STARTUP SCHOOL     2012
What’s MOJO• Innovation Co-operative• Working to build and promote MNs innovation ecosystem• Support to MN startups and hi...
Startup Ecosystems“Boldness of enterprise is the foremost cause of America’srapid progress, its strength and its greatness...
U.S. High Tech Economy• Total employment of 5.75 million workers• Tech employment up 115,000 workers (2%) in first half of...
Hot Spots for High Tech in U.S.   Forbes list in 5/2012 of 50 Metro area hot spots rated    based on employment growth in...
Where We Stand        In a similar study to Forbes by the         Atlantic Magazine, Minneapolis-         Saint Paul rank...
Some MN High Tech Stats 120,800 high-tech workers in 2010 (17th in US) 2,900 jobs lost between 2009 and 2010 High-tech ...
Room for Improvement in MN   Low % of regional VC $ flowing to “seed stage” or    “first round” investments (MN only exce...
What are hot spots doing well? Presence of solid tech-oriented companies Substantial employment in R&D Flexible regulat...
How to Improve High Tech in MN                    Capital Availability                    Human Capital                 ...
Capital Availability More seed funding and angel investments in the  early, mid, and growth stages of companies More acc...
MN Angel Tax Credit   Tax incentive for investors who invest in startup businesses that    are focused on high technology...
Human Capital   Keep and attract talent with emphasis on STEM    education (science, technology, engineering, and    math...
Innovative Ideas Robust corporate R&D environment Technology Transfer improvement Statewide innovation clusters More t...
Start-up Companies   It is important for start-up companies to focus on a    couple crucial areas in their start-up     ...
Compellent Started in Eden Prairie in 2002 as a  provider of enterprise storage systems  by Phil Soran Not profitable un...
Startup Panel   Matt Kyle – Circle Biologics   @matthewrkyle   Corey Thompson – Naiku          @naikuinc   Parag Shah –...
Circle Biologics, Inc.• Plymouth, MN• Regenerative Medicine• FDA marketing clearance & Issued IP• Successful fund raising
The Financing Cycle
Methods of Financing a Startup•Equity / issuing stock   •Common stock   •Preferred stock   •Convertible debt•Loans   •Cred...
Investment Community •Accredited Individual Investors (Angels) •Angel Networks •Private VC firms & Family Offices •Venture...
Other Sources of Capital•Contests/Prizes      •Specialty Finance•Govt. Grants/Loans     •Equipment loans  •SBIR / SBA     ...
Angel vs Venture Capital Investments                                                          Angel   2009                ...
Community Resources                    The               Collaborative
University of Minnesota• Training Entrepreneurs • The Holmes Center • Minnesota Cup • Ventures Enterprise• Tech Transfer •...
Thank You“A healthy economy is one driven not just by greaterefficiency and productivity but also by innovation.”Thomas Fr...
MOJO Startup School
MOJO Startup School
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MOJO Startup School

  1. 1. STARTUP SCHOOL 2012
  2. 2. What’s MOJO• Innovation Co-operative• Working to build and promote MNs innovation ecosystem• Support to MN startups and high-level collaboration• Action-oriented
  3. 3. Startup Ecosystems“Boldness of enterprise is the foremost cause of America’srapid progress, its strength and its greatness”Alexis de Tocqueville
  4. 4. U.S. High Tech Economy• Total employment of 5.75 million workers• Tech employment up 115,000 workers (2%) in first half of 2011• Average wage of $86,800 in 2010 more than 93% higher than average private sector wage of $45,000
  5. 5. Hot Spots for High Tech in U.S. Forbes list in 5/2012 of 50 Metro area hot spots rated based on employment growth in sectors most identified with high-tech (software, data processing, internet publishing and STEM)  1. Seattle  2. Washington D.C.  3. San Diego  4. Salt Lake City  5. Baltimore ….  26. Minneapolis  Major players of the past: 7. Silicon Valley and 11. Boston
  6. 6. Where We Stand  In a similar study to Forbes by the Atlantic Magazine, Minneapolis- Saint Paul ranked 17th in high-tech metro areas  Concentration of high-tech companies, patents per capita, and average annual patent growth  Study credited U of M tech status for the area’s high ranking
  7. 7. Some MN High Tech Stats 120,800 high-tech workers in 2010 (17th in US) 2,900 jobs lost between 2009 and 2010 High-tech worker earns $79,200 (20th) 7,900 high-tech establishments (17th) 2nd in electromedical equipment, 6th in computer and peripheral equipment mfg, and 8th in electronic components mfg  TechAmerica Foundation Oct. 2011
  8. 8. Room for Improvement in MN Low % of regional VC $ flowing to “seed stage” or “first round” investments (MN only exceeded Natl average in VC financing 5 of last 15 years) Declining share of entrepreneurs and high tech jobs (2.4% loss in 2010) Rate of loan origination to small/mid-size businesses are 40% lower than leading regions Modest Wage Growth (2.7% from 2000 to 2008) Innovation Contraction (48th in entrepreneurs/capita)
  9. 9. What are hot spots doing well? Presence of solid tech-oriented companies Substantial employment in R&D Flexible regulatory environment Well-educated and diverse workforce Expansion in STEM jobs Affordable cost of living Broad tech economy Marketing!
