Gopher Angels, the Minnesota association of affluent investors, has crossed $11M invested in “high-potential” startup companies in the state since its inception four years ago. Gopher Angels also plans the first Midwest regional conference of the Angel Capital Association on Sept. 22. More information: www.angelcapitalassociation.org/midwest.
“Investment by our members, who include family offices, funds…as well as individual accredited investors, is critical in helping early stage companies hit those key milestones for more growth, more employees, and more capital,” said David Russick, managing director of Gopher Angels. In 2016, Gopher Angels members made new or continuing investments in firms such as Oculogica, Preceptis Medical, Stemonix and Advanced Cooling Technology; companies investors hope will be the next Proto Labs, if not 3M.
Gopher Angel investors also serve on boards, advise on issues and talent and attract other investors.
“Our technology, people and capital have now come to us from many sources,” said CEO Ping Yeh of Stemonix. “There’s no question of the key role that Gopher Angels and its investors played as very early funders and very active advocates.”
The Minnesota angel investment tax credit, also has proven a big break for investors in start-up companies, thanks to a 25 percent annual tax credit of up to $250,000 per family. A late 2015 state report said the program created 579 jobs between its 2010 inception and 2014. That cost Minnesota taxpayers $60 million, or more than $100,000 per job.
The money comes from wealthy investors from Minnesota and elsewhere who mitigate some of their risk thanks to Minnesota taxpayers. The program is capped at about $15 million in tax credit annually and requires recipient companies to meet certain job-and-wage goals.
Critics say good ideas will get funded, without subsidy.
Supporters say the program has wide benefits, keeps local ideas from being lured to other states that have similar incentives, and should be renewed by the 2017 legislature. Several dozen firms, including BiteSquad, Vidku and 75F last year, have been funded by angel investors.