Armed with federal funding, venture capitalists in Louisiana are competing to invest in startups.

LSU astrophysicist Manos Chatsopoulos just wanted a place to park his car.

Ten years ago, as a postdoctoral researcher in Chicago, he walked around his neighborhood looking for a location, only to end up walking several blocks home in the freezing cold.

This problem sparked an idea: In 2020, Chatzopoulos, who was working as a professor at LSU, worked with LSU computer science students and the university to develop ParkZen, an app that uses crowdsourced data to help drivers find open parking spaces.







Idea and innovation logo

That same year, New Orleans resident Ariel Brown faced a problem of her own: Her chronic eczema was causing painful, itchy flare-ups, especially during Louisiana’s hot summers. Out of inspiration, or maybe desperation, she mixed probiotic powder with essential oils to create a homemade salve.

Four years later, the hair and skin care line that emerged from that experiment, Bea’s Bayou, is sold online and recently signed a deal with one of the country’s largest multicultural beauty product distributors.

The two companies are in very different industries and at very different stages of development, but they have one thing in common: They both benefited from a federally funded state program designed to provide capital to Louisiana entrepreneurs.

Seven investment funds, both nonprofit and for-profit, are participating in the Louisiana Small Business Credit Initiative, a U.S. Department of Treasury assistance program authorized by the 2021 American Rescue Plan Act.

The program got off to a slow start getting up and running, but investors and entrepreneurs say money is starting to flow, and the state agency in charge, the Louisiana Economic Development Authority, said it has met the criteria to open up a second round of funding.

LED has provided about $90 million in equity investments in the startups and the remaining $23 million in loans, a cash infusion that the program’s creators hope will attract more investment as they build successful businesses.

Offers that don’t last long

Rob Lalca, a Tulane University business professor and executive director of the Albert Lepage Center for Entrepreneurship and Innovation, said the program, called SSBCI 2.0, a reboot of a Barack Obama-era initiative, could be transformative for Louisiana, which has lagged behind the “big three” venture capital centers on the U.S. East and West coasts.

According to PitchBook, a private capital markets database, California attracted $40 billion in venture capital deals in the first two quarters of 2024. Louisiana attracted $40 million in the same period, about 0.1% of California’s total. For reference, Louisiana received more venture capital investment than Mississippi and Arkansas and slightly less than Alabama during the same period.

“This measure won’t make a huge difference in Boston, New York or Silicon Valley,” Lalca said, “where we’ve seen growing venture companies routinely raise hundreds of millions of dollars across numerous investment rounds. But here in Louisiana, it could have a major impact.”







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Rob Lalca speaks at Tulane University’s Albert Lepage Center for Innovation and Entrepreneurship Awards Ceremony at the Audubon Tea Room in New Orleans, Louisiana, Thursday, April 20, 2017. (Photo by Cheryl Gerber/Courtesy of TU)




But there’s a catch: The offer won’t last forever. In fact, states must spend each of the three tranches of federal funding within three years of receiving it before they can access the next. That means the race is on for investors to find entrepreneurs worth taking a chance on.

A slow start, but progress

Federal officials approved funding for Louisiana in late 2022, but a year later, a U.S. Treasury Department report showed Louisiana was distributing the money more slowly than other states.

More than a dozen funds initially planned to join the effort, but about half dropped out: Some couldn’t raise enough matching capital, others were intimidated by the bureaucracy, and, as LED’s chief innovation officer Josh Flaig puts it, “some are waiting for states to make changes to their programs to better accommodate them.”

But now, almost two years after the launch of SSBCI 2.0, seven funds have finally made investments.

Participants include New Orleans-area-based Boot64 Ventures, Idea Village Momentum Fund, Ochsner Ventures, Tulane Ventures, New Orleans Startup Fund and Propeller, as well as Baton Rouge-based Innovation Catalyst.

Last summer, Boot64 Ventures wrote its first check using SSBCI 2.0. The beneficiary of that $100,000 cash infusion was Ingest, a New Orleans-based company that develops software to help restaurateurs run their businesses. Since then, the new fund, run by John Roberts and Michal Adler, has invested a total of $1.5 million in 10 companies.

Roberts said five more checks are expected in the coming days, totaling $900,000.

“This money will help generate more ideas,” he said. “Maybe a 32-year-old guy who thought fundraising was impossible is now ready to take the plunge. Universities and entrepreneurship programs are nurturing great startups.”

All participating funds have made at least one investment to date, injecting more than $3 million into the ecosystem. New Orleans Startup Fund and Innovation Catalyst, nonprofits that have been investing for more than a decade, each raised more than $500,000. Tulane University and Ochsner College wrote their first checks to Nest Health, a prominent healthcare company founded by former New York Health Commissioner Rebecca Gee.

The investment is expected to top $4 million in the coming weeks as multiple funds close more deals. And new participants are emerging: The New Orleans Bio-Innovation Center, which has been running its own startup fund since 2017, is nearing the end of its application and approval process. LED’s Freig said it hopes to sign with Lafayette’s Opportunity Machine and Shreveport’s BRF by the end of the year.

What’s the big idea?

SSBCI 2.0’s investors are all betting on companies offering new products or solutions. For example, Baton Rouge’s ParkZen has received $35,000 in funding from Innovation Catalyst to date. From all sources, the startup has raised $400,000 with more investments coming soon. Meanwhile, New Orleans’ Bea’s Bayou has made $350,000 in sales since its inception and received a $50,000 check from the New Orleans Startup Fund earlier this year.

Other beneficiaries of the program include Glass Half Full, a recycling company building a three-acre facility in St. Bernard Parish; Axosim, a biotech startup working to speed up drug development; Helios, a company that designs mobile solar-powered generators; and Officer Reports, which develops software aimed at making the security industry more efficient.

Early-stage companies are risky ventures, and Louisiana’s startup scene has seen sporadic growth for decades, but local investors are hoping an upcoming cash infusion will help the state build momentum beyond 2021, which should be a stellar year for venture-backed companies in the state.

In January of that year, Shutterstock acquired New Orleans-based 3D model marketplace Turbosquid for $75 million. Eight months later, Procore Technologies announced it would acquire New Orleans-based Levelset, an online platform for construction lien management, for $500 million. And at the end of the year, Swedish company Cint acquired New Orleans research technology company Lucid for $1.1 billion. The deal made Lucid New Orleans’ first “unicorn,” a technology term for a company valued at more than $1 billion.

Tulane’s Larca hopes the new investment round will help kick-start the next generation of startups in the city and state. Some see Parkzen as a prime example of that fast-growing generation. The company, which is doubling its five-person team, now has 13 clients using its app, including multiple universities. Late last year, the Virginia Department of Transportation signed a $2 million, seven-year contract to cover 59 parking lots.







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Professor Manos Chatzopoulos poses for a photo in his office at Louisiana State University on Friday, Sept. 6, 2024.




Chatzopoulos believes that improving one of life’s biggest pain points will pay off in the future.

“Just like Waze is your number one source for traffic information, we want to be your primary source for parking availability information,” he said. “You should spend less time looking for a parking space and more time enjoying it once you’ve parked.”

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