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'Angel' fund passes its $1 million goal

Xavier Frigola, Coordinator Business Accelerator & Enterpreneurial Programming
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A Rochester "angel" funds topped $1 million with Southern Minnesota Initiative Foundation investment.

The new Southeast Minnesota Capital Fund, created by the Rochester Area Economic Development Inc. and the Journey to Growth's Entrepreneurship Committee, announced passing the $1 million mark on Tuesday.

RAEDI's Xavier Frigola says that capital fund now has $1.25 million from 31 investors, including SMIF.

"SMIF has long seen the need for additional equity dollars to help new businesses start and grow here in our region and that is why we created our own equity fund a couple years ago," said SMIF President and CEO Tim Penny in Tuesday's announcement. "We are pleased to now contribute to the Southeast Minnesota Capital Fund and look forward to future opportunities to partner on equity investments."

After being conceived in 2015, the fund was unveiled publicly in August at the Mayo Clinic Business Accelerator. At that point, it had raised $875,000 from 26 investors.


The plan is to support young, startup companies with angel investment in exchange for equity. The fund is open to investing in any kind of company, though they expect to mostly focus on medical and/or technology firms. While not geographically limited, the primary focus of the fund will be the Southeast Minnesota region.

The hope is to invest in about 15 companies in the next three to five years and then watch as seven to 10 of them gain traction to grow income and jobs in southeastern Minnesota.

Frigola says the goal is to invest about $50,000 in each company. Three potential investment candidates are presenting to the fund board tonight, he said.

The fund is still accepting new investors through the end of the year. However, additional investors must be accredited as defined federal securities rules. The investor must have an income of more than $200,000 or a net worth of more than $1 million.

About five additional investors are in the pipeline and could result in an additional $200,000 for the fund, Frigola said.

David Herbert, president and CEO of Rochester's 46 North LLC, is the chair of the fund. Leigh Johnson, the founder of Custom Alarm, is serving as vice chair.


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