While the Capital Region has an estimated “couple thousand” potential angel investors, it would only take upwards of 150 total—including 10 to 20 active experts per investment deal—to forge a network. But corralling those residents together has yet to happen and, with no significant concerted effort taking place, doesn’t seem likely for 2019.
Angel investment—financial support from private individuals—took off throughout different pockets of Louisiana in recent years. Supporters say it can also take off here, but first the nine-parish region has to overcome several challenges.
It’s important to first look, per deal, at those 10 to 20 dedicated investors, who Innovation Catalyst CEO Louis Freeman calls a network’s “due diligence core.” They’re the ones who research companies in-depth, work together to create an analysis of a potential investment and advise the larger angel network on how to proceed. Each core is made up of industry experts, lawyers, financial advisors and whoever else is needed.
Cultivating that active pool of volunteer experts has proven Baton Rouge’s greatest obstacle, Freeman says, though he has an idea of where to start looking for them.
“The best angels are those who are entrepreneurs themselves, because they care and they’ve been there too,” he says. “What we need is a large group of people from varied industries that can give their professional expertise for free for the benefit of the group.”
Oftentimes, those investors don’t want to be organized, says former LSU Innovation Park Executive Director Charlie D’Agostino. Many local angels hope to remain anonymous, which they would lose as members of a public group. So they instead operate on an individualized basis, says D’Agostino, going directly to people they trust rather than relying on a peer network.
For a network to form, he thinks the Baton Rouge Area Chamber will need to lead the charge, working with some of the young entrepreneurs who attend Baton Rouge Entrepreneurship Week, pitch nights and other entrepreneur-centric events.
“The ideal time might be right now,” D’Agostino says, “because we have a lot of young people who have made a lot of money and are more tech-oriented.”