Katrina's Silver Lining: A Renaissance Of Startups And Angels

This post originally appeared on Forbes.com

Editor’s Note:  ACA’s annual Fall workshop, now called the Angel Insights Exchange, will be in New Orleans on November 9-10.  We picked New Orleans not only for its iconic activities and food, but because it has a growing entrepreneurial vibrance.  Here’s a taste of the city’s growth in the form of the NO/LA Angel Network.

Despite the devastation Hurricane Katrina caused 10 years ago, the huge disaster that hit New Orleans brought a silver lining. With a giant microscope on the area, young people were drawn to New Orleans and the surrounding region to help.

In the years immediately following Katrina, young people turned out in droves. They came to volunteer, to rebuild and to educate children, but then something interesting happened. Many liked the area and stayed. Their friends came too. Over time all these new NO/LA (New Orleans/ Louisiana) residents perpetuated an explosion of entrepreneurial activity—something the area desperately needed.

New Orleans now sports a thriving ecosystem of startups and innovation.  Ideas and entrepreneurs come out of universities in the New Orleans-Baton Rouge corridor and a growing set of incubators, accelerators and other programs are there to support them.

Among this new growth is the NO/LA Angel Network (NO/LAAN). Mike Eckert is the founder/chairman of NO/LAAN and an Angel Capital Association (ACA) Board member. “The availability of organized early stage capital in New Orleans pre-Katrina was very limited,” he said. “As a result, promising entrepreneurial ideas were not getting funded or entrepreneurs had to leave the area to obtain the funding they needed.” Thankfully, things have changed.

Eckert, former CEO of the Weather Channel and leader of angel investing groups in other markets, is a fairly recent transplant to New Orleans. For several years he had visited the area thanks to family, but then he moved there and saw for himself the explosion of post-Katrina entrepreneurial activity. Many people were innovating and building.  What was missing was a strong early-stage capital base.  The timing was right for the formation of a sophisticated angel investor group.  The entrepreneurs were there, accelerators and incubators were forming, and investors were ready to organize and support the entrepreneurial growth. In early 2014 many interested investors came to exploratory meetings, and then the NO/LA Angel Network (NO/LAAN) was born.

The growth of NO/LAAN in such a short period of time shows just how active the area is today; it has grown to 106 members in just 1.5 years. Most angel groups across the country have closer to 68 members, with growth occurring over a much longer period of time.

Members of NO/LAAN range from long-time locals to “new blood” who bring with them experience as angels in other parts of the nation and at other startups. NO/LAAN members have a wide range of backgrounds: executives, lawyers, doctors, family offices, and entrepreneurs. About 10 percent of its membership is women. There are a good number of young people as well.

The growth so far has been encouraging, and it seems as if the angel growth occurring in New Orleans and throughout Louisiana is just the beginning - and it is spreading fast. Pockets of interest are springing up across Louisiana, and NO/LAAN is reaching out to an impressive six other economic areas in the state to help build angel groups in these markets.

“We are in the process of building a state angel investing network,” Eckert said. “I’m thrilled. The energy down here is beyond anything I’ve seen anywhere else.”  

The support of NO/LAAN has been vital to the area’s emerging success. Members hold two meetings per month with incubators and universities, offering angel investor roundtables and office hours where investors meet with companies and entrepreneurs to provide hands-on guidance. It’s impressive the amount of assistance they are offering, and a huge boost to the entire early stage ecosystem.

The group has also made a good start in making investments.  In less than a year, NO/LAAN has made six investments including second investments for two companies, for a total of $2 million. Those numbers are on par with average numbers for angel group activity in other areas. It’s really quite remarkable.

NO/LAAN members are seeing investment opportunities from all over Louisiana.  Two thirds of the group’s deal flow comes from Louisiana and half of this is from the New Orleans metro area.  Deals range from energy, to battery technology, to bio-science, to packaging and more, thanks to new hospitals and research and development facilities in the area.

Because of this growth and opportunity, ACA has chosen New Orleans to host its November Angel Insights Exchange conference in New Orleans.  This will bring ACA members from across the US and Canada to New Orleans and provide an opportunity to experience some of NO/LA’s silver lining entrepreneurial culture while sharing new ideas for angel investing. (I’m sure angels are also looking forward to checking out NO/LA’s renowned restaurants, another part of the city’s growing business community.)

Ten years after Katrina, it’s amazing to realize how far New Orleans has come.  A lot was lost in the hurricane, but the bounce back has been impressive.  No doubt this is just the start. It will be interesting to see this renaissance continue.