Nashville business journal

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They have been warned that the odds are against them, that the risks are high. Yet entrepreneurs choose to abandon more stable career paths for the possibility of changing the status quo — and making a profit. Sometimes that success comes, but more often, it does not. 

“There is so much hype around entrepreneurship,” said Sid Chambless, an investor leading Nashville Capital Network. “Entrepreneurship is extremely difficult. It leads to many sleepless nights … It’s really hard and most companies don’t make it.”

The strongest efforts may not materialize into the founders’ early visions — the demand for a product flagged, the team fell apart or capital could not be raised. Roughly half of businesses survive after five years and about a third make it beyond 10 years, according to the U.S. Department of Labor Statistics. For companies backed by venture capital, only a fourth return capital to investors, according to a Wall Street Journal report citing Harvard Business School lecturer Shikhar Ghosh.

“I would relate it to having children,” Jason Moore, founder of Nashville-based Strata San, said. “Everyone says it’s hard. You believe them, but you don’t know until you have them.”

In the past decade, The Tennessean has introduced readers to more than 100 local startup companies seeking to introduce a new product or solve a pain point for other businesses or consumers. They represent just a sample of the companies being created in the Nashville area. 

When they launch, founders are optimistic about their prospects and determined in their mission, embarking on a business endeavor that is known to be full of obstacles. Years later, some have made their many millions with established companies, some run companies still gaining traction and many others have decided to move on.

What follows is an updated look at the performance of most startup businesses that were covered by The Tennessean and were created between 2010 and 2015. Those years reflect a critical turning point for entrepreneurship in Nashville: The Nashville Entrepreneur Center launched and expanded; the state-funded business investment initiative Invesco was created; the state’s Launch Tennessee program took on a larger role; and Jumpstart Foundry, a Nashville business accelerator program, was launched and transformed into a health care investment fund. Nashville began to gain recognition regionally and nationally as a startup hub.

Many companies are still in the game today, while several have “faded into oblivion,” as one founder described. Others have sold, some for a meaningful profit, others at a significant loss, though terms are rarely disclosed. Only a handful have sold for sums exceeding $100 million, returns that have greatly rewarded founders and investors.

“That’s part of what makes it good, is that it’s hard,” Jumpstart Foundry founder Vic Gatton said. “You don’t make 40 times your money if you buy HCA stock, but it’s super risky, too.”

For companies that have reached that top threshold, including Navi Health and Aspire Health, their success has come from both the scope of the problems they seek to solve and their strong teams, said Chambless, who invested in Aspire Health. 

“It’s identifying a customer problem that is widespread and offering a solution to that problem,” Chambless said. “For Aspire, there was an inefficient spend on end-of-life care and they managed that care better. It was more efficient, less expensive and led to better outcomes. Both Navi and Aspire, what they have in common are extraordinary management teams. These are people that went out and absolutely hustled to get deals in place.”

But even when company founders don’t accomplish what they had hoped to, they often become more prepared for their next entrepreneurial pursuit, Gatton said. 

And for those finding the growth they were seeking; the experience has rewards that extend beyond financial and personal gain.

“I love creating something out of nothing,” said Jessica Hathcock, CEO and founder of Utilize Health in Nashville. “The more I am in it, it is this crazy, odd addiction. You want to continue to push forward because you see the progress you are making. For us, it is about the impact on the end user, the members we are serving … It’s an incredible win for all of us.”

For readers of The Tennesseans print edition, below is a list of our “Heavy Hitters” category, the most successful startups from that time period. Go to Tennessean.com for our complete rankings.

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