technology is “about the same as it’s been through our 15 years.” He sees the Nashville investment community gradually increasing its interest in, and support for, non-health ventures.

“Claritas Capital, a local investment group, has invested in Cybera,” he says. “They’re showing that Nashville can leverage its health care success and expertise and support investment in other areas.

“I really do think that Nashville is just beginning to emerge as a regional tech leader. Some of that is so new, just coming in the past few years. I think we’re going to see the beginning of a long entrepreneurial cycle with Nashville being viewed as an entrepreneurial city.”

Maner

Megan Maner, who co-founded Georgie Beauty with her sister, Abbey Watt, credits the Sohr Grant and a summer entrepreneurship stipend from Vandy with getting her business off the ground. She graduated Vanderbilt in 2012.

Georgie Beauty sells a line of faux eyelashes, adhesives and other beauty products at retail stores in 15 states and the District of Columbia, and through nine online retailers.

“When I was at Vanderbilt, the climate for student entrepreneurs was shifting dramatically,” she notes, in an e-mail. As more students were becoming interested in entrepreneurship, Owen responded with additional courses and what she calls “amazing opportunities like the Sohr Grant to give students access to capital to help grow their businesses.

“The start-up scene in Nashville was also booming,” she adds.

The Sohr Grant, established in 2011 by Owen School alumnus James Sohr and his wife, Leah, gives $25,000 each year to business school entrepreneurs. Maner, along with two other classmates, won the first Sohr Grants in 2011.

“The Sohr Grant was incredibly helpful in building my business,” says Maner says. “We had just launched our brand with Neiman Marcus and were preparing to launch with other retailers including Nordstrom and The Home Shopping Network.

“We used the grant money for inventory to keep up with demand, develop new products, travel to meet with our retail partners, and participate in events to help with brand awareness. In addition to the helpfulness of a capital contribution, it’s a great confidence booster and motivator to have a highly successful entrepreneur believe in you.”

This year’s winners, Boomalang co-founders Chris Gerding and Leiya Hasan, have been able to keep building the business through the grant.

Boomalang matches English- and non-English-speaking participants to build skills in each other’s language and uses games to help keep things interesting and interactive for participants.

Boomalang grew from a first-year elective class at Owen on launching ventures. Michael Burcham, local entrepreneur and former director of the Entrepreneur Center, taught the class and encouraged them to pursue their venture.

The big push now is on a Boomalang pilot program, and talks are in progress with a university in Colombia to pair its students and American students.

Gerding foresees applying to educational technology accelerator programs and eventually to angel investors for future financing. In the meantime, Boomalang is focused on getting started.

“It’s been great,” Gerding said of the Sohr Grant, thanking the Sohrs for their sponsorship. “I never recruited for any other full-time jobs this year.”

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