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Heard on the Street: RAEDI to launch new angel investment fund

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Gary Smith
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Rochester Area Economic Development Inc.is ready to unveil a new angel investment fund to support start-up firms.

RAEDI plans to officially roll out its new Southeast Minnesota Capital Fundwith an event at the Mayo Clinic Business Acceleratoron Tuesday morning.

RAEDI President Gary Smithhas been talking about creating this fund for a couple years.

"This is a private equity fund that we can use to leverage other funds," such as the Southern Minnesota Initiative Foundation's fund, he said in 2015.

In October 2016, the new $1 million angel investment fund was described as being about 70 percent funded. The hope then was to have it fully funded by the end of 2016.

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Now the Southeast Minnesota Capital Fund is ready for launch.

It is funded by a group of 25 angel investors. The fund is described as being focused on "the growing number of start-up companies in the medical and technology fields."

Investments can be made in companies based anyway, but "the primary investment focus of the fund will be the southeast Minnesota region."

David Herbert, the president and CEO of Rochester's 46 North LLC, will speak at Tuesday's roll-out why he decided on becoming an angel investor in the new fund. Herbert worked in business development at Mayo Clinic for 21 years before starting his own business in 2015. He also is a senior adviser for Genticure,based in Minneapolis.

Al Berning , the CEO of Ambient Clinical Analytics in Rochester, also talked at the event about the importance of funds such as the Southeast Minnesota Capital Fund. Berning is known in Rochester as a former IBMexecutive, a co-founder of Pemstar and former CEO of Hardcore Computing, now known as LiquidCool Solutions. He also has worked closely with Mayo Clinic.

"Angel investors are typically one of the first sources of funding for innovative start-ups. And these start-ups may be tomorrow's large employers of the region. There are numerous angel funds in the metro area, but this is the first one here," stated RAEDI's Xavier Frigola, the secretary and treasurer of the new fund.

Looking back to 2016, RAEDI used its existing development fund to finance 11 businesses with $1.35 million and that, in turn, spurred the creation of 57 local jobs.

The businesses that were funded included Ambient Clinical Analytics, Geneticure, LiquidCool Solutions, HB Healthcare Safety, Hunhu Healthcare, Imanis Life Sciences, LAgen Laboratories, ReGen Theranostics, Sonex Health, Xcede Technologiesand GoRout.

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