Last year the state shelled out $7 million in tax credits to wealthy investors who put money into Minnesota start-ups.

This week the state reported the initial payoff: 47 jobs.

Officials said the Minnesota angel tax credit program is a long-term investment, and they cautioned that it's too early to tell whether it will meet its objectives of helping entrepreneurs and creating jobs.

"It's nice that 47 jobs were created, but 47 jobs aren't very many jobs for a state as big as Minnesota," state economist Tom Stinson said. "What we hope to see is some of these entrepreneurs really catch fire, grow substantially and become employers of 50 people or 100 people. Of course that's not going to happen in six months."

The program launched last summer, giving qualified angel investors a 25 percent tax credit if they gave at least $10,000 to a registered Minnesota start-up. Tax credits were also given to qualified investment funds, though under different terms.

Minneapolis-based OrthoCor Medical raised $753,000 under the program last year, helping it add four employees, bringing its staff to nine people. The company's product is a device that wraps around the knee, providing relief from arthritis and joint pains.

"If we didn't have the money, we couldn't hire the people," said John Dinusson, CEO and president. "It helped a lot."

Investors under the program placed more than $28 million into 67 Minnesota start-ups, according to the report by the Department of Employment and Economic Development.

Most of the companies benefiting were in the Twin Cities, with only six in outstates Minnesota. The department said that's a concern, and it is working on increasing participation in outstate Minnesota from companies and investors.

Stinson said that three to five years from now, there will be enough data compiled to evaluate the program.

"This is very high-risk investing," Stinson said. "Hopefully there will be some big winners. That's really what we need to see."

Wendy Lee • 612-673-1712