University of Minnesota to manage $34.5M in state funds for startup investments

The Department of Employment and Economic Development (DEED) and the University of Minnesota will partner to provide more funding in the state.

DEED identified $34.5 million – $10 million of which is already on the ground – to be managed and distributed by the United States.

“We’re seeing more new businesses start up in a very volatile economy, and the state needs to get involved,” said DEED Commissioner Steve Grove. “We need to … help accelerate that growth and opportunity, because these companies are creating the next generation of jobs for Minnesota’s economy.”

Funds will be channeled through two programs – one for direct investment in startups and the second for investment in venture capital firms or venture capital firms based in Minnesota together. in the existence of the state that invests in Minnesota companies.

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Minnesota law prohibits state agencies from making direct investments or offering to contribute money to the fund. The administration is using the university’s knowledge and network to distribute the funds, which are part of the state’s $97 million initiative to support small businesses through the State Small Business Credit. Initiative.

University officials will spend weeks, or even months, reviewing applications received through the portal. After the verification process, each startup selected for funding can expect a verification size of $1 million or less. Funding checks can be larger.

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The investment targets early-stage companies focused on life sciences, agriculture and food technology, climate technology, advanced manufacturing and software.

Three years ago, when DEED created Launch Minnesota, an initiative dedicated to supporting state businesses, entrepreneurs told officials they needed more money for early stage founders and Treasury could be a solution, says Neela Mollgaard. , executive director of Launch Minnesota.

“It’s great to see this become a reality,” Mollgaard said.

This partnership will allow early-stage companies to grow, officials said.

The Minnesota-based company raised $1.23 billion in venture capital during the first nine months of 2022, according to investment tracking firm PitchBook. This figure is below the $1.24 billion Minnesota companies raised in 2019 but half of the $2.6 billion in 2021.

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While there were about 200 investment deals with venture-backed companies in Minnesota last year, most of those investment dollars went to companies that raised $25 million or more.

“These programs give us a once-in-a-lifetime opportunity to invest in a sustainable future by supporting Minnesota startups and helping them grow,” said Myron Frans, senior vice president of U about finance and work.

Startups and fund managers interested in funding from the program can apply immediately using the website z.umn.edu/venture-capital.

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