ADVERTISEMENT

ADVERTISEMENT

New 'angel' investment launching to give local startups a boost

Southeast Minnesota Capital Fund, LLC announced on Feb. 15 that it is creating Southeast Minnesota Capital Fund II, “a new angel investment fund aimed at providing equity capital to innovative, high potential Minnesota start-ups.”

Heard Around Rochester - Jeff Kiger.png
We are part of The Trust Project.

ROCHESTER — A second "angel" fund with the goal of raising $3 million to $5 million to invest in Minnesota startups, is being launched in Rochester.

Southeast Minnesota Capital Fund, LLC announced on Feb. 15 that it is creating Southeast Minnesota Capital Fund II, “a new angel investment fund aimed at providing equity capital to innovative, high potential Minnesota start-ups.”

This follows the path made by SMCF Fund I , which was formed by Rochester Area Economic Development, Inc. and funded by local Rochester-area investors, in 2017.

It has invested almost $2 million in 14 Minnesota companies. Ten of the companies that received funding are either located in the Rochester area or based on technologies developed here.

The plan for the SMCF Fund II to raise by $3 million to $5 million from up to 100 investors by the end of second quarter of 2022.

ADVERTISEMENT

“While we invest with the objective of earning high returns, our capital helps local entrepreneurs build great new businesses in Rochester and SE Minnesota broadly. Raising start-up capital for a new business is very challenging,” said board chair Leigh Johnson.

Also Read
Minneapolis-based Kraus-Anderson filed plans this week for an 88,500-square-foot retail center to be built on the corner of Rochester's Commerce Drive Northwest and Scott Road Northwest. The site development plan filed with the city lists the project's title as “Cub Foods - Commerce Drive.”
Jennifer Cuizapa is cooking up a new 1,323-square-foot sweet spot to be called Bombon in the Century Business Plaza building at 2571 Clare Lane NE. That’s a space not far from Century High School.
Dr. Elaine and Nick Stageberg's Black Swan Living housing firm has been growing dramatically in the last few years. In 2022, they more than doubled their rental units in Rochester and Byron with the expectation of ending the year with 970 local units under their ownership and management.

This new fund is expected to also mostly invest in companies that “given the local presence of Mayo Clinic, operate in health care and the life sciences,” although it will not be limited to that type of business.

SMCF Fund I has invested in Vyriad , the oncolytic virology company founded by two Mayo Clinic doctors that now employs 70 people. It is based in a new 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, recently retired Mayo Clinic business and financial executives, are serving as SMCF’s fund managers. They also oversee company screening and due diligence.

“After long careers in a large organization like Mayo Clinic, we both really enjoy working with exciting new companies and introducing them to the investors in our fund. Our investors love the passion of the entrepreneurs making funding pitches to SMCF and they also like connecting with each other,” said Herbert in the announcement of Fund II.

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.

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.
What to read next
The 24-year-old woman was transported to Mayo Clinic Hospital-Saint Marys with non-life threatening injuries.
The lake level is expected to be held at 5 feet below normal for five days.
Three of the burglaries occurred on Monday and Tuesday in northeast Rochester.
Minority Owned Business Network offers resources, education and mentorship for minority business owners and aspiring entrepreneurs.