Tennessee’s healthcare ecosystem is booming, with major players like HCA Healthcare and Change Healthcare making waves in the industry. Nashville alone has become a hub for healthcare innovation.
But, despite this explosive growth, many healthcare startups struggle to secure funding. Investors tend to favor proven models, making it tough for early-stage companies to get the capital they need to scale.
Well, we have the solution.
Aside from the major players, Tennessee also has a strong network of investors who actively fund seed and early-stage healthcare startups.
In this article, we’ll introduce you to the top 9 startup investors in Tennessee who can help turn your healthcare idea into reality.
Top 9 VC Firms in Tennessee That Invest in Healthcare Startups
Here’s a table to summarize the list quickly.
| Investor Name | Focused Sectors | Funding Stages | Notable Investments | Total Investments |
|---|---|---|---|---|
| Heritage Group | Healthcare services and Health IT | Early-stage and Growth-stage investments | Spero Health, ScribeAmerica, ClearDATA, MDLIVE | Over 30 healthcare companies |
| Pharos Capital Group | Healthcare and Healthcare-related business services | Later-stage growth and buyouts | Seaside Healthcare, IASIS Healthcare, Medfinders | Over 50 companies |
| Mountain Group Partners | Life Sciences, AgTech, Technology | Seed and Early-stage investments | Aspire Health, Castle Biosciences, G1 Therapeutics, Silicon Ranch | More than 60 companies |
| Claritas Capital | Healthcare, Technology, Media/Entertainment | Series Seed to Series C | Genomind, StudioNow | Over 100 companies ($1B+ deployed) |
| Clayton Associates | Healthcare (including Health IT), Technology | Seed, Angel, Early-stage, Growth-stage | WebMD, Sharecare | Over 100 venture deals |
| Altitude Ventures | Healthcare services and Digital Health | Seed and Series A | Opya, Doctivity Health, Mindoula Health | 30 investments, 12 exits |
| Martin Ventures | Healthcare and Technology | Venture Capital and Growth Equity | Livara, Change Healthcare | 50+ investments |
| Gen Cap America | Manufacturing, Distribution, Business Services | Acquisitions and Recapitalizations | Techlight, Lab Products | 66 investments (47 exits) |
Heritage Group
- Website: heritagegroupusa.com
- Focused Sectors: Exclusively invests in the healthcare industry. Areas of focus include healthcare services and health IT
- Funding Stages: Primarily early-stage and growth-stage investments. The firm makes both minority and control equity investments in healthcare companies (including pre-EBITDA businesses)
- Notable Investments: : Spero Health, ScribeAmerica, ClearDATA, and MDLIVE
- Total Investments: Over 30 healthcare companies backed
The Heritage Group, established in 1930, is a fourth-generation, family-owned business managing a diverse portfolio of over 50 companies.
In 2018, The Heritage Group launched HG Ventures, its corporate venture arm, to invest in innovative startups. Since its inception, HG Ventures has invested in 35 companies, focusing on areas like the circular economy, energy, sustainable materials, water, and infrastructure.
HG Ventures seeks entrepreneurs building a sustainable future in materials, infrastructure, environmental solutions, and industrial systems.
HG Ventures typically invests up to $20 million per portfolio company but has the flexibility to invest more, depending on the opportunity. They are open to investing at pre-revenue and pre-product stages, provided there is a dedicated, full-time executive team in place.
Pharos Capital Group
- Website: pharosfunds.com
- Focused Sectors: Primarily healthcare and healthcare-related business services.
- Funding Stages: Later-stage growth and buyout investments in lower-middle-market companies.
Notable Investments: Seaside Healthcare, IASIS Healthcare, Medfinders (Nursefinders) - Total Investments: Over 50 companies
Pharos Capital Group is a physician-founded private equity firm established in 1998.
The firm specializes in investing in growing healthcare companies that aim to improve patient outcomes, increase access to care, and lower healthcare costs.
Recently, Pharos Capital Group was managing its Fund IV-A, targeting $250 million, with approximately $106.3 million raised.
Pharos Capital Group seeks companies with defensible market positions, sustainable competitive advantages, and unique business models. They usually invest in startups around $10M-$20M.
Mountain Group Partners
- Website: mtngp.com
- Focused Sectors: Early-stage life sciences and disruptive technology. This includes human and animal health (e.g. diagnostics, medical devices, drug development)
- Funding Stages: Seed and early-stage venture investments.
- Notable Investments: Aspire Health, Castle Biosciences, G1 Therapeutics, and Silicon Ranch
- Total Investments: More than 60 companies
Mountain Group Partners (MGP) is a Nashville-based venture capital firm founded in 2002 by Joseph Cook Jr. The firm specializes in early-stage investments across the Life Sciences, AgTech, and Technology sectors.
Over the past 13 years, MGP has invested in 59 companies, averaging approximately two new investments annually. Investors usually focus on early-stage companies with innovative solutions in their target sectors.
