All the effort underway to kickstart innovation and entrepreneurial activity ((e.g., MHTA; MNCup; MOJO MN; Minnedemo/Minnebar; Minnov8; tech.mn) is clearly a reaction to the nearly terminal decline of risk taking and venture funding in Minnesota. Wherever there is a vacuum, something will fill it!
How true is the perception that Minnesota lacks funding and risk-taking venture capitalists? If you read these three things below, you’ll see that it’s highly likely perception is reality.
- Having Eric Caron (@ecaron) point out this thread to me at Hacker News which was sparked by someone submitting this tech.mn article for discussion. While commenters have usernames vs. real ones and there is a lot of anecdotal discussion in the thread, it’s a troubling read since this is how many startups feel about being here in Minnesota
- Next I fired up my iPad RSS reader in order to skim the top tech sites I read at breakfast each morning. I immediately was presented with an incredibly contrarian-to-Minnesota-VC-funding-experience in an article on the tech site GigaOM entitled, “Seed Stage Investments Jump Sharply in Q2 2010.” It begins with this: “If there were any doubts that the entrepreneurial activity is hitting new highs, then the new data from the National Venture Capital Association puts them to rest –venture capitalists invested $6.5 billion in 906 deals during the second quarter of 2010, thanks to a renewed interest in seed and early stage companies along with new found enthusiasm for clean technology-oriented startups. This is in sharp contrast to a slowdown in the new money flowing into venture funds themselves.“
- In a pretty clear sign that everyone’s perception is reality came when I popped open StarTribune.com’s business section this morning and this article leapt out at me, “Venture capital still scarce in Minnesota.” It led with this: “Venture capital investments in emerging Minnesota companies perked up a bit in the second quarter but remained on track for the weakest year in 15 years of record-keeping, according to data being released Friday.“
The passing of the Angel Tax Credit will go a long way to tap in to the seed stage momentum GigaOM reported on this morning. Read Why Now? MN Legislature Passes Bill w/Angel Investment Tax Credit and Angel-backed Startups 30-50% More Likely To Be Successful to learn more about seed stage investing in Minnesota…
…but then tell us what else needs to be done? Make your voice heard in the comments!