Minnesota Angel Network trying to fill the gap in early stage investment

Anyone trying to start a company and raise money has heard of the valley of […]

Anyone trying to start a company and raise money has heard of the valley of death, and there are a multitude of efforts nationwide to bridge that gap between the need for early stage capital and its availability.

In Minnesota, the Minnesota Angel Network (MNAN) is trying to do its part in helping connect fledgling companies with capital. The group, which was formed last August, functions as much as an accelerator for young companies as it does as a screening tool for angel investors. The goal is to select worthy startups looking to raise between $50,000 and $4.5 million, and put them through an educational program that will fill the holes in their business plans and get them ready to face the big, bad world of fundraising.

The group recently announced that 24 companies have been selected to undergo the program, but declined to name them citing federal regulations against companies promoting their fundraising activity. Six companies have already received the group’s certification and three of them have received angel funding in the four months that the report spans.

“Nationally, only one company out of 10 is successful in achieving funding, and in the current seed and angel funding environment it normally takes six months or more to do so.” the report said.

The group projects that if all 24 companies get the full funding they are seeking, then MNAN will have facilitated $32 million worth of angel investment. And those companies in turn project that if they received full funding, then a cumulative 290 jobs will be created by the end of 2013.

It’s a little early for such projections for an economic development effort like this one, and the group seems to be aware of it.

“Although we are very encouraged by the funding success achieved by MNAN certified companies in four months, it is still too early to predict the funding success rate of MNAN companies,” the report read.

 

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