For Immediate Release: September 1, 2004
For more information, contact:
Stephen Loy (LTP), 225.218.1100
Cell 225.205.4106
stephen@latechpark.com

New $2.3 Million Fund Created For Louisianas Emerging Companies
BATON ROUGE, La. - A new $2.3 million investment fund stands ready to do what no other fund has done before: invest solely in Louisianas emerging technology companies. The Louisiana Technology Fund is a three-year effort from the states four research parks and Louisianas Certified Capital Companies (CAPCOs) and is designed exclusively for investing in early-stage, Louisiana technology companies.

Spearheaded for the past two years by Louisiana Technology Park President Eddie Ashworth and Enhanced Capital Partners President Michael Korengold, a fund of this type has never been tried before, but is desperately needed for Louisianas future economic growth, Korengold said.

"These funds are important because early-stage funding often comes at a critical time for young companies. It comes at a time when they are at a fork in the road. One direction leads to growth and a continuation of their business plan, the other is where they go out of business," Korengold said.

"This fund couldnt have happened if it werent for the tireless effort put in by the CAPCOs. This is Louisianas first true early stage fund. That is exciting and it opens unlimited economic possibilities. We are now poised to invest in our companies like so many other states do and this fund will create significant economical gains," Ashworth said.

"The fund will help the states economic development efforts. We are trying to compete with other states that have funds like this and to be honest, its hard. For our state to continue growing weve got to help develop new and emerging companies," said Michael J. Olivier, Secretary of Louisiana Economic Development. "This type of investment fund is critical for a state to grow and nurture these new companies."

"These funds provide win-win-win situations…the companies get the early stage funding they need to grow; the state reaps benefits from the jobs created; and the investors naturally get a return on their investment. Ninety-four percent of businesses are considered small businesses. Recruiting a new large company to Louisiana is great, but it doesnt happen very often. These smaller companies really are the "bread and butter" of a states economy," Olivier said. This state-wide fund is controlled by the states four research parks. The fund will invest in companies engaged in or intending to engage in technology-based products or services in information technology, communications, medical, biomedical, advanced materials, food, environmental or micro-manufacturing technologies. The research parks included are the Louisiana Technology Park in Baton Rouge, University of New Orleans Research and Technology Park, University Research Park in Lafayette and InterTech Science Park in Shreveport.

The fund will be initially capitalized at $2,371,000 and is funded by Advantage Capital Partners, Enhanced Capital and Whitecap Louisiana Growth Fund.

"This collaboration with the four incubators provides an opportunity to invest in very early stage companies that have high potential," said Michael Johnson, a principal with Advantage Capital in New Orleans. "As a firm that has invested in Louisiana businesses since 1992, we see the Louisiana Technology Fund as a logical complement to our longstanding efforts supporting entrepreneurs in the state."

Advantage Capital Partners is a private equity and venture capital firm focused on promising companies and other investments supporting state and local economic development. Founded in New Orleans with offices in St. Louis, Tampa, New York and other cities, Advantage has raised more than $600 million in institutional private equity since 1992 and has invested in companies located in states and regions underserved by venture capital investment. "When I travel the state and look around, I see so many good things that this fund could be used for. Its going to be difficult choosing among good investments. A few years ago, that might not have been the case, but today Louisiana is really starting to churn out high quality, innovative companies," Korengold said.

Enhanced Capital Partners is a national investment firm with offices in New Orleans, New York, Denver and Birmingham, Ala. Enhanced Capital specializes in state-specific investments in small and emerging companies with its private investment funds. Enhanced Capital seeks to achieve capital appreciation while adhering to a mandate tailored for a local investment approach.

The creation of this fund is following a trend in Louisiana that might at first go unnoticed. "We are making positive economic development progress in every part of this state. But the bigger story might be that our institutional funding is growing and we are starting to invest in ourselves. We are becoming more confident in ourselves," Ashworth said. Part of the technology excitement in the state stems from the wet-lab incubator project.

The state has committed to build three state-of-the-art wet lab incubators in Baton Rouge, New Orleans and Shreveport. The Baton Rouge facility, to be located at LSU, recently broke ground.

"Louisiana has been missing something like this and it has been sorely needed. I think every part of our community will benefit from this. Our educational community, research and of course our citizens will all be stronger because of this. From Shreveport to Lafayette to New Orleans and Baton Rouge, every part of the state will benefit," LSU System President William Jenkins said.

