Q2 2015 Quarterly Capital Review: 40 MN Tech Ventures Banked ~$72m in Q2 2015

by The TECHdotMN Team

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The TECHdotMN Quarterly Capital Review provides a most comprehensive look at all things money in tech every quarter.

For five years running, we’ve been following the paper trail to bring clarity around Minnesota’s entrepreneurs and the investment climate.  It’s compiled from multiple sources as proxy for capital, including: crowdfunding, incubators, angel investing, venture capital, corporate arm and private equity. It does not include public companies.

Consider this a worse case scenario as there are always undisclosed transactions not fully factored.

At least 40 different Minnesota tech ventures received ~$72m of investment capital during the second quarter of the year according to information collected and analyzed from April 1 through June 30, 2015.

Let’s take a closer look at what happened in Q2 2015:

+Q2 clearly topped Q1 in both the number of unique companies that raised (from 28 to 40 = +40%) and the amount of capital in aggregate ($49m to $72m = +45%). Year over year, when compared to the same period in 2014, those figures are -16%, +60% respectively.  You see there is a lot of volatility during each quarter as one large deal can make or break the top line and obscure the bigger picture; government issued tax credits also contribute to a distortion of timing.

+Minnesota’s Angel Tax Credit is being leveraged, especially in seed/angel stage.  That expired for the most part earlier this week, although more credits may come through in the fall.

+Smallest deal was Little Peanut On The Go $7,500 crowdfunding campaign and the three largest deals were LeadPages ($27m), followed by Novu ($20m) + Gravie ($12.5m). Those three alone accounted for 83% of the aggregate, meaning the other 37 companies split remaining ~$12m for a median of $250k.

+6 (15%) listed companies are hardware oriented and the remaining 34 (85%) software.  14 (35%) companies sell predominantly to consumers while 26 (65%) are more enterprise and/or B2B.  The healthtech cluster attracted the most capital this quarter overall.

+MNvest intrastate equity crowdfunding became law so tech firms can advertise their fundraise ($2m cap) and accept money from non-accredited local investors.  But not so fast says Minnesota’s Department of Commerce, the chief state securities regulator, ‘we’ll get to implementation when it’s convenient’.

+On the investors side of the table —  Brightstone Venture Capital bumped up $15m and Invenshure raised the bar to a $50m target for their next fund.  Twin Cities Angels is also on its way to another fund (3) while Matchstick Ventures (formerly Confluence Capital) gets due credit credit for going in early.

+Entrepreneurs Nadya Nguyen and Dori Graff spoke at Startup School Femtech on relevant topics of crowdfunding, bootstrapping and fundraising.

+Corporate manager by day, angel investor by night Tim Huebsch shares his motives and experiences putting his own money out there.

+Piranha Pool packs the house at Minnebar to watch entrepreneurs live pitch investors.

+Playtabase gets more cash from another incubator.

+Proto Labs doesn’t have a formal venture arm yet, although open the notion.

+Key open rounds rolling over from Q2 may include OneOme, Foodsby, MAX4G, PetChatz and CareQuo.

Here’s the hard data for Q2 2015:

Did we miss something or do you have a question? Comment below…

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