Angel investors spent more than $28.8 million in funding 65 Minnesota start-ups last year under the state's angel investment tax credit program.

The data, which was released yesterday by the Minnesota Department of Employment and Economic Development (DEED), is not a final tally for 2010, but shows the success of the program's first year, analysts said. Proponents pushed for the angel tax credit as a way of gaining more investment for start-ups and keeping them in Minnesota.

Some Minnesota companies called the program extremely beneficial, saying it helped them secure needed investment dollars as other sources of start-up capital have dried up.

"It gives everyone in Minnesota a chance to seek and raise those funds that are so hard to raise right now," said Robert Dahl, who is developing a Napa Valley-style winery and deli called Medina Vineyards Circa 1886 in Medina, Minnesota.

"We weren't able to raise a single dime until the angel tax credit became available," Dahl said.

DEED said it is continuing to review paperwork on other transactions that may raise the amount of investments made and credits given to investors last year. The most recent data available shows that $7.2 million in tax credits of the available $11 million in tax credits available in 2010 were approved under the program.

But not all Minnesota start-ups have registered to participate in the angel investment tax program.

Michael Russin, vice president of sales and marketing for medical device company Diabetes Sentry, said he would sign up for the program if a potential investor wanted him to. Diabetes Sentry is trying to raise $250,000.

"I just haven't had any one that I sat and talked with, that said, 'Wow, if you register the company, I'm in,'" Russin said. Dahl said he raised $100,000, thanks to the tax credit.

The state's angel investment tax credit program began for the first time in 2010. The incentive, which applies to a minimum of $10,000 from angel investors and $30,000 from funds, offers a 25 percent tax credit for investments in start-ups and emerging businesses.