The University of Minnesota announced today that in fiscal 2012 the Office for Technology Commercialization launched a record of 12 startups, up from the previous record set last year at 9. Six years ago the Office’s mission was revamped, and since then a total of 38 companies have rolled out of the U’s campus, 30 of which are still active.
The growth of Minnesota’s startup community has become a recent trend. In 2010, the Minnesota legislature passed the Angel Investor Tax Credit (AITC), which allocated $60 million in credits to be distributed over a five year period. In its first year, which allocated $11 million, the fund was depleted by November.
While the AITC spurrs high income investors to fund fledgling startups, recent crowdfunding efforts through Kickstarter have proven there is interest in the Minnesota tech scene as well. In less than one week, SmartThings, a company “connecting your physical world to the internet,” reached its goal of $250,000 in funding. Eventually, SmartThings would be backed by 5,694 people and raise a total of $1.2 million.
What this means for the Minnesota economy is boundless. Being able to keep entrepreneurs and technology professionals in the state would be an obvious advantage. Too many times young professionals in the technology industry move to coastal havens where they see better prospects, but with legislation and education fueling entrepreneurial growth, and showing that we can also compete, is huge for retaining talent.
Already there are talks about allocating more money towards the AITC. They are running out of credits quickly, which means there is demand for serious growth in a sector that’s proving very useful. It will be exciting to see what happens in the coming months and years. With the JOBS Act there is even more potential for a young company to get off its feet, and seeing what companies arise in Minnesota from crowdfunding, seed capital and angel investment will be an exciting ride.