Dear Minnesota Angel Investor

by Guest

By Joe Serrano

Last week I had a coffee with a Minnesota angel investor and we began talking about Instagram and its recent $1b exit to Facebook. I gathered that he had not heard of Instagram prior to the acquisition announcement, which really got me thinking:

If Instagram had been started in Minnesota, what would the experience of raising capital from our local investors have looked like?

First, let me set the stage. I have read commentary on the Minnesota investment ecosystem and heard from angels and venture capitalists, all of which collectively summarize that Minnesota entrepreneurs are: (a) naïve, (b) not prepared to ask for money, and ( C), not putting in the hard work.

After all, ‘Good ideas will always get funded’ – right?

Well, I’ll say it: Minnesota angel investors are not thinking big enough.

It seems the vast majority of (the few) active tech angel investors are only playing for bunts and singles – the safest of bets – that will never really move the needle in the way that a smash hit, like Instragram, can. You can’t win a championship without first thinking big and the reality is there are entrepreneurs right here and now, that are fighting tooth and nail to get that shot from Minnesota. Local entrepreneurs who seriously want to crush it.

The over reliance on early stage due diligence is the proverbial stuffed animal a toddler needs before they can go to sleep at night. On the surface, it’s comforting, but the risk of losing every dime invested is marginally different, while the potential upside is radically different.

I have concern with angel investors who are Minnesota nice enough to show up and dip their toes in, but downright counterproductive when it comes to jumping in with the confidence that they themselves can swim. This conservatism is contagious and demoralizing to big swinging entrepreneurs.

If entrepreneurs are going to aim past the fences, it helps they not only to have the right mindset and training, but also the right backing. While we are preparing the often required (but rarely feasible) detailed business plan at the mercy of potential investors, hungry investors in different parts of the country are stacking their lineups with entrepreneur after entrepreneur ready to tear the hide off entire industries based on sheer will alone. They are more concerned with intention and less focused on the nuances of trying to have it all figured out from the start. As a result, our entrepreneurial competition is playing with juiced bats.

If Minnesota angel investors feel that Minnesota’s tech entrepreneurs are not prepared, I think they need to take a good look in the mirror.

You don’t know the mobile space? Never heard of Instragram? Can’t fathom why they were acquired for a billion dollars? Rather than fearing what is not understood and retrenching, do the hard work that it takes to become a savvy investor in today’s world.

Place your relatively sure bets now and then, but by all means when you see ambition, passion and desire from that entrepreneur sitting across from you, don’t get scared – get turned on.

“The biggest startup ideas are terrifying” — Paul Graham


Less emphasis on the relic that is a business plan and more emphasis on the opportunity will better serve your desired outcome while enabling entrepreneurs to do what they are here to do — figure it out as they go along. Business plans don’t predict success at the start; often times, they limit necessary creative exploration and waste critical execution time. Building a business is more art than science. Have some courage and faith!

When I met with a well known Silicon Valley character a few weeks ago, she scolded my business partner and I for being too “midwesternized” — or in other words, small minded.

How awkward.  I’ve become a product of my environment.

She said we needed to be more brash and bold in how we were going to create an entirely new industry. We needed to unapologetically state that we were here to lead this company as a game-changer.

The message applies equally same for Minnesota investors. We have more than enough talent, money, and connections here to make it happen. Let’s stop apologizing for being in Minnesota. Shed this insecurity. Embrace fear and take big bold risks.

Let’s work together on overcoming these barriers, because as entrepreneurs, we have them too.

We need you, Mr. angel investor, to commit to being best in class. Once considered ‘Money-apolis’, we were an envied business hub just a generation ago. It’s time to put Minnesota on the map again. Stop half-assing it and get behind your big swingers before they’re poached or pushed away.

And should I ever become complacent from success, if my biggest issue becomes where to dock my boat on Lake Minnetonka and I start asking to see detailed financials for seed stage companies, belittling and berating entrepreneurs who should not have it figured out yet, I hope that a young upstart finds this piece and holds my feet to the fire.  I hope she looks at me with a big smile and says: “Joe, you once said that the best way to predict the future was to create it. Do you remember that? You actually did it, but not alone.”

