Minnesota Investment Network Corporation RAIN®  fund Presentation – Humphrey Institute September, 2004
Minnesota Investment Network (MINC)  dedicated to promoting community development by building capacity for equity investme...
MINC builds capacity for making equity investments by forming and managing local, statewide, and multi-state equity funds....
 
Minnesota Venture Capital Investment 2003 <ul><li>$203.8 Million VC Investment </li></ul><ul><li>99% Twin Cities  </li></u...
MINC strategy removes barriers that block the flow of capital needed by small business <ul><li>Form RAIN ®   funds  to enh...
RAIN ®   funds  are formal for-profit private investment funds. <ul><li>Organized as for profit LLC’s   </li></ul><ul><li>...
RAIN ®  funds  enhance investor returns. <ul><li>Share capital, expertise, and time </li></ul><ul><li>Increase the quality...
RAIN ®   funds  enhance community benefits. <ul><li>Sustainable investment fund </li></ul><ul><li>Source of  capital and e...
RAIN ®   funds  are organized and capitalized by its member investors. <ul><li>Structure </li></ul><ul><ul><li>Limited lia...
RAIN ®   funds  are managed by its members.  <ul><li>Establish Governance Structure </li></ul><ul><li>- Board, Officers, M...
MINC provides capital, formation and management support to ensure success. <ul><li>Provides proprietary templates, work sh...
<ul><li>Investment Process </li></ul><ul><ul><li>Screening </li></ul></ul><ul><ul><li>Deal flow management </li></ul></ul>...
RAIN ®   funds  are a proven model  $8 million available with $4 million invested in 17 companies! <ul><li>Lakes Venture G...
Capital Infrastructure 250K 500K 1 - 2 million 5 million (Van Osnabrugge & Robinson 2000) Friends, family and fools RAIN F...
RAIN®  funds C oncept <ul><li>Cluster Strategy </li></ul><ul><li>Capital </li></ul><ul><li>Proprietary deal flow </li></ul...
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  1. 1. Minnesota Investment Network Corporation RAIN® fund Presentation – Humphrey Institute September, 2004
  2. 2. Minnesota Investment Network (MINC) dedicated to promoting community development by building capacity for equity investments in rural businesses
  3. 3. MINC builds capacity for making equity investments by forming and managing local, statewide, and multi-state equity funds. <ul><li>$15 million Equity Fund </li></ul><ul><li>RAIN ® funds local/regional mini-quasi VC Funds </li></ul><ul><li>$10-35 million multi-state growth & later stage fund </li></ul>
  4. 5. Minnesota Venture Capital Investment 2003 <ul><li>$203.8 Million VC Investment </li></ul><ul><li>99% Twin Cities </li></ul><ul><li>18% Early/Seed </li></ul>
  5. 6. MINC strategy removes barriers that block the flow of capital needed by small business <ul><li>Form RAIN ® funds to enhance financial and community returns </li></ul><ul><li>Build capacity for making equity investments at local, state, and multi-state level </li></ul><ul><li>Provide capital, formation, and management support to ensure success </li></ul><ul><li>Provide experience management and disciplined approach </li></ul><ul><li>Proven model </li></ul>
  6. 7. RAIN ® funds are formal for-profit private investment funds. <ul><li>Organized as for profit LLC’s </li></ul><ul><li>Formed by angel investors (accredited investors) & institutions </li></ul><ul><li>Function as mini-quasi VC funds </li></ul><ul><li>Use thorough due diligence process </li></ul><ul><li>Invest locally, regionally and beyond </li></ul>
  7. 8. RAIN ® funds enhance investor returns. <ul><li>Share capital, expertise, and time </li></ul><ul><li>Increase the quality of deal flow </li></ul><ul><li>Ensure thorough due diligence and monitoring </li></ul><ul><li>Reduce transaction costs and operating costs </li></ul><ul><li>Increase capital available to sustain company </li></ul><ul><li>Enhance opportunity for timely exists </li></ul>
  8. 9. RAIN ® funds enhance community benefits. <ul><li>Sustainable investment fund </li></ul><ul><li>Source of capital and expertise critical to early and high growth companies </li></ul><ul><li>Helps recruit and nurture technology companies </li></ul><ul><li>Builds capacity for local wealth creation </li></ul><ul><li>Results in growth business creating good jobs </li></ul>
  9. 10. RAIN ® funds are organized and capitalized by its member investors. <ul><li>Structure </li></ul><ul><ul><li>Limited liability company </li></ul></ul><ul><li>Capitalization </li></ul><ul><ul><li>$500K or greater </li></ul></ul><ul><li>Member Investors </li></ul><ul><ul><li>$30-50K minimum investment </li></ul></ul><ul><ul><li>10-30% upon subscription </li></ul></ul><ul><ul><li>Accredited (angel) investors </li></ul></ul>
  10. 11. RAIN ® funds are managed by its members. <ul><li>Establish Governance Structure </li></ul><ul><li>- Board, Officers, Management </li></ul><ul><li>Establish Investment Criteria </li></ul><ul><li>- Geographic focus </li></ul><ul><li>- Business type and stage </li></ul><ul><li>Establish Investment Process </li></ul><ul><li>- Screening and due diligence </li></ul><ul><li>Approve Investments </li></ul><ul><li>- One vote per investor </li></ul><ul><ul><li>- Investment decision by 51% of quorum </li></ul></ul>
  11. 12. MINC provides capital, formation and management support to ensure success. <ul><li>Provides proprietary templates, work sheets and legal documents </li></ul><ul><li>Up to $100,000 capital investment </li></ul><ul><li>Ongoing management support </li></ul><ul><li>Access to deal flow </li></ul><ul><li>Access to co investors </li></ul><ul><li>Thorough due diligence and monitoring process </li></ul>
  12. 13. <ul><li>Investment Process </li></ul><ul><ul><li>Screening </li></ul></ul><ul><ul><li>Deal flow management </li></ul></ul><ul><ul><li>Due diligence </li></ul></ul><ul><ul><li>Pricing & structuring of investments </li></ul></ul><ul><ul><li>Closing & monitoring </li></ul></ul>MINC provides capital, formation and management support to ensure success. <ul><li>Organizational </li></ul><ul><ul><li>Membership Communication </li></ul></ul><ul><ul><li>Meeting organization </li></ul></ul><ul><ul><li>Bookkeeping </li></ul></ul>
  13. 14. RAIN ® funds are a proven model $8 million available with $4 million invested in 17 companies! <ul><li>Lakes Venture Group I and II, Alexandria, MN </li></ul><ul><li>Prairie Capital, Worthington, MN </li></ul><ul><li>North Star Fund, Grand Rapids, MN </li></ul><ul><li>Two in Iowa </li></ul><ul><li>One in North Dakota </li></ul><ul><li>In process: </li></ul><ul><li>5 communities in Minnesota </li></ul>
  14. 15. Capital Infrastructure 250K 500K 1 - 2 million 5 million (Van Osnabrugge & Robinson 2000) Friends, family and fools RAIN Fund Business Angels MIN-Corp. Equity Fund High Level of Investment Risk Assumed by Investor Low Seed Start-up Early growth Non-financial corporations Venture Capitalists Equity Market
  15. 16. RAIN® funds C oncept <ul><li>Cluster Strategy </li></ul><ul><li>Capital </li></ul><ul><li>Proprietary deal flow </li></ul><ul><li>Expertise </li></ul><ul><li>Local / regional ownership </li></ul>

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