Angel Investing in the Gulf Coast Region: an Interview with Choose Taurman and Clayton White

Choose Taurman and Clayton White are members of ACA and co-founders of the South Coast Angel Fund, formed in 2010 to foster entrepreneurial endeavors throughout Louisiana and the Gulf Coast. The group recognizes the value of supporting the entrepreneurial community for the economic benefit of the entire region. Their initiatives include seminars, mentoring start-up companies and early stage capital. We recently spoke with Choose and Clayton about their outlook on angel investing and how that is being shaped for the next generation in New Orleans and the Gulf Coast.

ACA: Tell me a bit about your professional backgrounds leading up to South Coast Angel Fund.

Choose: I came to New Orleans after the army and attended Tulane University Graduate School of Business. During this time, I fell in love with venture capital but quickly realized that there weren’t going to be many VC deals in New Orleans, as they were mostly in Houston and Boston at the time. My wife and I started our own business in factory and plant automation, which we sold years later. After Katrina, Clayton and I, who had known each other for years, met up again, and we started a conversation about how we could work together.

Clayton: My background is in law. I also co-founded a business in 1985 and took it through two rounds of venture and fell in love with the process. After Katrina, Choose and I began to talk about how we could work together. We thought about starting an angel fund and were quickly introduced to the Irish Angels and Piedmont Angels. They opened their arms to us, and we had the opportunity to watch how they operated for two years. Out of that experience, we started the South Coast Angel Fund.

ACA: What made you decide to start South Coast Angel Fund?

Choose: Before Katrina, New Orleans was a city, for good or for bad, that was stuck in its ways. After Katrina, the city became a clean slate, and it gave its residents an opportunity to start again. It was good timing to ask ourselves: How can we make a difference?

Clayton: In our area of the country, the businesses were traditionally tourism and natural resources. It was not a traditional hub for high growth businesses, so people had a great misunderstanding of what angels were. We started working with some of the business groups here to educate people about angels. ACA was instrumental in helping us put education programs and resources together. As we focused on education, more and more people wanted to engage with us.

ACA: What kinds of startups were you finding that were in need of angel investment?

Clayton: Since Katrina, the whole Gulf coast ecosystem has changed. Before the hurricane, it was hard to find any startup businesses, but since Katrina, there have been major changes in our population. Now we see startups in medical technology and research, gaming and Internet technology, and fiber optics. The industries tend to vary by city, and our investments are not in any one given sector.

ACA: What is unique about the South Coast Angel Fund?

Clayton: There are 7 institutions of higher learning in this area. We’re very involved with several of them. For instance, Loyola University is a member of the South Coast Angel Fund. They hosts our meetings and allows their MBA students to represent Loyola as an investor and have a vote on group deals. It’s our way to promote entrepreneurship in our community. Students get the chance to meet entrepreneurs, sit with investors, learn what other investors are asking, and how they analyze the different opportunities. They even learn how to approach due diligence.

Choose: The idea for school involvement came out of our time with the Irish Angels. Due to their influence, we have an open door policy for graduate students who are interested in investing.

ACA: Do you have any predictions for the future of the startup ecosystem in the Gulf Coast region?

Clayton: I think people will see a lot more activity in the venture capital area. We’re seeing the pipeline of opportunities grow over time. As we get more publicity and people understand the volume of the deals that are here, they will continue to come to our region.

Choose: The demographics here have changed dramatically since Katrina, and it’s so easy to do business here. Because of the cost of living, public transportation, and the open door culture, we have created a very welcoming community for entrepreneurs and investors.

ACA: What is one piece of advice you would give to a high net-worth individual interested in becoming an angel investor and joining a group?

Choose: I would tell them to sit down with angel investors and talk about the group process with them. The biggest pushback I have seen is from individuals who are surprised that they no longer have complete control over a final say in an investment. It’s important that they make sure that the group process is a good match for their personalities and that they’re interested in being a participant, rather than the sole decision maker.