Research Park Corp.’s board of directors approved plans Wednesday for a new program that will help startup businesses and fill in some of the gaps in the local entrepreneurial network.
The RPC board approved plans for Step One Ventures, which aims to help fledgling businesses after they exhaust their initial financial backing from “friends, family and fools,” joked Stephen Loy, executive director of the Louisiana Technology Park. Step One would provide small amounts of capital, between $50,000 and $250,000.
Step One came out of a partnership between RPC and JumpStart Inc., of Cleveland, a nationally recognized nonprofit venture development organization. Loy said many startups rely on their founder’s credit cards and backing from family and friends to get the business through the early stages.
The RPC has budgeted cash and in-kind contributions of nearly $1.8 million between 2013 and 2015 to Step One, while the Baton Rouge Area Chamber will provide $110,800 of in-kind contributions to the effort. Next month, plans for Step One will go before the Louisiana Economic Development Corp. The RPC and BRAC are asking for $1 million in matching funds. Plans are for the RPC, BRAC, JumpStart and other community supporters to raise money from other sources to have $8 million for the first three years of Step One.
A chief executive officer for the organization will be hired in early 2013. Three members have already been appointed to Step One’s board of directors: Terrell Brown, chairman of the RPC; Steve Hicks, a member of the RPC Board, and Mike Kirby, co-founder of Stonehenge Capital.
Brown said the new program will help young men and women in Baton Rouge who want to start companies. “This is a wonderful start,” he said.
Step One will work with companies based in business incubators and other locations across the Capital Region, not just Tech Park companies. The organization will look to invest in high-potential businesses, capable of reaching $15 million to $20 million in revenue within 7 years after getting funding, and those that have solid leadership teams.
Loy and Adam Knapp, BRAC president and CEO, said by helping startups grow to that point, it will be easier to attract angel investors. “That’s the size when you start to get interest from outside investors,” Knapp said.
In other business, the RPC Board approved a $75,000 grant award from the Delta Regional Authority that will be used to start an incubator for the video game industry. The RPC will have to make a 13 percent match for the grant, which comes to $9,750.
The Delta Regional Authority is a federal-state partnership that provides economic development opportunities to 252 parishes and counties in the Mississippi Delta.
Loy said the grant is a one-time award that will last for 18 months and begin in January. Plans are to bring in two to three startup video game businesses during the first year of operations. The grant funds will be used to bring in experts from California and Austin to speak to local entrepreneurs trying to break into the video game industry.
The RPC also approved a budget for 2013.
The tech park plans to spend $1.58 million during the year on operations and $405,838 on non-operational items, including money for Step One and BRAC’s Regional Innovation Organization. The budget includes a 3 percent across-the-board pay raise for RPC employees, bringing their total salaries to $358,079.
Brown was also re-elected as chairman of the organization and Edmund J. Giering IV, the general counsel for the Baton Rouge Area Foundation, was appointed to a seat on the board, replacing Cornelius Lewis.