Episode 69: Securing Venture Funding for Startups in the Gulf South with Key Opinion Leader John Roberts

Do you like money? Well, in this episode, you'll gain insight into venture funding tailored to the Gulf South region and expert advice for entrepreneurs looking to succeed in this very unique region. You're listening to BIO from the Bayou, empowering biotech leaders with the tools, assets, and expertise to improve healthcare outcomes.

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Serving the entire Gulf South, but recorded in the heart of New Orleans. Welcome back to Bio from the Bayou. I'm your host, Dr. Elaine Hamm, the executive in residence at Tulane School of Medicine. And today's guest is John Roberts, a managing partner at Boot 64 Ventures. Boot 64 is an investment fund that supports Louisiana-based entrepreneurs to create jobs and improve the Louisiana economy, and is particularly engaged in partnering with small businesses founded by veterans, disadvantaged individuals, and rural residents. Welcome to the show, John.

Thank you very much.

John, before we dive into the work that you're doing right now with Boot 64 Ventures, could you share a little bit about your background as an entrepreneur and what inspired you to start Boot 64 Ventures?

So I've basically been an entrepreneur my entire life. After graduating from Tulane, I did work for a couple of corporations for about 3 years before I bought a bankrupt Shell station in the '90s, and over 20 years built that into a chain of 14 locations with 130+ employees. In 2018, I was approached about selling out to one of my suppliers, and at first I said no. And then they sweetened the deal a little bit and I said, okay, yes. But I really didn't know what I was gonna do. I was not planning on selling at that time. So I was just out there just thinking about what I might do. And a friend of mine called me and said that he had a startup in Baton Rouge called Moxie, and he needed some help in New Orleans. So I ended up in the Launchpad in the Regions Bank building.

Yeah.

On the 9th floor with like 100 other startups and really kind of fell in love with that whole startup ecosystem. system. Did that work for a little while and still involved with that company. They're doing pretty well. I'm a big proponent for entrepreneurship, basically. So it's been my entire life, and I want to do all I can to help see it continue in this community.

Well, being a Louisiana-based show, we discussed the emerging Gulf South region in biotech. Could I ask you to talk a little bit about some of the unique challenges and also the unique opportunities that we have here in the Gulf South for startups as well as early-stage ventures?

Yeah, for sure. So one of the primary things, no matter really what industry a startup might be in, is that there's a lack of lead investors looking here in this part of the country. So there's some hidden gems for sure. And so we've already invested in 12 companies on the way to about 50, and we have several more in the pipeline that we're about to invest in, but lack of lead investors. So we're a small fund. We had 2 of us plus an analyst, and we have a few venture partners, but we don't have the bandwidth to be negotiating with, you know, a dozen companies at the same time for term sheets and such. So. I think that's what's lacking, but I do believe that there are some real opportunities that are being missed by the East and West Coast because they don't take much time to look in this part of the country. So we're excited about the possibilities of what's to come with this SSBCI money coming into the, to the state.

That's great. I mean, I've, I've actually been a recipient of SSBCI money as an entrepreneur myself, and it really is hard to get that lead investor. And you have a ton of people that are like, Once you get a lead, call me, I'll write a matching check. But it's really hard to manage, as you say, the negotiation process, the term sheets.

Yeah, exactly.

All of the closing docs. It can be a challenge, but there's so many people that are wanting to put their money into companies. And so, as you said, I think it's a really unique opportunity for other VCs to come that are on the coast to come here, and, and they have a deal sort of plug and play ready to go. They just got to bring the term sheets with them.

So, yeah.

Great. For the startup founders and inventors that might be listening, what are the industry sectors Boot 64 Ventures is interested in investing in?

We are generalists, so we are open to any type of scalable startup. Boot 64 Ventures is the Louisiana boot with 64 parishes. So we are intentional about investing in startups across the state. And we, we just sent a term sheet this morning to a company out of Louisiana Tech in Ruston. So we're excited about that. It'll be our farthest north investment. But yeah, so it, The main thing is it has to be scalable. I, I explain it most easily to young entrepreneurs or otherwise, that if you wanna start a coffee shop, that could be a great business for you, but it's not like venture investible. But if you have a new way to brew coffee that no one else has and you're gonna open 500 locations, that's different. Let's talk.

Yeah. You know, I have to confess, I didn't realize that. I mean, the boot makes a lot of sense. I thought it was a play on bootstrap. So of just bootstrapping your company. I love that. Well, in addition to financial support, Boot 64 takes a little bit of a more hands-on approach in terms of helping startups. So how do you offer mentorship and what types of support do you offer your startups?

Well, the most important thing that we can do for any of the portfolio companies we have is help them raise their next round. Oh yeah. And so, so that's our primary focus. But in the meantime, in ways to enhance that, we have a long list of incubator-style services that we will assist them with. So everything from legal advice, my co-founder is actually an attorney, to people management. You know, a lot of entrepreneurs They might have a great idea and they might be super smart, but they've never managed another person. They need help with learning how to manage a team of people and stuff. So that's my kind of area of expertise. So we have lots of other referrals and advisors that we can assist 'em with.

