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.
Seed Capital - Local & State
701 Angel Fund
The FM Angel Investment Fund had been the Fargo Moorhead’s primary angel investment fund over the past decade, looking for equity investment opportunities in early to mid-stage private companies in North Dakota or Minnesota, that operate in the manufacturing or technology sector with high growth potential. With this fund currently fully funded, the 701 Angel Fund was established in 2015 to attract capital and startup investments. The 701 Angel Fund invests in determined entrepreneurs and high-growth opportunities. The fund works with other regional investors to maximize the exit potential of our 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.
Gen7 Investments was formed in 2017 out of Forum Communications. Gen7 consists primarily of a portfolio featuring consumer goods, media companies, and brand agencies. Their investments are often made to help strong companies grow and/or assist in a transition of company acquisition.
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.
Northern Plains Fund
Northern Plains Fund was formed in 2019 and is a geographic-based fund that focuses on seed and early-stage companies located in the Northern Plains. The fund is not limited to any specific type of companies, but is seeking those with emphasis in the following industries: Agriculture Technology, Technology, Financial Technology, Manufacturing, E-Commerce, Healthcare and Biosciences.
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.
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.
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. Recent new relationships include partners like M25 and Venn Foundation. In addition, North Dakota State University is in the midst of creating a fund (Pathway Ventures) much like the above-mentioned DVG. Launch Minnesota also has a nice directory of Minnesota investors.
Equity crowdfunding continues to increase in popularity and success, and the fundraising limits were recently expanded. Some of the nationally-leading platforms include Wefunder, Republic and StartEngine; and regionally there is Silicon Prairie Portal & Exchange.
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
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.
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 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 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.