New Orleans Startup Fund
The New Orleans Startup Fund (The Startup Fund) is a non-profit 501(c)(3) evergreen venture fund, established by Greater New Orleans business and community leaders. The mission of The Startup Fund is to provide seed capital and technical assistance to early-stage firms that demonstrate significant growth potential.
The goals of The Startup Fund are as follows:
- Develop a portfolio of companies that will create jobs, wealth and opportunity
- Build and strengthen the local angel investment network
- Attract external venture capital to a region rebranded for innovation
The result will be a stronger, more diverse economy for the future of New Orleans.
A Critical Need
While the “new” New Orleans is rich in ideas and energy, it is lacking in the early-stage capital necessary to fund these ideas and harness this energy. More specifically, the angel and venture capital markets in New Orleans are young and undersized compared to other markets in the country; a recent case-in-point was a New Orleans company that raised millions from blue-chip East and West Coast equity firms, but was unable to raise any early-stage capital locally. The Startup Fund aims to correct this market deficiency by providing early-stage, “proof-of-concept” funding.
The Startup Fund model
The Startup Fund takes a two-pronged approach to solving this critical need, while keeping administrative costs below 9% of assets:
1) Financial Investment
The Startup Fund makes financial investments in early-stage companies:
• Total Funds Secured To-date: $3.9M ($1.5M private + $2.0M State + $0.4M Federal)
• Total Target Fund Size: $7.0M
• Individual Investment Size: $25,000 to $250,000 per company
• Investment Criteria 1: Portfolio companies must demonstrate ability to raise follow-on capital in an amount equal to 4-5 times The Startup Fund’s investment within three years
– Entrepreneurs must demonstrate that they have a “high-growth potential” business model, idea or existing business that is capable of attracting significant funding from private investors (i.e., angel/venture capital) within three years
– Entrepreneurs must demonstrate a clear vision to grow the business to $20-$50 million in revenue in five to seven years
• Investment Criteria 2: Company must be headquartered in GNO, Inc.’s 10 parish region
2) Technical Assistance
The Startup Fund provides concurrent technical assistance to its portfolio companies; once companies enter The Startup Fund’s portfolio they are paired with professional staff and networkpartners to receive assistance in several areas including:
• Financial Modeling & Controls
• Marketing Strategy and Support
• Operational Planning and Continuous Improvements
• Management and Governance
• Follow-on Capital Raising
How to Apply
All applications to The Startup Fund should be submitted through The New Orleans Startup Fund’s web-based application form found at http://neworleansstartupfund.org. The initial application collects basic information about the entrepreneurs, technologies involved, intended products or services, life-stage of company, intended market, current financing, current and future financial need, and other relevant data. More comprehensive plans are developed and submitted over the course of the review process.