Blame it on RIO
Terry Jones was selected from a pool of about 100 applicants to head an as-yet unnamed regional innovation organization for the Capital Region.
Innovation means different things in different contexts. In this case, innovation means fostering collaboration, improving access to capital, helping sell the region to outside companies and investors, and serving as an all-around evangelist for entrepreneurship. Jones says he’s a perfect fit for the job, in part because he has spent his career helping entrepreneurs realize their dreams.
“What the RIO job entails is kind of what I’ve been doing on a much larger scale,” he says. “It’s just taking it to a whole different level.”
Jones is the former director of underwriting at Source Capital, and he has worked for Plaquemine Bank & Trust, First National Bankers Bank and Bank One before founding Dean Capital in 1998. He’s had a hand in kick-starting businesses in various sectors, including Mezzo Technologies, which produces heat exchangers used by Andretti Green Racing and Raising Cane’s Chicken Fingers.
Dean Capital still has ownership interests in several businesses, Jones says, but it will otherwise cease operations. He has reached the end of the fund he was managing—all the dollars are invested—and he had been advising companies and helping them raise debt and equity capital before taking the RIO position.
“We’ve just been through times that tested everybody’s mettle,” he says. “Mine included.”
The Research Park Corporation, which runs the Louisiana Technology Park on Florida Boulevard, is providing $250,000 a year for the RIO over the next five years. The park is a quasi-public entity in that it is partly subsidized by the local hotel-motel tax.
The Baton Rouge Area Chamber, which has spearheaded the RIO project, refuses to say how much Jones will be paid, and Jones won’t say if the job represents a step up or down in pay. In a report released last year, BRAC said the salary would range from $150,000 to $200,000. Jones says he does not have a long-term contract, so presumably he serves at the pleasure of the Research Park board.
One of the RIO’s jobs supposedly is getting the region’s various assets, including private companies, universities, Pennington Biomedical Research Center and business incubators, to work better together. BRAC President/CEO Adam Knapp says that one of those incubators is paying Jones’ salary won’t affect his ability to be an honest broker.
LSU, Southern University and Louisiana Economic Development have all been invested in the project from the beginning, and Knapp says the incubator heads had a chance to interview the finalists before Jones was selected.
“We feel good about the fact that there is a sense of partnership and a unity among the organizations,” Knapp says.
In any event, the Tech Park is only providing the seed money, Knapp says. In a sense, Jones will be required to be an entrepreneur himself, taking the startup capital and building a broader funding base.
A shortage or an equilibrium?
Jones calls money the oxygen of entrepreneurship, and he adds that addressing the funding shortage is vital. This region has active angel investors, he says, and the RIO can help them “harness their collective power.” That could happen with the formation of angel funds or by bringing them together with entrepreneurs. SeNSE, the society of entrepreneurs that Jones helped found less than two years ago, has been attracting angels to its meetings, he says.
Not everyone agrees a money shortage is the real problem, however. Attorney Richard Matheny of Phelps Dunbar, whose practice includes business and finance, says he tried to organize an angel fund about 20 years ago but couldn’t find enough interested investors. This area has individual angels, he says, though many of them prefer real estate over startup companies.
Nonetheless, he says it’s his experience that most of the really good ideas, backed by people who have good business plans, seem to get funded. So does the limited amount of early stage capital flowing here represent a shortage or an equilibrium? Matheny can’t say for sure.
“If you talk to people who are actually in the [venture capital] business, the complaint you hear is there’s insufficient deal flow,” he says. “The entrepreneurs say there’s insufficient capital.”
“Everybody’s focused on, ‘We don’t have money here to support it,’ but what we don’t really have is deal flow yet,” says Kevin Langley, CEO of Ellis Construction and chairman-elect of the international Entrepreneurs’ Organization. “The money will follow the deal flow.”
Baton Rouge has a culture of entrepreneurship, Langley says, though the broader community doesn’t always support the entrepreneurs. He says if we nurture entrepreneurs—helping them create viable business plans, for example—they’ll have a better shot at raising money.
“It’s not the education system, and it’s not the government,” Langley says. “It’s really how it all fits together that is the secret sauce of creating economic opportunities in regions. That’s what Austin did well. It all comes together in a different way, but it’s everybody working together to make sure that it happens.”
On that point, Langley and Jones seem to agree. The Capital Region has its share of assets, and it has people willing to take the risks necessary to create jobs. What’s needed, perhaps, is better connections between the two, helping promote what the men refer to as the ecosystem of entrepreneurship.
“It’s a tremendous opportunity,” Jones says. “There is a lot that has to be done.”
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