Join your entrepreneurs — the creators, makers and doers of the future — in this heavy lifting.


  • Patrick Donohue

    Joe, nice job. Thank you for sharing!! 

  • Josh Smith

    Strong play, Joe!  Talent and resources do exist here and they are abundant.  However, I see whats happening in other (smaller) towns like Indianapolis and wonder why we aren't seeing more seasoned investors and business leaders invest in initiatives that allow start ups to flourish.  Check out
    Culturally we need a shift to really get things moving in our tech community.

    • Joe Serrano

      Cool link Josh. You are right. We need a cultural shift. We have great resources like CoCo, Project Skyway, Minne*, etc. The only missing component? Money and courage. This little house of the prairie mentality is getting old. It's time to shine.

  • Farhan Muhammad

    I am thrilled to finally see an opinion column at Tech{dot}mn. I griped about it to Mike Bollinger in near past. The big part of big thinking and game changing mindset is to start forming strong opinions and start being vocal about them. 

    Good post Joe. We will get there some day. Let's stay vocal about tech environment in this state. News stories are fine and all, but editorials go a long way in positioning us as thought leaders. 

  • Neal Tovsen

    Thanks for putting it all out there Joe. After seeing several of the best startups leave MN, and knowing that there are at least several more who are considering it, I'd sure like to see the culture change. We're losing our best and brightest.

  • Colin Lee

    Excellent piece. I clearly remember a Minnesota angel telling me that the most important piece to getting funded was not traction or a product, but a business plan. Given the latest startup ideas from Eric Ries and Paul Graham, Silicon Valley thinks of a business plan as a dynamic and fluid structure that sets your initial hypotheses to begin validated learning and exploration. If your business plan doesn't change as you learn, you probably failed. Over there, the key ingredient of the plan is probably the biographies of the founders, clear indicators that they've built great things in the past, top-notch advisors, and evidence of validated learning or market traction.

    Minnesota, on the other hand, still seems to read a plan as paint-by-numbers to a larger extent.

  • Jon Coudron

    Couldn't agree more! 

  • Andrew Kamin

    Amen, Amen! Nicely articulated truth about the local investment culture.

  • GraemeThickins

    I have an idea – a community service project. Let's each of us go out and help one Minnesota angel set up an Instagram account.  :-)

    • Joe Serrano

      How about we start with a Facebook or Twitter account. :)

  • Deseanmills

    Great Great Read!!!! Love it!

  • Brandon Ward

    Great editorial Joe. I
    think most investors deep down realize that the bases need to be loaded in order to
    hit a grand slam, and that there’s a massive delta in terms of the risk and
    reward potential between Investor A who is looking for a “sure thing” (base run)
    every time, versus Investor B who is looking to go way beyond first base with a
    product or service with a talented team behind it who can potentially knock it
    out of the ballpark. Therein lies the art I believe.

    The art that
    is practiced by the entrepreneur must also now be practiced, to a certain
    degree, by the investor, especially now with the JOBS act passing and crowdfunding
    opportunities available to basically anyone with an idea. If an investor truly
    wants a grand slam opportunity (a-la Instagram), extremely early stage that is, they must possess
    a meaningful amount of ahead-of-the-curve knowledge about the industry where they desire to invest
    their money if they wish to gain access to such companies. And hopefully they're looking to bring more to the table than just their wallet.

    I’d like to
    meet you some time. Sara Marino sent me an email regarding your company about
    six month ago or so, I’m curious to learn more about what you guys are doing. I'm going to post your article on my Twitter feed!

    • Joe Serrano

      Thanks Brandon. I agree with your bases loaded comment. Value added investors in consumer internet here are hard to find – but we have to start somewhere, so faith in the individualsthey are appropriately obsessed with their sector more so than the model itself is important. I have very few angels ask me about my experience counting ceiling tiles at 3am in my last business. I would hope that this successful entrepreneurial navigation experience, as well as the ability to attract a great team would prove execution aptitude well beyond a business plan would “say” I will do.

