10/7/03
Chattanooga, Tenn. -- U.S. Senate Majority Leader Bill Frist and Congressman Zach Wamp today joined with Appalachian Regional Commission federal co-chair Anne Pope, Tennessee Valley Authority director Bill Baxter and several others to announce a new $12.5 million Southern Appalachian Venture Capital Fund during the second day of the Tennessee Valley Corridor Summit in Chattanooga.
"The launch of this Southern Appalachian Fund is a landmark event for our region. This fund will be a source of equity capital for businesses that historically have not had access to equity capital," Wamp said. "Not only does this new fund make new equity capital available to our region, it actually targets our region, and that will be a big help as we work to grow new technology companies and new high-tech jobs here in the Tennessee Valley."
The Southern Appalachian Fund is an approved New Markets Venture Capital Company and will operate a community development fund that provides equity for early-stage and growth companies in Tennessee, Kentucky and the Appalachian counties of Alabama, Georgia and Mississippi.
"I salute and thank the ARC, TVA, Tech 2020, Kentucky Highlands and all of the partners for their major investments and for their ongoing commitment to the development of our region," said Sen. Frist. "This is exactly the kind of public/private partnership and multi-state cooperative needed to take full advantage of the many science and technology assets we have here in the Tennessee Valley for new job creation and new business development."
Investors and limited partners, whose contributions to the fund total $12.5 million, include major contributions from the Appalachian Regional Commission and TVA, along with the U.S. Small Business Administration; the F.B. Heron Foundation; the John D. and Catherine T. MacArthur Foundation; BankOne Neighborhood Development Corporation; National City Bank of Kentucky; Farmers and Merchants Bank of Clarksville, TN; First Bank of Lexington, TN; Tennessee Commerce Bank of Franklin, TN; and Concord EFS, Inc.
"The Southern Appalachian Fund is an example of how TVA and our partners can work together to encourage job creation in communities facing tough economic challenges, " said TVA Director Bill Baxter. "We’re excited to have this fund now open for business to help Valley businesses."
"One of ARC’s main objectives is to help diversify the economy by finding innovative ways to attract the capital necessary for business growth in the region," said Anne Pope, federal co-chair of the Appalachian Regional Commission. "Today we can see the value-added when federal agencies work together with the states and private enterprise to find creative solutions to regional problems."
Technology 2020 and its finance affiliate, Southeast Community Capital, from Oak Ridge, Tenn., have partnered with Kentucky Highlands Investment Corporation of London, KY to establish the Southern Appalachian Fund.
"We look forward to the opportunities that the Southern Appalachian Fund will bring to our region," said Ray Moncrief, Executive Vice President and Chief Operating Officer of Kentucky Highlands, and President of Appalachian Management Company, LLC.
In addition to the equity investments the Fund will make, the Fund will also be able to provide operational assistance to actual or prospective portfolio companies. The operational assistance might include marketing, accounting, legal, engineering and other technical assistance that aids a small business in its development. The objective of the operational assistance will be to support the Fund’s actual and prospective companies which will promote economic development and the creation of wealth and job opportunities in low-income areas and could also serve to enhance the Fund’s return on investment.
"We hope the ability, through operational assistance, to support and grow the companies in which the Fund invests could prove particularly beneficial to them," said Tom
Rogers, CEO for Technology 2020. "This is a big win for our region, and we are ready to go to work."
Understanding that venture capital is the mother’s milk of business and industry, the Appalachian Regional Commission steadily works to develop innovative ways to attract more capital to the region. Over the last five years, the ARC has invested in and helped to facilitate the creation of eight new venture capital funds making over $160 million available to business across the region.
In 2002, TVA and its partners helped companies attract or retain more than 48,000 jobs across the Tennessee Valley. TVA’s economic development loan programs provided $22 million in loans, leveraging more than $180 million in funding from other sources.
Technology 2020 is a public/private partnership in Oak Ridge, Tenn., whose mission is to start and develop technology businesses. It has helped more than 80 technology start-ups create more than 700 new jobs since beginning operations in 1995.
Kentucky Highlands is the nation’s oldest venture capital company targeting rural America. It has invested in more than 80 businesses, which has helped create more than 4,500 jobs and $1.1 billion in sales.
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