The Research Park Corp. voted Monday to give a $1.5 million grant to a new program aimed at making investments in high-potential startup tech businesses across Louisiana.
The Catalyst Fund plans on making three or four grants a year to companies in fields such as social media, cloud computing, big data and mobile services, said Jeanne Bayless, CEO of Innovation Catalyst.
Those fields were selected for investment because they are “capital efficient,” Bayless said. The grants will be between $50,000 and $250,000.
“We’ll help these companies refine their business plans and help them to find capital sources,” she said.
The grants for the Catalyst Fund will be spread out over a three-year period and are separate from the more than $1 million grant for operations the RPC will give Innovation Catalyst between now and 2016.
The money will come from the RPC’s funds, which are largely generated by a parishwide hotel/motel tax and from the return on the RPC’s investments.
The nonprofit fund will provide seed and early-stage capital. Any return on investments will be put back into the fund.
Bayless said the next step is to get state funds for Catalyst through the federal State Small Business Credit Initiative, which would match every $1 of grant money with 66 cents.
About $1 million exists in the fund, she said.
The fund will seek out businesses that have “go-to-market” models that are easy and inexpensive, address a critical point and a large market, and are run by people who can be coached and mentored.
Catalyst Fund is one of five programs Innovation Catalyst (formerly known as Step One Ventures) will launch to help Louisiana’s entrepreneurial climate. Plans are to start the ION Fund, a for-profit venture fund aimed at providing growth-stage capital, next month. Unlike traditional venture capital funds, investors will not get equity in a company; they will get a cut of the revenue.
“The good thing is our investors don’t have to wait for an exit to start getting money back, such as the company going public or getting acquired,” Bayless said. “For the company, it’s really beneficial because if they really believe in the company, they’re not giving away a lot of equity.”
In other business, the RPC approved a new five-year lease with the Bon Carré Business Center on Florida Boulevard for its Louisiana Technology Park, which serves as an incubator for fledgling companies.
The exact dollar figure isn’t known yet because it will be based on what the Consumer Price Index is for Dallas and Houston in December. Stephen Loy, acting director of the tech park, said estimates are the figure will be about $9.71 a square foot, which will put the rent at just under $365,000 a year beginning in January. The current rent is $8 a square foot, or just over $302,000 annually.
The 2013 audit of the RPC was accepted. The audit, performed by LaPorte, found no material weaknesses and no instances of noncompliance with government standards.
Board members also discussed the recent decision to hire an outside search firm to find a permanent CEO for the RPC. “Hopefully, we’ll come out with a very dynamic person,” said Terrell Brown, chairman of the commission.
Follow Timothy Boone on Twitter, @TCB_TheAdvocate.