  • John Deedrick

    Simply the best most honest article I have read for quite some time.

    • Joe Serrano

      Thanks John,

      Many of us want to make us world class again. If strong, authentic words provoke real emotion, perhaps we can start a conversation, and start getting some real, authentic results. 

      • Ben Damman

         +1 for brutal honesty, so long as we all appreciate the important role investors play

        • Joe Serrano

          Clearly important. Perhaps the disconnect is education based on mutual respect- bridging the digital divide for those with the fuel to allow the ecosystem to take off.

          • Ben Damman

             Yes. Well said, my friend!

  • Ben Damman

    Thank you, Joe!

    Our region's investors often fail to appreciate the difference between a startup and a business in the same way that people in the midwest generally fail to understand the distinction between “IT” and “Software Engineering.”

    Investors out there: please accept that a startup is an organization formed to search for a repeatable and scalable business model, and stop evaluating technology startups and founders using the same methodologies you would use when evaluating small businesses and their proprietors.Investors in early-stage technology startups should be using their effectual reasoning skills as much as they employ causal reasoning.  Because if all you do is use causal reasoning, it's easy to talk yourself out of investing in most opportunities.In order to obtain uncommon results our region's investors must show leadership and start using strategies and practices that, at least locally, have been uncommon. I'm not saying make poor or uninformed decisions.I'm just saying…don't tell me to show you a business plan solely because that's how everyone else you know evaluates deals.  Being able to provide a business plan predicts success as much as your ability to receive them makes you a good investor—nada.Let's not forget that there are two major groups of innovators, those that conceive of innovations and pursue their commercialization, and those that are saavy enough to back them with resources.

  • Rashaun P. Sourles

    Joe, well said! I never met you while I lived in MN, but I really wish I had.

    I left MN this past January to join a TechStars incubator in NYC called Blueprint Health. I didn't know if I'd return to MN but I had no reason to think that I wouldn't. My condo, friends & family–my life was all in MN. And I was building a company in MN for 14 months.

    But that's all changed. I'm not coming back to MN. And you know what, it wasn't a choice: it's my obligation as a servant to my company's vision to take advantage of my new ecosystem–the mentors, advisors and now, investors whom I've attracted to Needl in my new home, NYC.

    My opinion below is plain honesty from a guy who used to call MN home. In just 4 months what I've learned in NYC about the rapid disruption happening in tech and education is mind-blowing. What I observe is that the *well-executed* accelerator model is disrupting early-stage tech and becoming the new de-facto “college”. Accelerators are the place to gain the elite network of investors and advisors you need to launch your business at massive scale. The place where you can re-invent your career at any age by solving a sticky problem that only you can see as an expert who came from that vertical and lived the problem. It's the place where 20 year-olds work alongside 50 year-olds, both sleeping at the office and working 20-hour days. It's pretty neat, and it doesn't matter if you're from Minneapolis, Miami, or Madagascar. Are you willing to bleed for your company vision? Is it a huge market play? Do you have the ability to attract superstars to your team? On Day 1 of our accelerator the partners said “we didn't choose your idea: we chose YOU. Scrap your business plan. Start over from scratch if you want. We believe in you. We'll support you.”

    These words were poignant and pierced through each of us like an arrow. At Blueprint we had a father of 5 from Utah who left his children with his ex-wife. We had from China the parents of a three-month old, who left him behind with grandparents in Mexico. We had two sets of med students who dropped out. We had a 20 year-old college student who commuted between NYC and Philly every week, just barely getting the credits he needed to walk the stage. Tremendous sacrifices! And all of us are staying in NYC, probably the least affordable place to launch a startup, on all levels.

    Entrepreneurs and companies like mine are being plucked out of markets like Minneapolis to come work with like-minded entrepreneurs and investors. People who don't have patience to let a great idea die on the vine. Folks who know you get one shot in the new world of tech. And that moments of opportunity are fleeting and often require lots of capital to fund inorganic growth in the pursuit of creating new markets, or disrupting old ones.