"This will certainly help with technology transfer at our universities. This will encourage a better seamless method for us to take what we do at our fine research facilities and bring them into the private sector," Jenkins said.

The LSU System Research and Technology Foundation recently announced a $10 million commitment from the Teachers Retirement System of Louisiana to their investment fund. That brings commitments to the LSU fund to more than $15 million, foundation CEO Paula T. Jacobi said.

"The commitment of Teachers Retirement System to invest in Louisiana Fund 1 is a commitment to this states future. They demand a lot from their investments so were proud of their confidence in the potential of this fund; after all they are providing sometimes the only source of money for our retired educators. We dont take their commitment lightly, but we too think that we are a smart investment," Jacobi said.

This new economic trend is also bringing seasoned economic development personnel into the mix. Don Powers recently resigned his position of 20 years at the Baton Rouge Chamber of Commerce to lead New York-based Spire Capital Groups efforts to create an investment fund devoted to seed and early-stage investments in Louisiana-based technology and bio-technology companies. Spire has opened an office in Baton Rouge in the Louisiana Technology Park. "Spire Capital is looking at many different projects here in the state. Ive always known that exciting things were happening. I think nationally our image is changing. These things dont happen over night, but they snowball and right now our snowball is growing on a weekly basis," Powers said.

Ashworth also noted that "potential investment companies are now starting to see Louisiana as an attractive hunting ground for investment ideas." NewTek Capital, a New York-based investment company that is part of Wilshire Capital, has raised million of dollars under Louisianas CAPCO program. NewTek recently opened an office at the Louisiana Technology Park to search out investments in the state. NewTek is currently funding one company located in the Tech Park, NewTek IT Services, and has announced plans to add a second division to that company that will result in a substantial increase in the number of employees located there.

Like NewTek, New Jersey-based Anthrogenesis found Baton Rouge receptive to the companys plans to grow their stem cell business. In 2003 the company signed an agreement with the Louisiana Technology Park to open its second stem cell repository in the United States. Anthrogenesis had a proprietary method of extracting large quantities of stem cells from the placentas following live, healthy births. But before Anthrogenesis completed its laboratory at the Tech Park, Celgene purchased the company for a reported $70 million. Celgenes facility at the Tech Park now employs more than 15 people with most employees residents of and educated in Louisiana.

Anthrogensis former CEO John Haines spent a great deal of time in Louisiana learning about the bio-technology resources in Louisiana. He became convinced that there was a large, untapped reservoir of technology that needed capital to flourish. After completing Anthrogenesis merger with Celgene, Haines partnered with Spire Capital to create a fund that would spot potential investment opportunities and fund them.

"Louisiana has a different feel about it than other areas of the country and I dont just mean the food and culture. When I visit here, everyone from the other local business people to the mayor and Congressman Richard Baker, they all welcome us and bend over backwards to help. They help with the smallest to the largest of issues and that really helps cement the deals," Haines said.

Louisianas Department of Economic Development has been a strong supporter of these efforts to enlarge the pool of investment capital in the state. Mike Williams, the director of the Louisiana Economic Development Corporation has committed millions of dollars of LEDC funds to various investment funds.

LEDCs support generally requires the investment company to raise $2 for every $1 contributed by LEDC, providing a powerful incentive for the funds to raise capital from other sources inside and outside Louisiana.

"Just look around the state. Its easy to see why these companies are more than happy to bring their money here. The Pennington Biomedical Research facility in Baton Rouge is the leading nutritional science research center in the country and is rapidly expanding its intellectual property commercialization efforts. The state is developing three new wet lab incubators in Shreveport, Baton Rouge and New Orleans. Lafayette is building an exciting, state-of-the-art visualization center, and the state has four strong and growing research parks. I could quote you stats from think tanks and research firms that say the same thing, but seeing all of this coming together and working, well thats just even better," Ashworth said.


ARTWORK/PHOTOS
Headshots of: Eddie Ashworth
Dr. William Jenkins
Renderings of Louisiana Emerging Technologies Center
Interior and exterior shots of Louisiana Tech Park
For more information, contact:
Stephen Loy (LTP), 225.218.1100
Cell 225.205.4106
stephen@latechpark.com