One of biggest challenges confronting the Midwest’s entrepreneurial and investment community has been the region’s so-called density gap. The expanded scope of the Midwest Growth Capital Symposium, formerly the Michigan Growth Capital Symposium, will help to alleviate that pain point, according to Russ Straate, associate director of the University of Minnesota’s Venture Center.
“The Midwest has some great untapped opportunities for investors and entrepreneurs who are looking to invest their time and money,” he says. “These are not just back-of-the-napkin ideas. Rather, they are real-deal opportunities based on university-centric research projects that have been led by smart inventors and founders, have received significant funding and have been substantiated through peer review.”
The biggest drawback, Straate points out, is that the entrepreneurial and investment community in the Midwest is not geographically dense. In high-density East and West Coast locations such as Boston, San Diego and Silicon Valley, investors and entrepreneurs can view a large number of opportunities and engage ones that best fit their criteria, with limited travel. These high-density environments also foster working synergy between large numbers of investors who can share information and partner on deals.
“We suffer here in the Midwest because we don’t have that same density,” Straate continues. “Events such as the Midwest Growth Capital Symposium help to bridge the density gap for investors and entrepreneurs. At an appropriate time, it might be advantageous for the MGCS to broaden its geographic footprint by rotating to other venues, such as Chicago or Minneapolis. This would bring together regional investors and allow other institutions to get their emerging companies onto the radar screen.”
At last year’s MGCS Tech Transfer Pitch Track, University of Minnesota Technology Commercialization, which oversees the Venture Center, showcased four startup companies with innovations centered on medical devices, lithium-ion battery technology, antimicrobial probiotics and computer software. Since the Venture Center was formed in 2006, it has helped to launch 144 research-based startups at the university, including 12 in 2019.
“We have a very strong ecosystem for medical devices here in the Twin Cities, so the University of Minnesota plays a leading role in bringing out medical-device innovations through startup companies,” Straate explains. “In addition, the university has a significant biopharmaceutical research program, so biopharma is one of the leading sectors for our startups.”
The Venture Center calculates that roughly 26 percent of its startups are working on innovations in biopharma, 27 percent are focused on software IT advances and 19 percent are developing new medical devices. Of the original 144 startups that have come through the Venture Center, all but 25 are still “alive and kicking in some form or other,” according to Straate.
“We are very pleased with our portfolio of startups here at the University of Minnesota,” he says. “We have a really strong survival rate, and we’ve had four exits in the last 18 months. Now we’re starting to see companies formed in 2006 transition to the next stage of development, which is typically marked by acquisition or going public.”