Regarding investment size, MGP has participated in Series A rounds with an average size of $10 million and Series B rounds averaging $15.2 million.
Claritas Capital
- Website: claritascapital.com
- Focused Sectors: Invests in healthcare, technology, and media/entertainment companies.
- Funding Stages: Prefers companies from Series Seed through Series C.
- Notable Investments: Genomind and StudioNow
Total Investments: Over 100 venture portfolio companies backed, deploying more than $1 billion of capital to date
Claritas Capital is an alternative investments firm based in Nashville, Tennessee, founded in 2002. The firm's leadership includes Founder and Managing Partner John Chadwick, Managing Partners Theresa Sexton and Bob Fisher, and CFO and Chief Compliance Officer Jordan Michael.
Since its inception, Claritas Capital has deployed over $1 billion in capital, investing in more than 100 venture capital portfolio companies and participating in over 50 real estate deals.
Claritas Capital seeks collaborative partnerships with founders, entrepreneurs, developers, and strategic partners. They prefer startups that are at the early/seed stages and can generate 4-8x ROI. The firm organizes many pitching events, helping early-stage businesses get funded.
The investment range of Claritas Capital can go up to several million dollars.
Clayton Associates
- Website: claytonassociates.com
- Focused Sectors: healthcare (healthcare IT) and technology companies.
- Funding Stages: Seed, angel, and early-stage venture rounds (with some growth-stage follow-on).
- Notable Investments: WebMD (health information platform) and Sharecare (digital health engagement platform)
- Total Investments: Over 100 venture deals
Clayton Associates is a Nashville-based investment firm founded in 1996 by R. Clayton McWhorter, a prominent figure in the healthcare industry, and his son, Stuart McWhorter. The firm specializes in seed, angel, and venture-stage investments, primarily targeting the healthcare and technology sectors.
Since its inception, Clayton Associates and its affiliates have invested in over 100 venture deals. They operate through different investment platforms, such as Bullpen and FCA Ventures.
Moreover, CA seeks startups with experienced management teams that have a strong business model and solve modern healthcare problems through tech.
Clayton Associates has funded startups from the concept stage through venture rounds, typically co-investing $500k–$6 million alongside its network and affiliate funds.
Altitude Ventures
- Website: altvc.com
- Focused Sectors: Early-stage healthcare services and digital health.
- Funding Stages: Primarily Seed and Series A rounds (early-stage).
- Notable Investments: Opya (autism therapy telehealth platform), Doctivity Health (healthcare SaaS analytics), and Mindoula Health
- Total Investments: 13
Altitude Ventures is a venture capital firm founded in 2012, headquartered in Nashville, Tennessee, with a regional office in Houston, Texas.
The firm specializes in early-stage investments in healthcare services and digital health companies across North America.
Since its inception, Altitude Ventures has made 30 investments, with 11 companies currently in its portfolio and 12 successful exits.
The firm focuses on investing in startups that improve healthcare through innovative services and technologies, focusing on those with experienced management teams and scalable business models. They usually make their investment through screening tests or accelerator/incubator programs.
Martin Ventures
- Website: martinventures.com
- Focused Sectors: Healthcare and Technology.
- Funding Stages: Venture Capital and Growth Equity.
- Notable Investments: Livara and Change Healthcare
- Total Investments: 50+
Martin Ventures, founded in 2009 by Charles N. Martin Jr., is a Nashville-based venture capital firm. They invest in healthcare technology-enabled services and SaaS-based businesses.
Martin Ventures invests in early-stage businesses that have a strong idea base and well-experienced founders with market knowledge.
For growth-stage companies, the firm seeks those with at least $3 million in annual recurring revenue and a 50% year-over-year growth rate. Their primary interest lies in healthcare technology-enabled services and SaaS-based businesses that do not require FDA or regulatory approval.
The average check size of Martin Ventures is between $2M and $4M.
Gen Cap America
- Website: Gen Cap America
- Focused Sectors: Diverse industries, including manufacturing, distribution, and business services.
- Funding Stages: Acquisitions and Recapitalizations.
- Notable Investments: : Techlight and Lab Products
- Total Investments: : 66
Gen Cap America, founded in 1988, is a private investment firm headquartered in Nashville, Tennessee.
The firm specializes in acquisitions and recapitalizations of middle-market and lower-middle-market companies.
Since its inception, Gen Cap America has made 66 investments, with 17 active portfolio companies and 47 successful exits.
The firm's investment criteria focus on acquiring companies with strong market positions in niche markets. They prefer businesses with stable cash flows, experienced management teams, and growth opportunities.
The investment range of Gen Cap America can range up to several million dollars.
Wrap-Up:
Summing it all up, the most important aspect for securing a funding paycheck is research.
For instance, Gen Cap America is an experienced VC firm with huge investment ranges. But for a startup? The founder won’t be able to schedule a meeting, let alone get funding.
Likewise, it’s important to research your VC firm’s:
- Investment ranges:
- Preferred industry:
- Portfolio companies:
- On-board members:
Good luck!
