The 2017 Minnesota Tech Welfare Watch Halftime Report


In January this year, we began tracking a new metric associated with Minnesota’s technology industry: public handouts for private business benefit, aka corporate welfare.

This foray was respected by some and questioned by others — though most have exercised their Minnesota nice by just keeping quiet.

We took this measure to provide transparency into who or what is receiving financial benefit from the government at the expense of taxpayers. So, in addition to the M&A Halftime Report and the forthcoming Fundraising Halftime Report, this is the Welfare Watch Halftime Report.

+ Perhaps the biggest corporate welfare case in Minnesota this year already is the $34 million dollars that will be handed out to implement broadband in rural parts of the state where there is not sufficient demand and/or sensible economics to support it.  40+ telcos will received from anywhere from $25,000 on up into the millions of direct financial subsidy.   And $34m is jut a fraction of what lobbying organizations such as Minnesota’s High Tech Association sought to capture from taxpayer in this legislative session, at an ask of $100m per year.  (see: Not The Onion: Minnesotans Moving To Rural Areas Surprised By Lack Of Internet -or- Minnesota’s Lake County Looks For Exit On Broadband Project)

+ A comparably sized Minnesota welfare case involves DigiKey in Thief River Falls, Minnesota. This company generates approximately $1.5 billion dollars a year in sales and has the audacity to ask for financial subsidies paid by the people. Throughout the 2017 legislative season, they quietly persuaded public officials into carving out a package worth an estimated $30-$40m by the time it’s said and done.

+ Moving on down the line, the now defunct Line Media received unknown quantities of welfare over the years before they died in February.  This digital publishing company was/is privately owned by Michigander Brian Boyle and living off welfare for some time, funded by public agencies to promote an agenda. In another era, this could be considered propaganda?

+ What will the wide world or welfare look like without the angel investor tax credit? Well, we’re all about to find out come 2018 when the $100m+ that was doled out over the past seven years evaporates.  Meanwhile, the program lives on throughout end of 2017 and while these specific companies are not directly receiving welfare, their unnamed investors are benefactors (and also shielded from public identity).

CareQuo  – 37,500
IrriGreen – 25,000
Kidizen  – 229,000
Kipsu – 92,500
MOTI Sports – 20,000
Portfolio Strategy Solutions – 25,000
Securonet – 2,500

Backsafe Inc – $4,000
75F – $75,000
Branch Messenger, Inc. – $230,000
DOSE Health – $7,500
Fideliquest, LLC – $6,250
Chromatic 3D Materials Inc – $6,250
Clerc Software LLC – $6,250
ClickSWITCH Holdings Inc – $118,000
Integrated Governance Solutions, LLC – $2,500
LogicStream Health, Inc. – $449,000
Mallbooster, LLC – $40,000
MetaLogics Corporation – $102,000
Playtabase, LLC – $18,000
Protocol 46, Inc. – $76,000
Protoduction Inc – $42,000
Sansoro Health, LLC – $128,000
Sportsdigita, LLC – $69,000
Tinket, Inc. – $413,000
Visyn, Inc. – $18,000

Also, specifically:

+ Aster Labs in St. Pau seems to have accumulated at least  $600k in federal handouts to develop IoT novel solutions.

+ Andamio Games received $728k in SBIR funding in March to make video games.

+ Some unkowns on the list include: Enterprise Rising Conference – owner Casey Allen declined to disclose the amount received from SciTechSperience, a publicly funded initiative.  Separately, IT Ready received money from the city, possibly elsewhere, to provide subsidized employment training for businesses unwilling to pay for it themselves.

+ We’re probably missing some since this isn’t currently a super proactive pursuit, more of a passive tally for now. Here’s a YTD archive, so feel free to leave a comment if you also believe in transparency around who financially benefits from your taxes: