Kandiyohi County partners with Minnesota Angel Network: EDC to connect tech entrepreneurs with resources, investors
WILLMAR -- Kandiyohi County has joined forces with a statewide initiative to bring together early-stage entrepreneurs and financial backers, a move that's expected not only to spur economic growth but also to beef up Minnesota's capacity in the technology sector.
The Kandiyohi County and City of Willmar Economic Development Commission is one of more than a dozen organizations across the state that are partnering with the nonprofit Minnesota Angel Network.
The EDC also has been named one of three intake sites in Minnesota for connecting emerging new companies with the resources of the statewide angel network. The other two sites are Fergus Falls and Owatonna.
Local officials and representatives of the Minnesota Angel Network gathered Friday morning at the MinnWest Technology Campus for the official announcement.
"What we're really here to do is celebrate," said Todd Leonard, executive director of the Minnesota Angel Network.
He said 75 companies are poised to start coming through the intake process, which will screen and select the most promising candidates and prepare them to meet with potential funders.
It's a model that provides rigorous leadership training to these entrepreneurs and gives them access to investors looking for opportunities to back a start-up company.
David Wagy, chief executive of the Minnesota Angel Network and a former Medtronic executive, said it appears to be the only program like it in the United States.
"We're a first-of-a-kind organization and process," he said.
Organizers say it's something that's needed to spur more growth in Minnesota's technology industry.
There's no shortage of opportunities, Wagy said. But sources of capital have dried up in recent years as investors, worried about the effects of the recession, have become more cautious about funding start-up companies, he said.
Many entrepreneurs also are finding it difficult to meet potential investors who can help provide them with start-up capital, he said. "The Minnesota Angel Network has been developed to support that and bring those two groups together."
Financing from angel investors generally ranges up to $5 million. It's meant to fill a gap not otherwise met by traditional sources of financing for start-up companies.
The Minnesota Angel Network is tapping into the expertise of several experienced accounting, legal and advisory firms to work with budding entrepreneurs so that by the time they reach the stage of meeting with an investor, they have a well-developed business plan and leadership training to qualify them as a good prospect.
Getting partners involved was essential to leveraging as many resources as possible, Leonard said. "Without it, we're just a name and a couple of guys trying to get something done."
It also extends the services of the Minnesota Angel Network across the entire state, he said. Along with the Kandiyohi County and City of Willmar Economic Development Commission, donor and partner organizations include the Southwest Minnesota Initiative Foundation, the Southern Minnesota Initiative Foundation, Mayo Clinic, the BioBusiness Alliance of Minnesota and LifeScience Alley.
Leonard said data will be collected and reported quarterly on measures such as how many start-up companies are being funded and how many jobs are created.
On average, about one in 10 start-ups succeed in attracting an investor, he said. "We hope to be much better than that."
Although the initiative is still fledgling, it has already drawn attention, Leonard said. "We are getting interest. ... This isn't about funding only. This is truly about long-term success."
Local officials said they expect Kandiyohi County's role in the Minnesota Angel Network to give a significant boost to the county's own efforts to build local technology-based industries.
"This approach is truly unique," said Jean Spaulding, assistant director of the EDC. "That is what really sets this apart. It's that very thoughtful, strategic assistance they offer. It ties in perfectly with everything we're doing."
She said it will also support the development of a Kandiyohi County-based group of angel investors, a project the EDC has been working on for more than a year.
"We see this as being really, really critical in taking our angel fund efforts to the next level," she said.