    People in NYC use the word “disruption”–and they mean it! Have courage. Be brave. Attack a problem so insanely out of your league and above your pay-grade, that everyone thinks you're crazy to take it on. Challenge entrenched industries. Sacrifice everything for your vision. Enough being nice: Be bold!

    Caution: You do need a committed team, early customers, and investors who share your “mania.” 

    I'd like to see MN build a startup ecosystem that rivals the best. But just like building a startup, building an amazing ecosystem takes leadership & vision. Study the story of Brad Feld & David Cohen. Read about how David got rejected by Paul Graham to launch YC in Boulder and how with Brad, he decided to build TechStars instead. 

    Ask yourself, is MN going to be a vibrant startup ecosystem that others try to emulate in the next few years? Brad & David transformed Boulder, Seattle, NYC, San Antonio and Boston in just 5 short years. That's the kind of vision & leadership I think MN needs–a desire to be #1, and to be #1 soon.

    • Patrick Donohue

      “People Invest in People!” Rashaun – great to see you are doing well in NYC! Excellent comment! We do miss you in MN, but executing your vision comes first!! Go get ’em!

    • Joe Serrano

      Rashaun,  this is starting to sound more like people asking “Who is John Galt?” Awesome reply. Wish we didn't lose you here!

  • J Brent Hanson

    Joe – Too True!  Entrepreneurs need to paint a picture of the vision for the investors.  Investors need to admire the art and decide whether to buy it.  Unfortunately, too many investors focus on how many ounces of paint and how many bristles in the brush rather than the overall beauty of the art.

  • Darren Cox

    I can honestly say that I am ashamed of myself after reading your piece. I took great pride in just being good enough to get funded, but in doing so I gave up my soul. I started believing all of the people around me who spent no time telling me how they would support me no matter what, and instead became resigned to believing that as long as I choose to live here, I have to live by the rules of the game as it is played here.

    I have a ton of respect for most of the people who have helped our company get this far, but I agree 100% that it is completely against the rules to think really big here.

    Having said that, I hate to be the guy who bitches but doesn't offer solutions, but No amount of cajoling is going to change the folks here in MN because they are all convinced that austerity and patience are virtues. I, on the other hand, think of them as excuses and acomplete waste of time for a tech startup.

    I think what we need instead is for there to be some actual competition for the privelege to be included in the future of our company. It is pretty hard to compete against the coasts when we are not even close to playing by the same rules.

    As much as I hate to say it, I am sick and tired of apologizing for wanting to be awesome.


    • Joe Serrano

      Wow, I just reread your reply Darren. That is pretty powerful. It does feel like that though [apologizing for wanting to be awesome]. I don’t think you sold your soul – you did what was required as a steward of the business you believed in. I, on the other hand have probably just been blacklisted by every angel investor in Minnesota. :) My intent, of course, is to foment exactly these discussions and try to find solutions to help all of us as entrepreneurs. Thanks for being a creator Darren. I salute you.

      • Darren Cox

        The Minnesota angel blacklist might exist, but if it does and I am not on the top of it already, then writing your opinion probably won’t get you there either.  Believe me… I have had much more serious and public gaffes than simply expressing my opinion.  Besides, most of the angel investors in town don’t even know that TechdotMN exists. (which is as much a part of the problem as anything else you mentioned).  The folks who do pay attention are mostly the same people who are fairly powerless to do anything about the lack of entrepreneurial spirit pervasive in their ranks.

  • Jeff Pester

    As someone who moved from the Twin Cities to Palo Alto a few years ago I've heard multiple variations of this “MN angels suck” argument, and I'm here to tell you it's 99% nonsense.
    The real problem is that there isn't a fully-functional ecosystem for the types of companies you're referring to. And without an ecosystem that can move startups with momentum to the next level, local angels have virtually no chance for exits. 

