Louisiana Launches $50M Venture Fund to Boost Homegrown Tech and Innovation

Josh Allen Fleig, the chief innovation officer at Louisiana’s economic development agency, isn’t afraid of a dad joke.

At a pre-Super Bowl speech last Thursday in New Orleans, Fleig said that, since the Buffalo Bills and their star quarterback didn’t make it to the NFL’s championship game, that made him the best “Josh Allen” in town. At another point, he drew laughs from the roughly 400-person crowd with a well-timed “Gulf of America” reference.

Both comments were characteristic of Fleig, who is known for bringing a light touch to his role as a promoter of innovation investment in a state that historically has struggled to keep up with the rest of the country in efforts to grow and attract cutting-edge companies.

Fleig’s mission last Thursday was to unveil Louisiana Economic Development’s newest strategies to turn things around. They include a $50 million venture capital fund and a new division focused on boosting homegrown tech companies rather than recruiting new ones from out of state.

Managing all this is a big job, but it’s one Fleig has been preparing for since he graduated from LSU more than two decades ago and began a career in education, technology and economic development, including a decadelong first stint at LED.

Now, after spending the last 12 years promoting Louisiana as a place to do business, he is stepping into a more prominent role, empowered by LED Secretary Susan Bourgeois and Gov. Jeff Landry to put his ideas about the state's innovation economy into practice. He's got money to spend and a team to help him spend it. And, like the NFL quarterback with a similar name, he says he is ready to call the plays.

“We’ve got to capture our share of the next industrial revolution,” Fleig said.

New name, new office, new mission

Fleig leads a roughly 40-person team dedicated to launching more high-growth, tech-enabled startups in Louisiana. Later this year, the group will be moving out of LED’s main office in Baton Rouge into a dedicated space near the State Capitol.

The new division is called Louisiana Innovation, or “LA.IO,” for short. It is launching the $50 million Louisiana Growth Fund and the Louisiana Institute for Artificial Intelligence, which Fleig hopes will coordinate academic, public and corporate research.

The new division and programs are designed to demonstrate LED’s commitment to promoting homegrown tech companies. Fleig will lead the efforts, making him, in a sense, the state’s “innovation czar.”

“Josh makes a compelling argument that we’re not going to be successful just by attracting corporate headquarters here but by growing our own,” Bourgeois said in an interview Wednesday.

In addition to overseeing the new Growth Fund and helping launch the AI Institute, the new division will absorb several existing LED departments, including LED Corp., which oversees loan and equity programs; the small business services team; the tech transfer office; and Louisiana Entertainment, which funds homegrown content creators.

LA.IO is part of Landry’s bigger economic growth agenda.

Last year’s overhaul of LED put Bourgeois in charge of the nearly 90-year-old organization and changed its operating structure. Landry created a private-sector board to advise the state on economic development policies. Separately, he signed a package of corporate and personal income tax cuts designed to make the state more "business friendly."

Money for promising companies

Fleig’s responsibility for the $50 million Louisiana Growth Fund could, in a sense, makes him the state’s largest venture capitalist. 

He designed the program to solve two problems: getting available federal dollars to the state’s entrepreneurs more quickly and addressing a gap in funding for promising companies that need bigger checks — between $1 million and $5 million — to grow.

Fleig’s team carved out $50 million from the $113 million available to the state through the State Small Business Credit Initiative, a U.S. Treasury-backed program authorized by the Biden administration's American Rescue Plan Act.

That program has been active since 2022, but the state has committed only about $25 million so far to the seven private funds participating in the program and making bets on early-stage entrepreneurs.

Fleig said his fund's investments will target companies that have begun to prove the viability of their business plan and have already received private capital. The investments, which require matching funds, are designed to be a catalyst, not a permanent solution.

“We hope this proves to individual investors, institutions and banks in the market that it pays dividends to invest in growth-stage startups,” Fleig said.

The state will outsource decision making to an outside fund manager, he said. LED has received proposals for the work and hopes to make a selection by the end of the month.

“All of the management, all of the due diligence and investment decisions will come from private individuals and organizations managing this fund,” Fleig said.

'Tinkerer with tech'

Fleig grew up in Memphis, Tennessee, until the end of eighth grade. Then he moved with his family to Lafayette, where he entered Lafayette High School as a freshman.

He graduated from LSU with an art history degree in 2003. He'd already taken a teaching job at St. Joseph’s Academy, an all-girls Catholic school in Baton Rouge, where he remained until 2006.

“My intersection with tech began there,” he said. “St. Joe’s was the first one-to-one laptop school in the state, and I happened to be a tinkerer with tech growing up, so ‘in the land of the blind, the man with one eye is king.’”

After helping build the school’s multimedia program, he decided to go back to school to earn a master’s degree in interactive design from New York University.

That led to a job at NBCUniversal, where he helped create online trivia games for tennis fans and interactive content for reality TV shows. He jumped to one of the media company’s software vendors until it was sold in 2012. Then he and his wife, a fellow LSU grad, made the move back to Louisiana.

“I was tired of working nights and weekends for content I didn’t really care about,” he said. “It’s hard to give your blood, sweat and tears so people can vote players off islands on a TV show.”

He started as a consultant for LED and then went full time in 2012, focusing on recruiting out-of-town tech companies to the state, using tax credits as bait. He was part of a team that helped create Louisiana offices for the video game companies Voltage Software, InExile, Keywords Studios and Electronic Arts.

“We knocked on every one of their doors,” he said. “I love that we were able to build a cluster.”

Fleig also helped design and launch the Entertainment Development Fund, which was supported by a fee charged to movie studios to access the state’s film tax credit program. The fund is intended to support local creatives.

Fleig’s first stint at LED lasted a decade. Then, in 2022, he took on a vice president role at Greater New Orleans Inc., the region's economic development agency. He wanted the chance to work with his “friend and mentor” Michael Hecht, the GNO Inc. CEO who recently led the state’s preparations for Super Bowl LIX.

Last year, Fleig returned to LED, which means a lot of commuting from New Orleans, where he lives with his wife and two daughters.

He drives his Tesla to and from Baton Rouge several times a week. Or, rather, he activates the car's autopilot feature and lets it drive him. On the road, he takes calls, “grinds through” Audible books and endures the morning traffic in the state capital.

Big check from Fender Guitars

The Louisiana Growth Fund won’t be the state’s first foray into direct investment.

Gov. Mike Foster’s economic development team oversaw similar programs in the late 1990s and early 2000s.

One of them paid off big.

The state was an early investor in PreSonus, a Baton Rouge-based audio electronics and software company founded in 1995. The agency invested $101,000 in PreSonus, according to state records. Then, in 2021, Fender Musical Instruments bought the company for an undisclosed amount.

That year, LED received a wire transfer for about $5.5 million.

“This check shows up and it says Fender Guitar Company,” Fleig said. “It took us a little while to figure out what it was for.”

Fleig said the organization will “pump those funds back into our mission, which is providing capital, coaching and connections for startups.”

More important, the story illustrates the power of investing locally.

“Landing out-of-state job creators is important but it’s only half of the equation,” Fleig said. “We have to grow stuff, too.”