Investment banker Tom Wylly formally launched the Nashville Capital Network (NCN) this morning with the announcement that Sid Chambless has been named executive director. Before a crowd of roughly 50 at Vanderbilt's University Club, the recently formed 501(c)3 was presented as the successor organization to the Nashville Angel Network.
The NCN intends to bring promising entrepreneurs in need of early-stage capital together with angel investors. It is a joint venture of Vanderbilt, the Nashville Technology Council, the Nashville Health Care Council and the Nashville Area Chamber of Commerce.
Chambless, 29, is a recent graduate of Vanderbilt's Owen Graduate School of Management. Previously, he was an executive vice president of Surfari Inc. and worked in sales for the Nashville Predators NHL franchise.
Wylly, who is a principal with Brentwood Capital Advisors, stressed the importance of preparation and education in the process for early entrepreneurs. With the creation of a full-time executive director position, NCN hopes to provide resources for entrepreneurs through counseling on business model dynamics and knowledge of angel investor interest. Three interns from the Owen School are currently working alongside Chambless to aid in customizing matches between entrepreneurs and angel investors.
Funding for the network is coming mostly from Vanderbilt, which is providing $145,000 toward the group's $170,000 annual expenses.
The NCN is an invitation-only, membership organization of private investors interested in evaluating potential seed or early-stage investments. To qualify for membership in an NCN angel group, an investor must be accredited and interested in making investments of at least $100,000 in one to three deals over the coming year. Angels may be passive investors, or they can take an active role by choosing to mentor their entrepreneur. Wylly encouraged angels to coach entrepreneurs on preparing and presenting the financial elements of their business plans. He likened this role to performing jury duty. Chambless said that NCN favors local deals, but is open to those beyond Nashville.
Members of the NCN angel group must pay $500 in annual dues; entrepreneurs pay $300 for NCN’s resources. Wylly said that both of these fees are less than those in other cities.
The NCN targets early-stage companies interested in raising equity capital in the $250,000-$1.5 million range. Seven companies that presented to the Nashville Angel Network ultimately obtained funding, two directly from NAN members and five from sources outside of Nashville.
Based on a survey of entrepreneurs who went through NAN, Wylly said more than 90% of the companies perceived the process to be a positive experience.
NCN is overseen by a board of directors that includes Wylly, who chairs the NCN; Townes Duncan, who led the Nashville Angel Network and is president of Solidus Co., which is an NCN sponsor and an investor in Nashville Post Co.; John Harrison of Harbert Management Corp., an NCN sponsor; Owen School professor Germain Boer, who leads the Owen Entrepreneurship Center; David Condra, president of the Nashville Technology Council; Bruce Lynskey, an Owen School clinical professor of management and an entrepreneur; Tom Cigarran, chairman of the Nashville Healthcare Council and founder of American Healthways, an NCN sponsor; Hal Andrews of the Young Healthcare Leaders and an executive with Essent Healthcare; Paul Wallace of American Healthways; Tom Noland in Vanderbilt's Office of Enterprise Development; John Danner, an angel investor in technology companies and founder of NetGravity; Page Davidson, a partner with Bass Berry & Sims, an NCN sponsor; Stuart Campbell, chairman of the Nashville Technology Council and a partner with Stites & Harbison, an NCN sponsor; Chase Cole of Waller Lansden Dortch & Davis, an NCN sponsor; Donald McKenzie of Stokes Bartholomew Evans & Petree, an NCN sponsor; Jim Kever, co-founder of Envoy Corp. now affiliated with Voyent Partners; Jon Billington of Ernst & Young, an NCN sponsor; Kevin McDermott of KPMG, an NCN sponsor; and Katie Gambill of Council Capital Management. Buffkin & Associates and Clayton Associates also are NCN contributors, as is the Nashville Health Care Council.
The kickoff meeting for Nashville Capital Network angels is slated for October 15. Wylly said he anticipates the launch to attract 40-50 angels, but estimates there are at least twice that number of private investors in the community who would be interested in becoming angels.