The document provides information about MOJO Innovation Co-operative and Minnesota's startup ecosystem. It discusses statistics about high-tech employment and hot spots in the US, noting that Minneapolis-Saint Paul ranks 26th. It identifies areas for improvement in Minnesota including capital availability, human capital, innovative ideas, and legislative support. It then provides recommendations in each of these areas to strengthen Minnesota's high-tech industry, such as increasing seed funding, improving STEM education, fostering technology transfer, and developing innovation clusters. Examples are given of successful Minnesota startups like Compellent and resources like the University of Minnesota are highlighted.

1. STARTUP SCHOOL
2012

2. What’s MOJO
• Innovation Co-operative
• Working to build and promote MN's innovation ecosystem
• Support to MN startups and high-level collaboration
• Action-oriented

3. Startup Ecosystems
“Boldness of enterprise is the foremost cause of America’s
rapid progress, its strength and its greatness”
Alexis de Tocqueville

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. 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. 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. 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. Room for Improvement in MN
 Low % of regional VC $ flowing to “seed stage” or
“first round” investments (MN only exceeded Nat'l
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. 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. How to Improve High Tech in MN
 Capital Availability
 Human Capital
 Innovative Ideas
 Legislative
 Technical
Assistance

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. 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. 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. Innovative Ideas
 Robust corporate R&D environment
 Technology Transfer improvement
 Statewide innovation clusters
 More tech collaboration

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. 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. Startup Panel
 Matt Kyle – Circle Biologics @matthewrkyle
 Corey Thompson – Naiku @naikuinc
 Parag Shah – Prodality @pshah88

20. Circle Biologics, Inc.
• Plymouth, MN
• Regenerative Medicine
• FDA marketing clearance & Issued IP
• Successful fund raising

21. The Financing Cycle

22. Methods of Financing a Startup
•Equity / issuing stock
•Common stock
•Preferred stock
•Convertible debt
•Loans
•Credit cards
•Home Equity
•Bridge loans
•Friends/family

23. Investment Community
•Accredited Individual Investors (Angels)
•Angel Networks
•Private VC firms & Family Offices
•Venture Catalysts
•Specialty Funds
•Corporate Venture Funds
•Venture Capital Firms

24. 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

25. 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

26. Community Resources
The
Collaborative

27. University of Minnesota
• Training Entrepreneurs
• The Holmes Center
• Minnesota Cup
• Ventures Enterprise
• Tech Transfer
• Office of Tech Commercialization
• Medical Devices Center

28. Thank You
“A healthy economy is one driven not just by greater
efficiency and productivity but also by innovation.”
Thomas Friedman, author, That Used to Be Us