InvestLinc Securities and The MidSouth Fund

Empowering the Entrepreneur

By Sara Pentz

When Lee Paris talks about Jackson-based InvestLinc Securites, he speaks matter-of-factly, as well as enthusiastically, about its assets. He is not necessarily speaking to the issue of money, investing, securities and profitability, however. He is addressing the philosophical position that asserts––by creating regionally based networks of successful businesspeople who invest in regional businesses with their financial capital, business skills and their personal connections–––the accumulated effect simultaneously stimulates investment growth for the business, the people and the regional community.

Paris is the architect of InvestLinc Securities a partner firm with Illinois-based InvestLinc Group, which in the late 1990s was a growing private equity firm in need of a securities business. InvestLinc Group's tagline, "opportunity through relationships" describes the company’s mission.

“The added payoff for InvestLinc partners,” explains Carey Wallace, manager of communications for InvestLinc Group, “is that they give back to their communities by helping up-and-coming entrepreneurs, not just with financial backing, but with the wisdom of their own experiences, and with the strength of their own connections. Businesses grow, communities grow, and InvestLinc partners see a good return on their own financial investments.”

“We bring together the brightest minds and the greatest resources into this capital poor part of the country––the Mid-South,” Paris explains. “We have this tremendous asset to bring the region that includes Alabama, Mississippi, Tennessee and Louisiana. We will be moving into Georgia soon.”

Actually, this business premise was the brainchild of InvestLinc founder Troy Wiseman. A seasoned entrepreneur, he wanted to help the next generation of businesspeople achieve success. He was passionate about the deal-making process and wanted to keep a hand in business. With the financial capital he had created, he also wanted to make sound, worthy investments.

Wiseman knew he wasn’t the only successful entrepreneur in his situation. Through his own wide network of friends and contacts, he knew hundreds of successful businesspeople with the same desire to share the expertise they’d earned, and to see a good return from their financial capital. And, like a true businessman, Wiseman saw the opportunity to found a business that would serve them.

Wiseman knew from experience that the business world did not function on financial capital alone. He knew that business was generated on intellectual capital ("what you know") and social capital ("who you know"). He proposed that if a company could leverage not just financial capital, but the intellectual and social capital of a pool of hand picked, successful businesspeople––the potential for growth was enormous.

Instead of using MBA "book smarts" to vet deals, the InvestLinc network could turn to its own partners for "street smarts." He capitalized on the idea that invaluable business advice from men and women who had built successful businesses themselves and knew their regions and areas of expertise from the inside out would spawn excellence in future business deals. So he founded the company in the early 1990s.

Less than a decade later, Paris opened the Jackson office headquarters for InvestLinc Group’s Mid-South area. He saw an opportunity in the region, transmitted the vision for it throughout the national InvestLinc organization and made that vision into a reality.

With half a dozen years of success behind them, Paris and his IL partners Matt Thornton and Jack Harrington opened a new fund in the spring of 2005 called the Investing Mid-South Fund. The group had created separate equity funds, business funds and real estate funds for several years. This new fund is in its own early stages of development. “We try to make unique and profitable reinvestments,” explains Paris, “for those who put their trust in us by investing their money in real estate or a product that is a combination of real estate and business endeavors.”

Paris is gathering together 99 influential and successful business builders and seasoned executives to participate in this unique, locally based and highly participative private equity fund. They each contribute a minimum of $250,000 to help generate the Fund’s initial monies. Members receive regular cash flow distributions from the Fund’s investment in income-producing real estate, primarily or entirely through investment in affiliated real estate funds. The potential for returns from the Fund’s investments in a yet-to-be-formed affiliated Small Business Investment Company fund and direct investment in growth-oriented companies––are very attractive.

According to Paris, there are several unique components of the Mid-South Fund.

First, 60% of the funds are invested in real estate; 40% are invested in the business side of mezzanine financing. “It’s the combination of real estate and business investing that brings ready cash to the new businesses,” he adds. “Real estate investing is our security blanket that provides an immediate cash flow. The business side of this component gives us the advantage of some extraordinary returns. The unique characteristic about this method is that it is not a real estate deal or a business venture–––it’s both.”

The next component involves the unique association with others. “You are being placed in a deal with 98 other investors in your region that are wholly integrated in the business life of the region,” Paris says. “We all help find the best and most diverse deals from the perspective of ethnicity, success opportunity, business sectors, and other qualifiers. “We may hear about a lot of different deals, but we cherry pick for the best opportunities.”

Another unique characteristic about this Fund is that the company uses mezzanine financing to maximize the business investment. “That’s out sweet spot,” says Paris. With the use of mezzanine loans Paris and his partners receive shares of stock at a given price for a certain period of time and share in the future success of the business. Mezzanine lenders prefer borrowers with strong growth potential. “Mezzanine is that piece of the financing that makes or breaks the deal,” adds Paris.

The next Fund component is the glue of the company. Several times a year investors and regional partners come together for a ‘bonding’ that is exactly the purpose of the mission statement. “We roll out the Magnolia scented red carpet for them,” says this Southern gentleman. “They mix business and pleasure together. They learn about how the Fund is doing, are educated about upcoming deals, and build relationship with each other. We naturally get excited about their investments and build their relationship with each other, and they plot their own course and do their own deals. Who knows––some time in the future one of them may be involved with a start-up company that could easily link with another partner or investor in the group and create the appealing returns we hope to generate.”

InvestLinc Securities and the Mid-South Fund offer income opportunities with private investing and relationship building through personal expertise. As they say, “…while private equity historically outperforms public stocks…today’s market makes this investment class more attractive than ever…particularly in the area of local investments.” InvestLinc’s own success is based on empowering entrepreneurs to create the reality of their deal-making dreams.

InvestLinc Disclaimer: Information in this article is not an offer to sell or a solicitation of an offer to buy any securities. Offerings are made only by the confidential Private Placement Memorandum which will contain complete information about the issuer and the offering. Until it is delivered, no money or consideration is being solicited, and, if sent will not be accepted.

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