    A robust ecosystem for consumer Internet startups includes (among other things):  

    1) Risk-taking entrepreneurs, and risk-taking early employees.
    2) 10's of millions of $$ of readily available seed stage risk capital. 
    3) Experienced mentors with subject-matter specific expertise. 
    4) A large and mobile pool of experienced human “middle-ware” resources (PMs, UI, UX, QA, etc), in addition to world-class engineers.
    5) A large number of potential acquiring companies. 
    6) A large number of related companies that will hire your employees immediately when your company fails.
    7) A large network of financiers and management that know how to put teams and deals together. 

    Sadly for consumer Internet companies, Minnesota is lacking in nearly all except entrepreneurs and certain classes of engineers. Ask any of the Internet companies/people that have left for California and they'll tell you the same thing. If you're going to fish, why not go where the fish are? I direct your attention to Dwolla's Ben Milne: “I Love Iowa, But If I Could Do It All Over Again, I Would Have Moved To Silicon Valley” >> 

    Without a fully-functional ecosystem local angels are forced to extract almost punitive terms to offset the downstream deficiencies of their local ecosystem. That's an economic reality. And besides, most of the reasons that promising Internet companies/talent leave Minnesota have nothing to do with lack of angel financing.

    Brad Feld from TechStars said it can take 20 years to develop a real ecosystem. New York just got to that point within the last couple years. New York for god's sake! Brad's base in Boulder is several years in to the process and is only now starting to achieve some meaningful center of gravity. 

    In the Bay Area, there's a pervasive culture of “recycling” $$ and time into the ecosystem. In all my time in Minnesota I saw almost none of that, and as an entrepreneur that was the most demoralizing thing of all. And no, your sponsoring of a keg of beer at MinneDemo does NOT count as support Mr. MN “Venture Capitalist”.

    The good news is that Minnesota will always be a good place for certain types of technology companies, typically enterprise types with customers and cash flow. The challenge as always is simply to find out what the local ecosystem can or will support, and then leverage the hell out of those assets. If on the other hand you're a consumer Internet company with big plans, I'd start packing my car fairly soon. 

    P.S. Keep in mind that Instagram was purchased because it was strategically important to Facebook (and others). Beyond that, the investments in 97% of all the other photo sharing apps are total busts and the angels in all those deals lost all their money.

    • Joe Serrano

      Jeff, I was wondering if I would see a reply from you. I saw one in response to another angel investor post in the past. Clearly you could have wrote this as well as I could a few years ago. Your reply is pretty grim. Almost an obituary. Well I hope I am not the only one with a little juice left to see if we can collaborate and make it better here before I would decide to leave. I thought the Bay Area's genesis was WWII military hardware and software that spun out more and more investment and innovation. Somehow that led to social media? Why can't our wins in hardware, enterprise software, medtech, and online and offline retail and CPG be spun out to major wins in social commerce, etc? 

      • Jeff Pester

        Joe, my point was to show that there's no real financing because there's no real ecosystem infrastructure at scale. Because of the lack of ecosystem infrastructure, local angels have to gravitate towards more traditional deal evaluation and terms that focus on business plans and cash flow. But that doesn't work for consumer Internet companies. So it is what it is. You can't blame local angels for larger infrastructure deficiencies.

        Although this might be a bit extreme, consider this analogy: I want to build a movie studio in Minnesota because I live there. But all the actors, dealmakers, money, infrastructure, and industry expertise are in Hollywood.

        What are the chances you're going to be able to compete for talent, money, and deal terms from Minnesota and produce a mega-blockbuster (ala Instagram)? Can I build a great local/regional theater company in MN? Sure. Can I build the next MGM in MN? No.

        That's what's it's like for consumer Internet companies re MN/SiliconValley. It is what it is.

        • Rashaun P. Sourles

          Jeff, your comment about Minnesota lacking a scalable startup ecosystem & infrastructure is correct. However I believe that the analogy you used to support your point is misplaced in a digital era where Minnesota could cheaply import all its infrastructure needs from “abroad”. The analogy you used referenced an industry (Hollywood) that relies on physical assets. But I believe that technology enables any region with a sufficient “draw” to attract the infrastructure resources that are available in the top-tier tech markets.

