Capital

Compared to many big cities, it’s easy to connect to folks who can help you, whether it’s access to capital, advice or to influence legislative change. In addition, angels that invest in local companies benefit from income tax credits in both Minnesota and North Dakota, helping to mitigate the risk that is inherent in investing in startups. Below are a number of funding sources that we are connected to or can make connections to.

Seed Capital - Local & State

701 Fund

The 701 Fund was established in 2015 to attract capital and startup investments.  The 701 Fund invests in determined entrepreneurs and high-growth opportunities.  The fund works with other regional investors to maximize the exit potential of the start-up investments.  The fund is certified as a North Dakota Angel Fund by the ND Tax Department and is a Certified Angel Fund for the Minnesota Angel Tax Credit. The first fund has been fully utilized, but Fund 2 ($5 million) was raised in early 2022.

Hill Capital

St.Paul-based Hill Capital‘s approach is to both fund and support entrepreneurs in our region. They look to provide your company with capital and community without taking away the autonomy to run your business.  See their website for their investment criteria.

Dakota Venture Group

The Dakota Venture Group (DVG) is a University of North Dakota student-run venture capital investment fund, founded in 2006.  DVG manages multiple funds and utilizes a vast network of industry expertise in its due diligence research and investment decision making.

Great North Ventures

Based in St. Cloud, Great North Ventures was founded by  successful early stage tech investors and entrepreneurs. Their goals include cultivating the next generation of leading tech companies in Minnesota and across the upper Midwest. They also look to educate founders and established their Lean Startup School.

Homegrown Capital

Founded in 2021, Homegrown Capital is focused on serving the needs of early stage founders in undercapitalized markets of the Northern Plains. The firm is looking to invest in companies that demonstrate strong scalability, and particularly focuses on the business-to-business software, agriculture technology and financial technology sectors.

Groove Capital

Groove Capital supports small teams with high potential, who have detailed plans for achieving larger, later stage milestones.  They are often the first check in a preseed or seed round. Their fund looks to invest in many industries, and primarily in the Upper Midwest, but will favor the verticals that can be supported by Minnesota’s most robust resource networks; think ag tech, food, healthcare, education, energy, enterprise SaaS, financial services, medical device, retail, and sports & fitness.

Enterprise Institute

The Enterprise Institute is a South Dakota-based entrepreneur development company that creates and administers a network of angel funds. The Enterprise Institute also operates a regional syndicate of early stage financiers (angel investors/funds, venture capital, and family offices) that meet monthly to discuss deal flow and share co-investment opportunities.

M25

M25 is an early-stage venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest.

Pathway Ventures

Pathway Ventures is a new North Dakota State University student-run venture capital investment fund.  This fund is open to many industries and focus on pre-seed or seed rounds that have a lead investor. With this fund being new, currently check sizes are on the smaller side.

North Dakota Growth Fund

The North Dakota Growth Fund (“NDGF”) is a $100 million multi-stage investment fund that will seek to invest in North Dakota businesses and entrepreneurs. NDGF was created (in mid 2021) to further advance innovation and private markets investments in North Dakota by seeking investments that provide strong risk-adjusted returns and support the growing entrepreneurial ecosystem in the State. NDGF will do this by making targeted investments with venture capital, private credit (including venture debt), private equity, growth equity, infrastructure and real assets opportunities with a nexus to the State of North Dakota.

Additional Funding Sources & FYIs

Other funding sources continue to develop, evolve and/or focus their attention on our region.  Our organization looks to cultivate relationships with these funds to help facilitate potential deal flow for them – some are linked on this website and some choose to remain more private. Launch Minnesota also has a nice directory of Minnesota investors.

Equity and debt crowdfunding continues to increase in popularity and success, and the equity fundraising limits were recently expanded. Some of the nationally-leading equity platforms include Wefunder (also debt options), Republic and StartEngine; and regionally there is Silicon Prairie Portal & Exchange. There are various debt platforms, with various ways of lending (for ex. revenue-sharing model), such as Honeycomb Credit, Mainvest and Kiva.

Preparing yourself to raise private funding (pitch, structure, legal, etc.) and connecting to potential funders takes time, planning and outreach. Here are several links to articles, videos, etc. in case helpful for your learning.
Fundraise Faster videos
Demystifying Angel Investing recorded webinar
A Guide To Startup Valuation
The 7 Secret Ingredients To A Successful Equity Crowdfunding Campaign
The Pros And Cons Of Startup Crowdfunding

Innovate ND

New startups in North Dakota may apply for Innovate ND which not only provides opportunities for entrepreneurial assistance and mentorship, but also enables the startups to access up to $40,000 in funds through a combination of reimbursements and grants.

 

Launch Minnesota

Innovative and scalable technology businesses in Minnesota may apply for Launch  Minnesota grants for business operation expenses (max. $35,000 match), housing/childcare expenses (max. $7,500 match), and SBIR-STTR Phase 2 (max. $50,000).

 

Minnesota Cup

Minnesota has also hosted the annual Minnesota Cup since 2005. This is a competition that identifies and rewards aspiring entrepreneurs with breakthrough ideas in Minnesota. Entrepreneurs from all industries and all corners of the state are invited to participate. Up to $50,000 and valuable professional services are presented to the overall winner as well as winners in several categories.

APUC ND - Agricultural Products Utilization

Agricultural Products Utilization Commission (APUC) is a grant program administered by the ND Department of Agriculture designed to create new wealth and employment opportunities through the development of new and expanded uses of North Dakota’s agricultural products and agriculture equipment. Applicant must commit a minimum match dollar investment of 25% of the total amount requested.

A maximum of 15 qualifying applicants present funding proposals on a quarterly basis for the following grant categories:
• Basic and Applied Research
• Marketing and Utilization
• Farm Diversification
• Technical Assistance
• Nature Based Agri-Tourism
• Prototype Development & Technology

The state legislature has approved an expansion to the APUC program to include Ag. equipment and machinery development (Prototype/Technology and Technical Assistance Grant).

AGRI Value-Added Grant Program (Minnesota)

The AGRI Value-Added Grant helps Minnesota processors add value to Minnesota agricultural products by investing in the purchase of equipment, production capacity, market diversification, and market access for value-added products.



Venture Capital – Local, State & Region

Arthur Ventures

Arthur Ventures is an early stage venture capital firm that invests in business-to-business (B2B) software companies. Arthur Ventures focuses specifically on companies providing software-as-a-service (SaaS) and cloud-enabled tools and services.

 

Linn Grove Ventures

Linn Grove Ventures invests in innovative agriculture, food, health, and animal technologies and the companies transforming these industries at the global level. It is active in providing strategic financing and business leadership to help innovative companies move beyond the business incubator and accelerator phases to the next level of growth.

New Venture Capital Fund

The New Venture Capital Fund’s goal is to stimulate private-sector investment and promote diversification of the economy by supporting a variety of North Dakota startup companies. This fund offers a variety of financing options in the form of traditional or convertible debt and equity investment.  The program is administered by the North Dakota Development Fund.