Solution: Just use SA for the install not worth the hassle hunting down the security issue. 

I'm setting up a test environment and the initial configuration of the LFDS DB fails with the following error:

System.Data.SqlClient.SqlException (0x80131904): Execution Timeout Expired.  The timeout period elapsed prior to completion of the operation or the server is not responding.
ALTER DATABASE statement failed.
Operation cancelled by user. ---> System.ComponentModel.Win32Exception (0x80004005): The wait operation timed out
   at System.Data.SqlClient.SqlConnection.OnError(SqlException exception, Boolean breakConnection, Action`1 wrapCloseInAction)
   at System.Data.SqlClient.TdsParser.ThrowExceptionAndWarning(TdsParserStateObject stateObj, Boolean callerHasConnectionLock, Boolean asyncClose)
   at System.Data.SqlClient.TdsParser.TryRun(RunBehavior runBehavior, SqlCommand cmdHandler, SqlDataReader dataStream, BulkCopySimpleResultSet bulkCopyHandler, TdsParserStateObject stateObj, Boolean& dataReady)
   at System.Data.SqlClient.SqlCommand.RunExecuteNonQueryTds(String methodName, Boolean async, Int32 timeout, Boolean asyncWrite)
   at System.Data.SqlClient.SqlCommand.InternalExecuteNonQuery(TaskCompletionSource`1 completion, String methodName, Boolean sendToPipe, Int32 timeout, Boolean& usedCache, Boolean asyncWrite, Boolean inRetry)
   at System.Data.SqlClient.SqlCommand.ExecuteNonQuery()
   at Laserfiche.LicenseManager.SqlServerSmoWrapper.CreateSchema()
   at Laserfiche.LicenseManager.LicenseManagerService.CreateLicenseDatabase(LicenseManagerServiceCallArgs _args)
   at Laserfiche.LicenseManager.LicenseManagerService.DispatchFunction(LicenseManagerServiceCall func, LicenseManagerServiceCallArgs args)
ClientConnectionId:2ecee4f4-08f3-4067-85a6-8459b40b3728
Error Number:-2,State:0,Class:11
Exception Data:
HelpLink.ProdName: Microsoft SQL Server
HelpLink.ProdVer: 16.00.1115
HelpLink.EvtSrc: MSSQLServer
HelpLink.EvtID: -2
HelpLink.BaseHelpUrl: http://go.microsoft.com/fwlink
HelpLink.LinkId: 20476

Type:
System.Data.SqlClient.SqlException

Stack Trace:
   at System.Data.SqlClient.SqlConnection.OnError(SqlException exception, Boolean breakConnection, Action`1 wrapCloseInAction)
   at System.Data.SqlClient.TdsParser.ThrowExceptionAndWarning(TdsParserStateObject stateObj, Boolean callerHasConnectionLock, Boolean asyncClose)
   at System.Data.SqlClient.TdsParser.TryRun(RunBehavior runBehavior, SqlCommand cmdHandler, SqlDataReader dataStream, BulkCopySimpleResultSet bulkCopyHandler, TdsParserStateObject stateObj, Boolean& dataReady)
   at System.Data.SqlClient.SqlCommand.RunExecuteNonQueryTds(String methodName, Boolean async, Int32 timeout, Boolean asyncWrite)
   at System.Data.SqlClient.SqlCommand.InternalExecuteNonQuery(TaskCompletionSource`1 completion, String methodName, Boolean sendToPipe, Int32 timeout, Boolean& usedCache, Boolean asyncWrite, Boolean inRetry)
   at System.Data.SqlClient.SqlCommand.ExecuteNonQuery()
   at Laserfiche.LicenseManager.SqlServerSmoWrapper.CreateSchema()
   at Laserfiche.LicenseManager.LicenseManagerService.CreateLicenseDatabase(LicenseManagerServiceCallArgs _args)
   at Laserfiche.LicenseManager.LicenseManagerService.DispatchFunction(LicenseManagerServiceCall func, LicenseManagerServiceCallArgs args)

--------------------------------

It is creating some of the tables in the DB but times out after ~30 seconds.

I have no other error in the event log, SQL or IIS logs. 

If there a config I can modify to increase the timeout?

All SQL permissions look to be set properly. It's the same error with windows and sql authentication. 

Thanks in advance!