          To riff off of your analogy:

          Actors = Entrepreneurs. Minnesota has plenty of entrepreneurs. And Minnesota could have more if there were a compelling reason to leave somewhere else and come to Minnesota to launch and grow an IT company.

          Dealmakers = Anyone who can use their reputation to make a warm introduction on behalf of an entrepreneur or potential investor. Minnesota has lots of folks who act as “connectors” in the entrepreneurial ecosystem. But intros should only be offered if the “connector” is truly putting their reputation on the line, not just being “nice”. Niceness doesn't help entrepreneurs. Entrepreneurs need constant straight-talk to make sure they don't become delusional.

          Money = Angel/Seed/VC/Growth Capital. Money flows easier in 2012 than ever before. Outsiders would love to bring money to MN companies if MN had an easily recognizable “brand” of startup we excel at. Case-in-point: San Antonio is being branded “Cloud” because of TechStars and sponsorship from hometown hero Rackspace and (Dallas, TX-based) Softlayer. San Antonio is being written about as a “Cloud” market, Cloud companies are flocking to San Antonio, and so the virtuous cycle begins…

          Infrastructure = Bits/Broadband? I'm just following the logic of your analogy. If in the movie industry infrastructure is the foundation on which movies are made (studios/sets) I'm not sure how that fares in the digital world. On several occasions in the TechStars/Blueprint Heatlh accelerator we watched mentors via taped presentations, heard taped talks, and Skype'd with mentors who are blazing trial in healthcare around the world. If infrastructure is the means of production, I think it's the appropriate use of technology that helps to solve this problem.

          Industry Expertise = Successful entrepreneurs & VCs. Again, something that MN has, but could augment by importing talent (on-loan, even) from other places. In tech location matters less than mindset. If folks outside of MN recognized MN as a tech hub with a distinct “brand,” say EduTech, outside expertise would flock to take part in the creation of the next wave of Education companies growing in MN.

          Jeff, you prefaced your analogy by acknowledging it might be a bit extreme, so I know you're a reasonable guy and just wanted to provide an example reinforce your argument. I merely responded as a thought-experiment–please trust that I agreed with your core argument about the ecosystem being what's important to cultivate.

          But here's the key question everyone should be asking: What “brand” defines the MN tech ecosystem? A question that I ask folks in NYC all the time–“What is Minnesota known for?” People usually reply cold winters, Prince, Target, a wonderful airport, and lakes. When I've dug deeper what I also learn is “education”–good schools, a high value on education. I'd like to see Minnesota brand itself as THE leading place to launch and grow EduTech companies. Seems a good fit given how folks already view MN.

          If Minnesota wants outside help in re-inventing itself as a tech/investment hub, it would help to have a strong & clear brand. At least that's a start…

  • Lukas Dickie

    Jeff Pester — my sentiments exactly on your comment, and I too
    moved our startup to the west coast. 
    The ecosystem in Minnesota for tech startups pales in comparison to the
    midwest neighbors and beyond.

    In response to Joe Serrano's opinion, which I wholeheartedly
    relate to, the fault does not fall on any one particular group or individual.  Let me see if I can put some
    perspective from my viewpoint.

    I was fortunate to start my adventures in a small town in
    southern Minnesota at the age of thirteen.  At the time, I was calling California via a 3600 baud modem
    to get Internet access for free (sans the long distance call).  After racking up an $800 phone bill
    (parents were not too thrilled), I had to think fast to find alternative means
    to access the Internet because, at that time, public Internet access did not
    exist in our quaint little Minnesota town.

    I remember walking into a just opened coffee shop started by
    a brave woman and saying, “Hi, my name is Lukas and I'd like to get Internet
    into our town.  I hear coffee shops
    are the best place for that.”  Well,
    I was right.  Over the next five
    years I helped build five Internet providers, rolled out cable modems before
    anyone knew what broadband meant, learned I'm quite capable of achieving
    whatever I put my mind to, and essentially pave my way for the future.

