Supporters of small business are raising up to $20 million to launch publicly traded Hill Capital Corp., housed at the James J. Hill Center in St. Paul.
Hill Capital will invest in promising Upper Midwest concerns in the territory from which the railroad baron launched his empire.
This interesting development springs from the transformation of the business library that Hill built into more of a 21st-century resource for entrepreneurs. The Hill Center houses rent-paying Hill Capital, which was seeded last year with $200,000 by founding shareholders, including the Hill Center.
Hill Capital CEO Patrick Donohue is meeting with prospective investors in the Twin Cities and Upper Midwest. Donohue, a veteran securities analyst who has worked in recent years with small business and alternative financing methods, was recruited to Hill Capital by board chairman Kevin Spreng, a business lawyer at Fredrikson & Byron. He has worked for years with venture capitalists and small businesses.
Hill Capital will focus on loans and preferred stock in amounts that range from $100,000 to $1 million in promising private companies of up to $25 million in revenue that have a “capital gap” between bank credit and owner’s equity to buy the piece of equipment or other investment necessary to take revenue to the next level.
These businesses have the toughest time raising economical growth capital, according to the Minnesota Chamber of Commerce and the Minnesota Department of Employment and Economic Development, which often works with small businesses on financing and export issues.
Hill Capital expects to be doing business by 2017.
The offering circular and more information: www.hillcapitalcorp.com.
Northeast microbrew co-op gets industry notice
Fair State Brewing Cooperative of northeast Minneapolis is an interesting venture in the hopping craft brewing industry of at least 100 Minnesota microbreweries.
A few weeks ago, the industry site RateBeer.com named 3-year-old Fair State one of the top 10 new breweries in the world.
Fair State also is an interesting business proposition. It was established by three founders as the sole cooperative brewery in Minnesota. It’s owned by a growing list of 700 who paid $200 apiece. That raises inexpensive capital as well as produces 700 loyal marketers with skin in the game for a fast-growing operation that employs 12.
“I was home brewing before I was legally able to drink,” said Fair State CEO Evan Sallee, 31, also a Northwestern University-minted lawyer. He joined with two other college friends and beer nuts to start Fair State in 2012.
“None of us come from money and I’m still drowning in student-loan debt,” said Sallee, who supplements his $40,000 salary with a few hours a week of legal work for other brewers through a boutique law firm. “I summered at a big law firm. I looked at the life of the [corporate] lawyer and fast-forwarded 25 years and, even though I was sitting on a couple hundred thousand in debt, it seemed more a risk to not try the brewery thing.”
Sallee and co-founders Niko Tonks, the head brewer, and Matt Hauck, operations director, started musing over beer at a cooperatively owned microbrewery in Austin, Texas, in 2011. The beer talk of 2011 became business planning by 2012.
“We were really attracted to the co-op model as a way for people to get involved in the business of beer without starting their own brewery,” Sallee said. “The RateBeer.com award is humbling … and we’re excited to play a role in putting Minnesota craft beer on the world stage.”
For now, the stage is an often-crowded taproom and brewery at 2506 Central Av., the born-again main commercial artery of Northeast.
Central boasts a growing number of ethnic restaurants, bakeries, bike shops, coffee shops and food companies, as well as banks, hardware stores and other commercial staples. Many customers bring in food from a neighboring eatery to enjoy at Fair State with German-style beers.
Sallee & Co. raised nearly $1 million in equity, including early-stage shareholders, and debt to get the operation up and rolling. He said Fair State has generated positive cash flow since the outset.
The beer is sold for $5 a glass at the taproom, other establishments and select liquor stores. High-quality offerings brewed in wooden kegs are sold in wine-size bottles for up to $20. The motto is “Drink like you own the place,” a nod to the numerous owners, pictured on the saloon wall.
Fair State will hit its 2,000-barrel capacity this year. Management is planning a yet-to-be announced production expansion at a remote location.
EDF plans large wind farm in SW Minnesota
EDF Renewable Energy Inc. is proposing to build a large wind farm on 35,000 acres in Lincoln and Lyon counties in southwestern Minnesota.
The proposed Red Pine Wind Project between Ivanhoe and Marshall would generate 200 megawatts, said a filing with the Minnesota Public Utilities Commission. A megawatt is 1 million watts.
EDF said it would sell the electricity to one or more still-undetermined buyers, and it expects pricing around 3 cents per kilowatt hour.
EDF is a unit of the French power company EDF Group, based in Paris. It has an office in Minneapolis and has built 10 wind projects in Minnesota under its former name EnXco.
Two EDF wind farms are tied as the state’s largest — the Fenton Wind Power Project in Murray and Nobles counties finished in 2007 and the Lakefield Wind Farm in Jackson County finished in 2011. Each is rated at 205 megawatts from 137 turbines, according to state data.
Investing with soul by Katherine Collins
More than a few portfolio managers will be in attendance at 7 p.m. Thursday at St. Philip the Deacon Lutheran Church in Plymouth to hear Katherine Collins. She walked away from a successful investing career at huge Fidelity Investments to volunteer and study nature and theology.
The result is an investment approach she believes is more “resilient” and “regenerative.”
Collins, the CEO of Honeybee Capital, is the author of “The Nature of Investing: Resilient Investment Strategies Through Biomimicry.” She says Honeybee is dedicated to “pollinating ideas across varied fields in pursuit of optimal investment decisionmaking.”
The event is free and open to the public.
MHTA annual tech conference Thursday
The Minnesota High Tech Association will explore subjects from supporting a mobile workforce to branding and recent technological breakthroughs at its annual Tech.2016 conference Thursday at the Metropolitan Ballroom in Golden Valley.
The fifth annual event will involve 200 entrepreneurs, investors and professionals for a morning-long session that will include speakers such as CEO Mynul Khan of Field Nation, which raised $30 million in 2015, and CEO Jonathan Pearce of Zipnosis, which works with clinics on “virtual” office visits. Sameena Shah, director of research at Thomson Reuters, will discuss artificial intelligence. More information: www.mhta.org.