Advocate file photo by Ian McNulty - Dinner Lab held pop-up style events, like this one in Central City in New Orleans, and asked its members for detailed feedback to build a trove of dining data.

When Dinner Lab abruptly shut down in April, the news left plenty of people wondering what had happened to a one-time star of the New Orleans start-up scene.

Among the investors who lost money on the deal: Louisiana taxpayers, who gave the high-profile New Orleans firm more than $3 million in tax credits through a state economic development program aimed at helping entrepreneurs grow their companies.

Dinner Lab, which sold memberships for private dinners held in unconventional settings, expanded nationally from New Orleans and brought in some $10 million in investment capital before filing for bankruptcy last week.

The company’s meteoric rise was partly stoked by the state’s Angel Investor Tax Credit program.

The program, administered by Louisiana Economic Development, does not provide tax credits to start-ups themselves but rather to individuals who invest in Louisiana-based companies certified by the state to participate.

During the period when Dinner Lab was participating, investors got a credit valued at 35 percent of their investment to apply against their Louisiana tax obligations.

The credits are transferable, meaning that an investor also could sell the credit for cash, usually at a discount. Such credits, also used in Louisiana’s film industry, generally sell for about 85 cents on the dollar.

Brian Bordainick, co-founder and CEO of Dinner Lab, said the Angel Investor program was an important part of getting the company off the ground.

“Raising money is a tricky process, and New Orleans wasn’t a capital-rich environment for the type of company we had, so this opened things up,” Bordainick said. “I still think it’s a huge boon for the entrepreneurial community.”

Robert Travis Scott, president of the Public Affairs Research Council, a Baton Rouge-based watchdog that has studied the state’s many tax incentive programs, said the Angel Investor program is “one of the riskier” ones Louisiana offers.

That’s because other incentive programs are keyed to certain requirements for job creation or money spent by companies in the state. Often, there are “clawback” provisions allowing the state to get its money back if the company doesn’t hold up its end of the bargain. State officials confirmed that the Angel Investor program has no such provision to recoup the value of tax credits issued.

“You’re going to be taking some risks, and there will be some failures,” Scott said. “The idea is that the winners will be really big winners and hopefully make up for the failures.

“If it pays off, it’s supposed to pay off really big with lots of jobs and big successes in the state,” he added. “It’s the state basically endorsing the idea of taking risks. The assumption going in is that you’ll have some failed companies — it’s the nature of it.”

For Dinner Lab, the tax credits ramped up as the company grew nationally.

In 2013, when Dinner Lab received nearly $2 million in private investment, the state issued those investors $672,786 in tax credits. The following year, when private investment exceeded $2 million, the credits totaled $717,326. And in 2015, when private investment peaked at $5.6 million, the state issued another $1,675,885 in credits.

The economic development office reports that since the Angel Investor program started in 2011, the state has issued a total of $65 million in tax credits for 114 Angel projects.

Roughly 5 percent of that money went to Dinner Lab, suggesting it has been one of the bigger beneficiaries of the program. But state officials could not provide a breakdown of the participants Monday.

With Louisiana’s budget in perennial crisis and tax credit programs coming under new scrutiny, lawmakers have made the Angel Investor incentive less generous than it was when Dinner Lab got funded. Investors in approved companies now qualify for tax credits of up to 25.2 percent of their investment, down sharply from the former 35 percent.

Dinner Lab was launched in New Orleans in 2011 and had grown with operations in 30 cities around the country.

Its funding ran dry this spring, which proved to be a hard season for a number of other venture capital-backed culinary start-ups. SpoonRocket, an on-demand food delivery service based in Berkeley, California; Kitchensurfing, an on-demand private chef service based in New York; and Kitchit, a similar private chef service based in San Francisco, each closed earlier this year.

Last summer saw the end of Good Eggs, an online farmers market and food delivery service that had first expanded to New Orleans, where it had 30 employees.

After announcing an immediate end of its operations in April, Dinner Lab last week filed for Chapter 7 bankruptcy, and U.S. District Court has assigned a trustee to sell off the company’s assets and distribute proceeds to its creditors. Bankruptcy filings list some 284 creditors, who include suppliers and service providers in markets around the country.

After the filing, Bordainick sent a letter to contractors who were left with outstanding bills when the company shut down.

“We are aware of the payment that we owe to you and are doing everything we legally can to pay you the money owed,” his letter said in part. “Unfortunately, the company has not been in a legal or financial position to actually pay those out while we worked through this process.”

The end of Dinner Lab, however, does not spell the end of all of its projects. Brooklyn FoodWorks is a commissary kitchen that serves as an incubator for culinary entrepreneurs in New York, and Bordainick said this endeavor continues.

“There are entrepreneurs in there every day working,” he said.

Brooklyn FoodWorks was developed as a partnership among the New York City Economic Development Corp., the Brooklyn Borough President’s Office and DL Labs, a subsidiary created by Dinner Lab to build and operate it.

Housed in a former Pfizer pharmaceutical plant in Brooklyn, the 10,000-square-foot facility is designed to give start-up food businesses affordable access to kitchen space and entrepreneurial support.

DL Labs also filed for bankruptcy in late April, but under Chapter 11, a part of the bankruptcy law that is intended to allow businesses to reorganize.

“When Dinner Lab shuttered, we didn’t want to take out two companies at once,” Bordainick said.

He said the plan is to continue to develop Brooklyn FoodWorks and eventually bring DL Labs out of bankruptcy.

Follow Ian McNulty on Twitter, @IanMcNultyNOLA.