In 2009, the Tennessee General Assembly began working with TNECD Commissioner Matt Kisber and Revenue Commissioner Reagan Farr to craft legislation designed to increase the flow of capital to innovative new companies in Tennessee in the early stages of development. Initially proposed as a template of CAPCO legislation adopted by other states, policy makers in Tennessee decided to take a different approach in seeding small businesses with the capital needed to bring a new idea to the broader marketplace and create jobs in the process.
The result was the TNInvestco program, which allocated $200 million dollars in tax credits to a cross section of venture capital funds with broad experience in developing new companies in Tennessee. Those funds would market the tax credits to insurance companies which would purchase the credits with capital reserves and the venture funds would use the capital to help Tennessee companies grow. Reporting requirements and independent audits of the TNInvestco firms were put in place by the Legislature to provide oversight and accountability of the program. Additionally, an annual review of the program will be completed by TNECD and an annual report will be published and provided to the Governor, Legislature, Comptroller and the public.