A number of Twin Cities tech companies are growing in a good economy, executives said last week at the annual “Venture” conference of the Minnesota High Technology Association (MHTA).

Moreover, recent sales of several firms, such as Jamf, SportsEngine, GovDelivery and others, at buoyant prices in a sellers’ market, as well as recent and planned stock offerings, are fueling more growth for med-tech, software and other outfits.

“Ring the bell and stamp the feet,” said Michael Gorman, longtime managing director of venture capital firm Split Rock Partners, whose firm has been an owner of a few winners. “We should be thrilled. That capital will recycle its way through young [entrepreneurs] who will do it again and again.”

Not all is perfect. There are growing pains and grumbling in the employer ranks about everything from looming shortages of skilled workers to the recent loss of the popular Minnesota tax credit for “angel” investors, individuals who invest money in startup companies.

Lee Jones, a 30-plus year veteran engineer who worked at Medtronic, is on her second startup, Rebiotix. It is going through the tedious, yearslong FDA approval process to commercialization.

“This can be a long haul,” she said, noting that it is the rare entrepreneur who can go from nothing to $100 million or more in revenue in several years.

Yet growth capital, good products and market success is fueling a growing tech hub.

“We love it here,” said Matt Matsui, senior vice president of products and strategy at Calabrio, the fast-growing software firm of 400-plus people, that focuses on call center and workforce-management products. “The workforce is excellent. We’re growing and we’re getting a lot of things right.’’

Clay Collins, founder of Leadpages, a six-year-old firm that creates software to help businesses increase revenue from digital marketing, said it’s an advantage to be in the Twin Cities. Good outfits get investment capital “at Silicon Valley” valuations. The money goes further in lower-cost Midwest.

“It’s kind of an arbitrage play,” Collins quipped. “And we cherry-pick talent from larger companies.”

Big technology and other complexes in the area long have proved to be spawning grounds for employees who try something new.

“I think people are bullish on the way things are going for growing a business in Minnesota,” said CEO Margaret Anderson Kelliher of the MHTA. “There’s always lessons learned … and not everybody expects to become a 3M.

“But you have a lot of firms who are shooting to be best in class in Minnesota in bio-tech, medical IT and software. And world class.”

Chip Pearson, a founder of Jamf software, Greg Wallace, the CFO of tech company When I Work and accounting firm CliftonLarsonAllen, recently estimated that there has been more than $7 billion in sale proceeds since the Great Recession from the sale of two dozen-plus tech firms.

In fact, earlier this month, Vista Equity Partners, one of the world’s biggest private equity owners of tech firms, bought majority control of Jamf, a provider of management tools for Apple products.

And there have been many other deals that have ranged from $100 million to $1 billion or more.

Pearson, a veteran entrepreneur, doesn’t expect to start another company. He told the Star Tribune’s Lee Schafer in a recent column that he intends to help the Twin Cities tech sector grow markedly over the next decade by recruiting other successful founders to mentor young entrepreneurs.

That’s the spirit, exclaimed by Gorman and CEO Joe Payne of Code42, another fast-growing software firm.

Those who do well, are encouraged to reinvest in business. As well as community.

It brings to mind Phil Soran, a founder of the former Xiotech and Compellent, going back 20 years. They were acquired for nearly $1.4 billion. Soran subsequently invested in another tech firm that he helped start in 2015, Flipgrid. He also is an education philanthropist.

CEO Chris Heim of software firm HelpSystems, another fast grower, is a veteran of several technology companies. He preached again last week that enhanced results lie in a good product, and employees motivated by shared ownership, a great place to work and access to results.

Payne, 52, joined Code42 in 2015. He has worked for big companies and small and also took a Virginia software firm public several years ago, before its eventual sale. Payne thinks Code42, with 525 employees and a projected $100 million in revenue this year, will be a good candidate for the public markets at around $150 million in revenue within a couple of years.

Payne told the MHTA audience that he’s learned to spread stock ownership within the company, and also started a company foundation. The idea is to get people thinking like owners and community stewards. This is important for a healthy culture.

When the public offering or other sale occurs, some insiders will use some of their newfound wealth to invest in new ventures and community.

“These things are important,” Payne said in a talk with other owners and investors. “Set them up early.”

Kelliher called it perpetuating the virtuous circle.


Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.