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A local 'angel' investment fund is ready to invest after raising $7 million

The Med City-based Southeast Minnesota Capital Fund, LLC, which was formed by Rochester Area Economic Development, Inc., recently announced this week that it has closed fundraising for its second

Downtown Rochester Minnesota
Downtown Rochester on Friday, July 1, 2022.
Joe Ahlquist / Post Bulletin
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ROCHESTER — After raising $7 million, a second Rochester "angel" capital fund is ready to start investing in “high potential Minnesota start-ups.”

The Med City-based Southeast Minnesota Capital Fund, LLC , which was formed by Rochester Area Economic Development, Inc. , recently announced this week that it has closed fundraising for its second fund with a total of $7 million in committed capital.

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That’s $2 million more than was predicted, when the creation of the Southeast Minnesota Capital Fund II was first announced in February.

The strategy for the new fund to follow the path forged by the original fund , which invested about $2 million in 14 Minnesota companies since 2018.

The SMCF II managers hope to invest in 12 to 15 new companies in the next three to four years. They also would like to make five to 10 follow-on investments in companies within the SMCF portfolio.

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SMCF Fund I has invested in local firms, like Vyriad . Vyriad is a quickly growing oncolytic virology company founded by two Mayo Clinic doctors. It is based in a state-of-the-art $9 million headquarters in the Rochester Technology Campus , the former IBM complex, at 3605 U.S. Highway 52 North.

The portfolio of Fund I also includes Ambient Clinical, a medical software company that provides point of care analytical solutions to hospital systems, and Sonex Health, a Mayo Clinic spinoff firm that created and markets an ultrasound-guided surgical device.

David Herbert and Harry Hoffman, who are retired Mayo Clinic business and financial executives, are serving as SMCF’s fund managers. They also oversee company screening and due diligence.

Jeff Kiger tracks business action in Rochester and southeastern Minnesota every day in "Heard on the Street." Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.

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Jeff Kiger writes a daily column, "Heard Around Rochester," in addition to writing articles about local businesses, Mayo Clinic, IBM, Hormel Foods, Crenlo and others. The opinions of my employer do not necessarily reflect my opinions. He has worked in Rochester for the Post Bulletin since 1999. Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.
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