4 min read February 2023 — In an interview with Invest:, Neela Mollgaard, the executive director of Launch Minnesota, spoke about the initiatives her organization is taking to tackle the challenges faced by startups in accessing capital and promoting awareness and accessibility for all entrepreneurs, regardless of their sector or location.
What have been the key milestones for Launch Minnesota over the past year?
There has been a lot of activity not only with Launch Minnesota but also with our partners and innovators throughout the state. At a high level, one of our key goals is increasing access to capital. In 2022, we were able to distribute $2.53 million in grants directly to startups. There were 87 unique grantees and 61% of the founders were women, veterans, people living in areas outside of the Twin Cities, or Black and Brown founders, something we are very proud of.
Furthermore, our grantees have cumulatively raised nearly $80 million (according to Pitch Book) since we first started the program in late 2019-early 2020. For every dollar we gave in a grant, our grantees were able to leverage and bring in $12.40. This shows a good return on investment for taxpayers. Demand for grants exceeds the supply of available funds available, and we are seeing positive outcomes. Additionally, 100% of the grantees we surveyed in their closeout surveys said that the funding has helped propel their business forward. This is a testament to the success of our efforts.
Our second goal is to create a connected and coordinated ecosystem, research has shown this increases the rate and success of new business formation. Our Launch Minnesota network is made up of six regional hubs and statewide partners, all working together to support startups through education, mentoring and more. As a result, we have seen a 20% increase in regional and statewide connectivity among entrepreneurial support organizations.
On the talent side, we continue to provide Lean Startup education for entrepreneurs across the state at no cost, through partnerships with the University of Minnesota and other education providers. We are expanding opportunities for pitch competitions and connecting entrepreneurs to subject matter experts through a platform called the Minnesota Exchange. This platform, powered by local startup Kinetic, has seen a 94% increase in participation. Our goal with Launch Minnesota is to support entrepreneurs and startups by empowering and elevating the entire ecosystem, including higher education institutions, the investor community, corporate innovators and local governments, to seek synergies and grow our innovation economy.
What are some of the strategies you are implementing to help startups navigate the current economic landscape?
We are taking multiple steps to address the challenges in accessing capital. Firstly, we’re increasing outreach and providing clear information about the various grants, low-interest loans, pitch events and other sources of capital that are available through our partners and others throughout the state. We have also partnered with the University of Minnesota, Medical Alley Association and Minnesota SBIR/STTR to host quarterly Minnesota Venture Pitch Events, which are open to startups from any sector and geography in the state. This is providing greater access and exposure for innovators and leveling the playing field.
Through new Federal SSBCI funding, our state is launching a new state-wide venture fund and other new funding vehicles. This funding better helps address the continuum of funding needed for startups. Additionally, we’re working with partners to engage and educate investors and potential investors on the value of investing in Minnesota innovators and amplifying Minnesota as a destination for investment.
What sets Minnesota apart as a great place to do business?
What sets Minnesota apart is the passion and drive of our innovators. They’re motivated by their commitment to solving problems, not just by dollars. Our deep ecosystem, including strong Fortune 500 companies and top-notch higher-education institutions, also sets us apart. There is increased participation and collaboration among support organizations to help startups start and scale faster. People in Minnesota care about helping others and support the mission of solving important problems. This care and collaboration are what truly makes a difference.
In which ways is the organization championing diversity, equity and inclusion?
We’re creating greater access and awareness for all entrepreneurs, regardless of sector or geography. For example, we’ve expanded the Minnesota Venture Events to include all entrepreneurs and we’ve made educational resources more accessible to everyone. Our focus is on making sure that we are serving the needs of all entrepreneurs, particularly the underrepresented and underfunded founders.
What is your outlook for Launch Minnesota and what are your top priorities?
Some of our top priorities are to maintain our three key goals: increasing access to capital, fostering a connected and collaborative culture and boosting entrepreneurial talent and expertise. Our primary objective is to educate current and potential investors on the significance of investing in the innovators in Minnesota and the problems they are solving. We also aim to strengthen our connection with our corporate innovators and create better pathways for startups and scale-ups to access their expertise and insights. Additionally, we want to continue to enhance our tech commercialization efforts, building on our successful collaborations with organizations like the University of Minnesota and Mayo Clinic.
Minnesota is ranked as one of the Top 10 states in the country for its startup community, with the Twin Cities rated as the No. 4 emerging startup community globally and No. 2 nationally. Our aim is to get more participation from people across the state, not just those in the startup ecosystem, and to have them become more involved in our innovation ecosystem. We believe that Minnesota’s strong human capital can play a role in mitigating the risk involved in securing capital. Our call to action is for everyone in Minnesota to give their wealth, wisdom and work to support local entrepreneurs. This can be through investment, mentorship, sharing subject matter knowledge or even simply shopping locally. By becoming more engaged, we can help our state continue to grow and thrive.
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