  10. 10. How to Improve High Tech in MN  Capital Availability  Human Capital  Innovative Ideas  Legislative  Technical Assistance
  11. 11. Capital Availability More seed funding and angel investments in the early, mid, and growth stages of companies More access to traditional banking More participation in Angel tax credit program and use of Crowd funding when it becomes fully available
  12. 12. MN Angel Tax Credit Tax incentive for investors who invest in startup businesses that are focused on high technology or new proprietary technology In 2011, the program’s second year, 114 businesses received over $64 million in investments
  13. 13. Human Capital Keep and attract talent with emphasis on STEM education (science, technology, engineering, and mathematics) MSP area strong in talent, though achievement gap and skills gap threaten position
  14. 14. Innovative Ideas Robust corporate R&D environment Technology Transfer improvement Statewide innovation clusters More tech collaboration
  15. 15. Start-up Companies It is important for start-up companies to focus on a couple crucial areas in their start-up  Building a Quality Team  Solid Business Plan  Raising Money  Getting to Market Early  Playing to Strengths
  16. 16. Compellent Started in Eden Prairie in 2002 as a provider of enterprise storage systems by Phil Soran Not profitable until 2008 but company skyrocketed. Purchased by Dell for $960 million in 12/2010. 300 employees in MSP at the time of merger Revolutionary “storage center” that lowers storage costs by 50% and cuts power and cooling costs by up to 93% for mid-size enterprises
  17. 17. Startup Panel Matt Kyle – Circle Biologics @matthewrkyle Corey Thompson – Naiku @naikuinc Parag Shah – Prodality @pshah88
  18. 18. Circle Biologics, Inc.• Plymouth, MN• Regenerative Medicine• FDA marketing clearance & Issued IP• Successful fund raising
  19. 19. The Financing Cycle
  20. 20. Methods of Financing a Startup•Equity / issuing stock •Common stock •Preferred stock •Convertible debt•Loans •Credit cards •Home Equity •Bridge loans •Friends/family
  21. 21. Investment Community •Accredited Individual Investors (Angels) •Angel Networks •Private VC firms & Family Offices •Venture Catalysts •Specialty Funds •Corporate Venture Funds •Venture Capital Firms
  22. 22. Other Sources of Capital•Contests/Prizes •Specialty Finance•Govt. Grants/Loans •Equipment loans •SBIR / SBA •Inventory financing•Customers •AR financing •Working Capital loans•Vendors •Economic Dev.•Distributors
  23. 23. Angel vs Venture Capital Investments Angel 2009 Venture Capital Billions Invested $17.60 $20.50 #Companies 57,225 3,133 Average Investment $307,558 $5,584,376 % in Seed/Start-up Stage 35% 9.37% #Active angels/VCs 259,480 794 2010 Billions Invested $20.10 $23.39 #Companies 61,900 3,612 Average Investment $324,717 $6,475,637 % in Seed/Start-up Stage 31% 11.30% #Active angels/VCs 265,400 2011 Billions Invested $22.50 $29.45 #Companies 66,320 3,909 Average Investment $339,264 $7,533,896 % in Seed/Start-up Stage 42% 11.20% #Active angels/VCs 318,480 Center for Venture Research at University of New Hampshire, PriceWaterhouseCoopers, NVCA,, and Thomson Reuters
  24. 24. Community Resources The Collaborative
  25. 25. University of Minnesota• Training Entrepreneurs • The Holmes Center • Minnesota Cup • Ventures Enterprise• Tech Transfer • Office of Tech Commercialization • Medical Devices Center
  26. 26. Thank You“A healthy economy is one driven not just by greaterefficiency and productivity but also by innovation.”Thomas Friedman, author, That Used to Be Us

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