Under new leadership, Innovation Catalyst to overhaul business model

Major changes are afoot at Innovation Catalyst, the Research Park Corporation’s nonprofit venture development organization.

Though the changes have been underway for months, they have been kept quiet and gone largely unnoticed outside of Baton Rouge’s small entrepreneurial ecosystem.

Among the most significant changes is a likely overhaul of the venture fund’s business model from that of a nonprofit organization reliant on foundation and government support to stay afloat to a more traditional, for-profit venture fund model that attracts private investors.

In another significant change, former CEO Louis Freeman, who was hired to head Innovation Catalyst in and the organization’s founding board of directors, chaired by Nanette Noland, resigned last August.

Both changes were prompted primarily by the fact that Innovation Catalyst essentially ran out of money. The organization, created in 2014 by the RPC, was seeded with quasi-public funds—some $2.5 million in all—that came from the RPC, foundations and federal grants.

As such, its sustainability depended on either ongoing support from government and philanthropic organizations or on making a large enough return on its investments to stay afloat.

But though some of the 16 investments it made over the last four years were relatively successful—notable among them Waitr—they didn’t generate enough return to keep the organization going. (In the case of Waitr, the return came in the form of stock, which plummeted shortly after the company went public.)

In recent months, the RPC, which took over the organization after the resignations last summer, has named a new board of directors to Innovation Catalyst, chaired by Veneeth Iyengar, assistant chief administrative officer for the city-parish, and tapped attorney Bill Ellison to replace Freeman as CEO.

Ellison’s appointment became effective Jan.1.

The organization still doesn’t have any money to invest, however, which is why Iyengar says the board is moving quickly to change the model.

“Innovation Catalyst in its first iteration was a good start but it wasn’t optimal,” he says. “But Innovation Catalyst 2.0 would function as a true for profit, which opens you up to all sorts of investors. We need to make this much more open and we want to be hyper aggressive on this.”

For his part, Freeman says he “loved” his time at Innovation Catalyst but adds, “the model as a nonprofit fund is not a very attractive charity.”

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