I think it's a really big piece. And in fact, the last investment I had with one of my companies, it came with an executive coach. And I thought that was a really smart service that the VC firm that did that was incredibly helpful. I mean, I've been an entrepreneur for many, many years, and so I was like, I don't need a coach, but oh, they're invaluable. Yeah. I mean, absolutely. At, at any stage of the process. So it's always good to have that, not just a check, but a check with something else, a little lagniappe, I guess, in some ways, but of just being able to make sure that your money is gonna go far and giving that resources is really important.

No, I like that idea. I'm gonna think about that some more.

Yeah.

Because I'm sure there's coaches that will accept that role simply because if they get 5 or 6 startups, one of 'em has to hit and they have—

One of them has to hit.

A lifetime of, uh, Coaching.

Absolutely. Absolutely. Well, what advice would you give to entrepreneurs in the Gulf South who may feel maybe at a little bit of a geographic disadvantage being somewhat in the middle and the, the South? It can be hard. We were always called the flyover piece of it, and it can be expensive and sometimes not a lot of direct flights to Boston and San Diego and San Francisco. So what types of advice would you give entrepreneurs that are in this area?

Yeah, well, I mean, because of the SSBCI program, they're now a lot more funds available in this area. So first, look within, look in Louisiana, go on the LED's website, find the funds that are available and talk to them first. But the other important thing would be is if you're going to go to the West Coast or the East Coast, make sure that you're examining the type of investments that a fund makes before you start applying. Don't just apply to everybody. If you have a biotech startup, don't invest in the computer hardware.

Yeah.

I mean, application, right? It's, I mean, it's a big waste of time. Maybe even irritate them.

Yeah. Yeah, absolutely.

So you don't want to get people on your wrong side. First Boot 64 Ventures is 12 investments on the way to about 50. So we have plenty of room for more.

Well, and we've talked a little bit about this, but I don't think, I mean, our listeners may not know what this acronym of funding, the SSBCI funding is. Would you talk a little bit about that?

Sure. So, uh, SSBCI is a State Small Business Credit Initiative, which came first in like the 2012 JOBS Act or something, and now And was re-upped in version 2.0 in ARPA, or I don't know which one of the bills. It's administered through the US Treasury. Every state and other jurisdictions receive funding based on the demographic, socioeconomic status, and population of their particular jurisdiction. In Louisiana, it's LED who is the administrator for the funds that are coming to Louisiana, which is up, if they perform well, up to $113 million. I think it looks like they're on track to get the entire entire amount of money. And there are certain criteria. While the state invests that money into a fund like Boot 64, they don't take part in any of the decision-making, but they do require certain information— demographic information, socioeconomic information, and business address to make sure they're really located in Louisiana— to be submitted for review and to make sure that there's no insiders. It's a whole nother topic on the cap table.

Yeah.

But other than that, Once it smooths out pretty well right now to get something approved on a review of the information in about a week. And so basically each startup is receiving 50% of the funding from that SSBCI, which is the state's money.

Which is kind of a win-win for the entrepreneurs that receive it. But for groups that are in the state that have an investment fund, they have access to that capital as part of what they can deploy, which is, which is nice.

Yeah, right. It's half our fund. I, we, Received $5 million from the state and $5 million from private investors.

And do you have like a sweet spot in terms of your check size?

Yeah, so all the checks we've written have been from $100,000 to $250,000. So, but we will go outside of that range. In fact, we have a couple that we're negotiating with maybe for larger checks.

And you, do you have requirements of match or anything, or is it hopefully a lead?

So it depends on the deal, right? I mean, if we're gonna give 'em a term sheet, yeah, we are gonna require some other investors. We're not gonna just be the only investor, write you a check for $200,000 and say goodbye. You're gonna have to do some pitching to other investors and maybe get $400,000 or $500,000 including us to be, have a first close.

What's the future for Boot64 in terms of what you're thinking about for your next fund? I mean, just like entrepreneurs, I mean, I, I think VCs are also always looking for the next raise themselves in terms of investment funds. Are you guys looking to do more?

Absolutely. So we've, Boot64 Ventures is a firm. Boot64 Magnolia Fund 1 is just our first fund. So we're gonna continue $10 million fund here. We'll do $20 or $25 million fund 2. Hopefully start that fund by the end of 2025, maybe as early as the summer.

Well, I hope to have you back on to talk about Fund 3 and how you've been wildly successful in investing in Louisiana. But as we close, I just want to ask you, this is more for our listeners, how should people reach out if they're, if they're looking for funding and what should they prepare before they come talking to you?

Well, we're interested in talking to people even if they just have a good idea. Like sometimes before they even form an LLC because LLC is not really the best investment vehicle.

No.

And so we'll talk to 'em before they've done anything and lend 'em some advice, even if we don't end up investing. boot64.com, you can fill out an application there. You don't have to have all the information. It just puts you into our CRM system for deals. I keep my cell phone on the LED's website. I'm the only person that has that, so anybody can call me, 504-621-6058.

I love that. Well, thank you so much for talking with me, John. We'll be sure to keep an eye out for Bootch64 Ventures in the future and hopefully Fund 5, etc.

Thank you, Elaine.

Great. Thanks. So as always, we will have John's contact info, although he did just give his phone number. So you may want to rewind just 10 seconds and find that out. But we'll also have informational links posted in our show notes. Make sure you check them out to learn more. Thank you once again for joining us.

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