St. Anthony: Three generations of entrepreneurs

David Cleveland, 81, the retired Minneapolis community banker and successful entrepreneur, helped his son, Brad Cleveland, invest in a start-up called Proto Labs in 2001 that became one of Minnesota's best-performing publicly held companies of the last generation.

Brad Cleveland took Proto Labs from a tiny private firm to a globe-spanning public company worth $2 billion when he stepped down as CEO last winter.

Now, in this Minnesota family's latest chapter in entrepreneurship, Brad Cleveland, 54, is helping his son start a business.

"I started with nothing and thanks to my dad, I was able to invest and run a business," said Brad Cleveland, whose son John has opened a hybrid and plug-in vehicle repair shop. "John is getting his chance."

In the Cleveland family, the gift from one generation to the next isn't just in dollars. It's also about encouraging a new generation to take risks, build businesses and give back to the community some of the fruits of success.

"I just feel incredibly fortunate," said Brad Cleveland, who with his father and son talked about the family's tradition of entrepreneurship.

The first chapter in this success story began in 1973, when Dave Cleveland, who started with the former First Bank in South Dakota, was lured by a newspaper ad that said: "Are you a vice president who thinks he ought to be a bank president?"

He and other shareholders sold the small-business lender to Associated Bancorp for nearly $100 million in stock in 1999. Dave and Carolyn Cleveland are now known as philanthropists and the founding patrons of the Minnesota Cup entrepreneurial sweepstakes.

Brad Cleveland earned a master's degree in computer science from the University of Minnesota and worked for other businesses before striking out on his own. He was running a research subsidiary for a local corporation in 2001, when he responded to a newspaper ad: "If you are a no-B.S. person, apply here!"

He was hired as CEO at fledgling Proto Labs by founder Larry Lukis. The Internet-enabled, quick-turn parts-and-mold maker grew from $1 million in sales in 2001 to $163 million and $35 million in profit. Lukis was the inventor. The calm, analytical Cleveland built and ran the organization. Proto Labs grew to three Twin Cities-area plants and 750 Minnesota employees.

Cleveland concluded a year ago that he didn't know how or want to take Proto Labs to $1 billion in sales. Besides, it was time for the next act.

His investment of $600,000 in borrowed money in Proto Labs grew to nearly $100 million. He lives a comfortable life, including a nice house, a cabin, travel and a few cars. Brad Cleveland and his wife, Pat, donate to health care and charitable causes and fund a college-entrepreneur competition.

But he isn't finished with the world of business.

"We're just enjoying life, our foundation, starting new businesses … and that's about as far as we've gone," Cleveland said.

Brad and Pat Cleveland's two adult children have trust funds, controlled by their parents. But they still must work.

John Cleveland, 29, Brad's son, just started a business with a little help from dad. A University of Wisconsin economics graduate, John Cleveland also is a Dunwoody College-trained car mechanic.

With a lifelong love of vehicles, he worked as mechanic for a couple car dealers before striking out on his own this year. Then he borrowed $350,000 against his trust fund to outfit and open Carspec, a repair shop focused on hybrid and plug-in electric cars.

Brad Cleveland chuckled, remembering the stressful days at Proto Labs when there was too little work. The risk to John Cleveland is that if he loses his investment, his dad is not replacing the money. Dave and Brad Cleveland had the same deal when Brad borrowed from his trust fund for Proto Labs.

Carspec is located in a 13,000-square foot Eden Prairie building that Brad acquired for $1.1 million earlier this year.

In the other half of the building, Brad Cleveland is financing "Activated Research," a fuel cell technology research lab headed by Cleveland and his partner, Andrew Jones.

Jones, 27, earned a doctorate in chemical engineering at the University of California, Berkeley. Cleveland mentored Jones when he was an undergraduate at the University of Minnesota.

"It's a 50-50 partnership," Cleveland said. "He does the work and I pay the bills."

Brad Cleveland's 25-year-old daughter, Kristen, works for a photography school in Washington, D.C. However, she just informed her boss that she's resigning to relocate to Seattle to start her own studio and photography-marketing business, her father said.

Brad Cleveland wears a Proto Labs cap to cover the effects on his scalp from the latest surgery and radiation treatment.

"I've been dealing with these health issues for about 25 years," Cleveland said. "Nothing focuses your attention on near-term achievements like a potentially life-threatening illness.

"I keep recovering. I feel so fortunate."