The results are in for the state's Angel Investor Tax Credit program, passed last April and launched in July of 2010.
The Department of Employment and Economic Development (DEED) delivered its report to the legislature on March 15. (The 16-page report and some of its contents are
linked at the bottom of this page.)
In the last six months of the year, the program drew in $28 million in investment to 67 Minnesota small businesses (those not more than 10 years old and with fewer than 25 employees, among other qualification requirements).
Eleven separate businesses received $1 million or more through the program, including Cachet Financial Solutions, the only company to bring in more than $2 million.
The investments came from 258 certified individuals, who received approximately $7 million in Small Business Investment Tax Credits.
That amount is $4 million shy of the $11 million available for 2010--a remainder that will roll into 2011, totaling $16 million for the current year, according to DEED's Jeff Nelson.
Nelson said that activity accelerated toward the end of the last year,
as the program picked up speed. That momentum is expected to continue,
aided in part by the new
Minnesota Angel Network, launched earlier this year.
No surprise: medical devices and equipment, software, and biotechnology accounted for more than half of the industries and businesses receiving investments, with clean technology close behind. In terms of total investment amount, biotech barely led the field:
Biotech: $5,683,000
Medical devices and equipment: $5,362,484
Software: $5,320,753
Clean tech: $4,281,002
Only six of the 67 businesses receiving investment were outside the Twin Cities metro area, a point of concern noted and addressed in the report.
Monte Hanson, DEED spokesperson, noted that more than a quarter of investors were from out of state--an aspect that differs from other states' angel-investment programs. Non-Minnesota investors receive a direct refundable credit from the state--an opportunity that encourages out-of-state participation, says Hanson.
Sources: Jeff Nelson and Monte Hanson, Department of Employment and Economic Development
Writer: Jeremy Stratton