    By the time I was twenty I had traveled the US, Europe, and
    South Korea; all because of the skills I developed from my earlier years.  I switched my attention to building
    software as a service companies before the term SaaS was understood.  Again, experience gave me insights and the
    ability to read long-term market trends.

    After living in Europe, I moved back to the US and soon
    after set my sights on my current startup.  I made a point to start in Minnesota because I felt it would
    be wonderful to contribute back to my community, the place where my adventures
    began.  I later realized Minnesota
    was not ready for my ambitious vision… local investors and entrepreneurs
    alike thought I was “just another dreamer.”

    Case in point, I gave a pitch and recall a developer from the
    audience spouting out, “you can never be Google.”  Well, with that attitude he's absolutely right.  Lucky for me, I lack that attitude.  Yes, I am a dreamer.  But I'm also pretty damn smart.  And fun.  And goofy.  And
    crazy.  The sort of things that
    give me the everyday courage to say, “I can do this.  We can do this.” 
    More important, though, is experience.  Know what you are doing and be confident you have the skills
    and team to execute.

    If Minnesota truly wishes to attract and retain promising
    tech startups, the ecosystem and attitude must change.  As I said to Jeff Pesek earlier this
    year, “Never quit.  Never follow.  Change is the only constant.”


    • Joe Serrano

      What I love about your style Lukas is that you “Criticize by Creating”. I find a bit of bait-and-switch when it comes to dreaming and acting here too. It is highly encouraged by some who sometimes even lead the ecoystem itself, only to come to a demoralizing conclusion when the time comes to step up to the plate.

  • Jeff Pester

    Substitute “Twin Cities” for “Seattle” in this article and you have the same story: “Starting a Company in Seattle: Pros and Cons” >>

    Cons are all the same: Investment Strategy / Risk-Aversion / Education

    Lesson: The situation isn't peculiar to Minnesota – it's the same for any city not named San Francisco or New York City.

    • Joe Serrano

      A link to the good old days circa 1996…  A time when MORE venture dollars went into the Minneapolis metro area than ANY other metro area in the country – even New York. My favorite quote:  “Everything is always impossible before it works. That is what entrepreneurs are all about–doing what people have told them is impossible.”

  • Fjaskulke

    Thank you posting this, great discussion!

    I'd like to provide a brief counterpoint.  I beleive what Minnesota needs is just what you describe, an Instagram moment.  Time 5.  Our investors need exits.  There are lots of angels and VC's in Minnesota that have capital tied up in investments that had planned to exit years ago.

    This is primarily because of our states dependency in the medtech sector.  Changes in the FDA and some bad timing caused 5 year exits to become 10 year exits.  Capital that should be reinvested is tied up.  New capital is going to support existing companies.

    M&A is picking up in this sector, making up for a weak IPO market.  IPO's have been slowly coming back.  Some more exits and Minnesota could be flush with capital looking for a home.

    Combine this with the rebirth of the high tech community outside of medical and we have the seeds for a robust growth story.

    As an example, a few years ago St. Jude bought AGA Medical for $1.3 billion.  One of the founders did quite well and now invests in local startups.  Another founder built Amplatz Children's hospital.

    We need more of those.

    I think the second thing we need is a way to put Minnesota on the map with our friends on the coast.  Two days ago my organization wrapped upts its 12th annual MedTech Investor Conference.  We had 375 people from around the country attending – CEO's of startups and VC firms/Corporate Development heads.  We created this event 12 years ago to actively recruit west coast and east coast venture firms to Minnesota. They were already coming here from time to time because of the device communtiy and still saw us as flyover land.

    That has changed.

    A marquee event is one way of doing it but not the only way.  Minnesota already has great tech companies.  The world knows about some of them.  They need to know them all.

  • Kat Haber

    Go Joe and all the bright social entrepreneurs of Minnesota and the midwest. You have in your culture the value of working hard. Add generous amounts of deep curiosity for and understanding of current leading edge tech and you may just launch the next big ideas worth funding.

  • Droy1385

    This is EXACTLY my experience with Angel investors in MN.  Frustrating with their lack of vision.