Updated 5 p.m.

At the afternoon press event, Economic and Community Development Commissioner Matt Kisber provided the bulk of a presentation aimed at "setting the record straight" on the state's TNInvestco program and arguing for the passage of a bill that would expand it by $80 million.

Kisber said there’s already been a "strong, positive" impact from the program, which thus far has plugged $2.5 million into nine companies and has two deals in the works. Backing him up was Nashville Area Chamber of Commerce CEO Ralph Schulz, who said expansion of TNInvestco "means more capital for small businesses in Tennessee and more jobs for Tennesseans at a time we need that job growth." Representatives from TNInvestco-funded companies New Day Pharmacy and TrakLok each said the funding has helped their businesses grow and create jobs.

In regard to questions about the TNInvestco program’s transparency, Kisber said: "Those who say we haven’t been transparent and haven't justified our decisions simply have not been paying attention." Kisber pointed to public meetings, press conferences and documents made public on the TNInvestco website as proof of the program's openness.

Further, he said the new legislation makes the program even more transparent by requiring TNInvestcos to post annual reports online and submit them to the state comptroller and treasurer, instead of just filing them with the Governor and General Assembly. It also requires TNInvestco funds to obtain permission from the state before a qualified investment is sold to a TNInvestco affiliate, and it mandates that all money dispersed to a TNInvestco fund must be done through a Tennessee treasury escrow account in order to create a clear audit trail.

And "to those who suggest our selection process bypassed experienced venture capitalists in favor of novice investors," Kisber pointed to the resume of TNInvestco fund manager Mike Shmerling, chairman of XMi Holdings and Choice Food Group. Shmerling, in turn, mentioned TNInvestco participants Harry JacobsonDennis Bottorff as other experienced professionals involved in the program, and added that the additional venture capitalists in line for funding will give TNInvestco a "very deep bench" of business acumen and experience. and

Capping the presentation was Sen. Doug Overbey, a sponsor of the expansion bill, who asked legislators to do what they did last year and pass the TNInvestco bill.

"This is a jobs bill … that will employ our friends and neighbors," he said.

 

As originally reported:

The TNInvestco program is good for business — don't believe everything you hear about it. That's the message business and government leaders plan to deliver today at a press conference urging the Tennessee General Assembly to pass legislation expanding the program by $80 million.

Launched in 2009, the Tennessee Small Business Investment Company Credit Act originally provided $120 million in tax credits to six state-selected venture capital groups. After selling the tax credits to insurance companies, the TNInvestcos must invest the proceeds in qualified small businesses across the state to help spur economic development.

This afternoon, Nashville Area Chamber of Commerce CEO Ralph Schulz will be joined by Tennessee Economic and Community Development Commissioner Matt Kisber, Revenue Commissioner Reagan Farr, TNInvestco managers and small businesses that have received funding from the program to urge the Tennessee General Assembly to approve the additional $80 million in tax credits that will fund the four TNInvestco finalists not included in the first go-around.

Today’s event is intended to address "misinformation about TNInvestco" and discuss "safeguards put in place to ensure small businesses in Tennessee benefit from its implementation and the oversight mechanisms put in place for TNInvestco," according to the media advisory.

Ever since the state selected the program's 10 finalists in October, questions and criticism of the program's administration have circulated. Most noticeable was venture capitalist Larry Coleman’s court petition seeking access to TNInvestco documents showing how the state selected participating TNInvestcos.

When he filed the petition, Coleman questioned the integrity of the program's selection process and oversight, noting that "most of the venture capital firms that had long and measurable track records" were eliminated. Coleman's petition was denied, and the case is now before the Tennessee Court of Appeals.

The expansion legislation has passed the commerce committees of both the House and Senate and is up for consideration in both chambers' finance committees this week.

This story will be updated after the 3 p.m. press conference.