Lagniappe for Entrepreneurs

Lagniappe Investment Process

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Initiating Discussion

Lagniappe is a Member led investment group. Lagniappe pools 'Member's capital to make strategic investments in high-growth local and regional start-up companies. All investment decisions are made collectively by the group following a structured vetting and due diligence process. Entrepreneurs interested in funding may submit a preliminary application on-line, request nomination by a Member, or contact the group administrator. Initial inquiries are reviewed to determine if the company meets the groups's basic eligibility criteria and high level investment objectives. During this initial vetting, the entrepreneur may be asked to meet with a representative of the group, or provide additional information. Particular attention is given during this step to determine that the company is at the right stage to seek investment from Lagniappe and that there is a potential match between what the amount and type of capital that the company is seeking and what Lagniappe is equiped to provide. Companies that pass through this initial screening will enter the groups' 'qualified applicant pool.'

Pitch

The full group generally hears one 'pitch' per month at regularly scheduled monthly meetings. One entrepreneur/company will be selected each month to deliver an in person 'introductory' pitch to the group. This pitch is typically about 10 minutes in length and is expected to give the Members present (without much background on the business) a good idea of what the business does, the market it is entering, who is involved, how the business has validated its customer segment, business economics, what funds would be used for, exit strategy, and if applicable, deal terms. Members will be asked to vote on the pitch following this presentation and it is important that they have enough information to form an educated opinion. The ten minute pitch is followed by 10-20 minutes of Member driven questions and answers that can be used to dive deeper on topics of interest to the Members. Following each pitch, the Members are asked to provide 5 minutes of feedback on the pitch and the business to the entrepreneur. Information and additional resources on pitching and preparing for investment can be found below.

Due Diligence

If members express sufficient interest in a pitch then the group will initiate due diligence. This triggers a series of conversations in which a smaller team of members seeks to better understand the business, the investment opportunity and to substantiate the claims made in the pitch. Companies will be asked to provide additional documentation during this period as well as company, industry, and customer references. Upon the completion of due diligence, a report is brought back for discussion to the full group and another vote is taken, generally at the next or a subsequent meeting.

Offer to Invest

Pending a positive outcome on this second vote, the group will make an offer to invest. The offer to invest will be summarized in a term sheet. If Lagniappe is the deal lead, our proposed terms are generally derived from the Gust Series Seed set of standardized investment documents. This cuts legal costs while providing a standard set of expectations to entrepreneurs. If Lagniappe is not deal lead, than investment terms proposed by another third party investor will be considered as part of the due diligence process. After the terms are mutually agreed upon, then closing documents would be drawn up, generally by outside counsel and the deal would move towards closing and subsequently funding.

Timing

The process above, describes a 'typical' deal. However, deviation from this process can and will occur based on the specifics of the underlying situation. Lagniappe strives to work as expediently, effeciently and decisively as possible, however this is a structured, community driven process that can be expected to take 45 to 90 days in a 'typical,' best-case, deal and longer for atypical situations.

Deal Size

Members join Lagniappe to build a diversified portfolio of early stage investments. As such, we must limit the amount of capital, relative to the total pool available invested in any one venture. This means that Lagniappe is generally not going to be the Entrepreneur's only source of funding. We will consider serving as a deal lead on a selective, case by case, basis, however, we generally prefer to participate in deals where there are other active investors at the table.

To help build portfolio diversification, the group also invests through a consortium of local angels: NO/LA Angel Network (NO/LAAN) Those seeking larger amounts of capital should consider applying directly to NO/LA Angel Network. Lagniappe will invest through the network, however Lagniappe will not consider a deal, independently, that is also simultaneously applying to NO/LAAN.

We are looking for exceptional entrepreneurs, a compelling vision, and a great company with traction that can't be ignored. We want to hear from you.