The University of Minnesota is embracing startup culture across disciplines and producing results in the number of founders, tech talent, and startups. One of the top universities in the country with enrollment regularly over 50k, a system-wide endowment of nearly $4B, and over $1B spent annually on research and development, it’s incredibly important for the cultivation of early-stage tech startups in Minnesota and the Upper Midwest. Because of this alignment, Great North Labs engages with the U of M in several ways.
How the U of M is Engaging
John Stavig is a leader in the tech startup community. The managing director of the Gary S. Holmes Center for Entrepreneurship, Stavig teaches entrepreneurship courses and leads the Center. He helped launch one of the first student-run VC funds in the world, Atland Ventures, with David Russick.
Stavig has opened the doors to the Carlson School of Management for events and educational opportunities that benefit both students and startup community members. Great North Labs’s Ryan Weber has taught Lean Startup boot camps out of Carlson, at Stavig’s invitation, reaching ~50 students with our Startup School. Ryan has also guest lectured in the Applied Technology Entrepreneurship course on conducting market research and fundraising.
MN Cup is elevating the entire startup scene. MN Cup has become the largest statewide startup competition in the country. MN Cup takes no equity, is totally free, and distributes half a million dollars in seed funding to their startup participants. The exposure, funding, and recognition they receive is unparalleled in Minnesota. Some of the biggest startups to come out of the competition are:
- Sezzle- 2016 High Tech Division winner
- Stemonix- 2016 Grand Prize Winner
- Kipsu- 2015 Finalist
- 75F- 2014 Grand Prize Winner
- WhenIWork- 2013 High Tech Division Winner
- Foodsby- 2013 Semifinalist
Donors like the Carlson Family Foundation enable Director Jessica Berg to make MN Cup possible. The competition grows bigger every year through their support and efforts. Great North Labs’s Rob Weber judges every year in the High Tech division, and can attest to the increasing quality of startups. Great North has invested in two MN Cup alumni to date, Plyo (2018 Student Division Winner) and TeamGenius (2017 Semifinalist).
Atland Ventures provides students real VC experience. Atland is the first-of-its-kind, student-run venture fund, investing in companies that leverage disruptive tech. Originally founded in 2016 by four students, Atland has invested in a dozen companies, including two in the Great North Labs portfolio, Structural and Dispatch. Atland is an independent company, not a student organization, and students can actually see profits from their efforts if the fund succeeds. Their faculty support is from Stavig, David Russick, founder of Gopher Angels, and Raj Singh, Assistant Dean of Undergraduates at Carlson.
The limited partners include some of the most active local early-stage investors, including our partners Ryan and Rob Weber. Rob also serves as a mentor, and has recruited past Atland directors and managing partners to expand on their practical experience by interning at Great North Labs. The experience students gain at a working venture capital fund is a tremendous benefit in an industry that is notoriously hard to get in, and several have gone on to land jobs at startups and venture funds.
The U of M has a proliferation of startup support efforts across disciplines. Venture Builders, Grow North, MIN-Corps, WE at the Holmes Center; the Venture Center, MNBridge, and the Discovery Capital Program at University of Minnesota Technology Commercialization, are among the additional efforts to cultivate and support startups.
One example of the results of this multi-disciplinary collaboration is a startup we recently looked at called Grip Molecular Technologies. Grip is a cutting-edge startup using novel nanomaterials in an electronic biosensor to provide medical diagnostics. Not only are 2 different research scientists on the team from the U of M, but also a marketing executive.
Results by the Numbers
Since 2006, the U of M has launched over 165 startups. They have attracted over $1.15B in capital, and 7 have gone public since 2017. Investors can track U of M startups as they develop, through an online Startup Pipeline.
The U of M is ranked #18 for Global MBA programs in Entrepreneurship, with the largest statewide startup competition in the country, and 260 mentors providing guidance. Countless students have gone on to lead or work in startups.
In the Great North Labs portfolio, startups employ over 63 U of M alumni. That averages to nearly 2 U of M alumni for every startup we have invested in!
Why It Matters
The University of Minnesota is embracing startup culture across disciplines, and is contributing to the growth and development of talent, capital, and support necessary to early-stage startups in the region. This enables digital transformation and innovation across sectors. We are aligned with this approach, and work with the U of M to realize economic value creation in Greater MN, Minnesota, and across the Upper Midwest.
While people and companies capture headlines with big funding rounds, IPOs, and acquisitions, much of the work the U of M is doing is out of the spotlight. The truth is that the university is plugged in and making a difference in the startup ecosystem.
We’ve seen it firsthand, working with the administrators, the organizations, the faculty, and the students. And with leaders like Stavig, Berg, Russick, and the Carlson Family, the impact is only going to grow.
Author: Rob Weber
Most colleges and universities are finding it very challenging to cultivate strong startup communities like those found at leading institutions like Stanford and Yale. But if we take a deeper look at these leading institutions, and how others are responding to this challenge, we can build a repeatable model to support the the rise of the rest.
Certainly one component to developing a strong collegiate startup culture is having a strong curriculum, jam packed with not just theory but applied learning activities which enable students to develop skills required for jobs in today’s workforce. A good example of this occurred two years ago with the creation of a Software Engineering Degree at St. Cloud StateUniversity. Many engineering programs have become dated in our region but SCSU’s Science and Engineering leadership are meeting regularly with industry leaders to identify the practical needs of employers and then developing new degrees in support of satisfying them.
Many companies are looking for strong software engineers. SCSU has long offered an ABET-accredited Computer Science Degree that is strong on fundamentals like Database, Computer Architecture and Operating Systems. Started in 2015, they offer a Software Engineering Degree which adds required courses on the Software Development Process. In addition they are also offering electives in Mobile Development, and Gaming and Visualization (useful for 3D software such as VR/AR programming).
Additionally, four years ago, SCSU opened a brand new 100,000 square foot ISELF facility where students can work with industry leaders on projects utilizing cutting edge technology like VR/AR, Robotics, Nanotech, 3D printers, etc. The vast majority of students today in Computer Science programs would rather be learning coding skills to build useful enterprise or consumer software instead of spending their college years learning how to build infrastructure they are not interested in building.
The ISELF building is not just a place for engineering SCSU students to gather either. The new facility is being utilized by students across a variety of fields from business to liberal arts in support of experiential learning. Let’s face it, many software engineers don’t make the most aesthetically pleasing software! It may go well beyond SCSU’s campus too. Recently, we held a meeting between SCSU and CSBSJU’s Director for Entrepreneurship, Margrette Newhouse, and both groups of academic leaders expressed an interest in teaming up to get more student-led businesses from CSBSJU to work collaboratively with SCSU’s experiential learning offering.
It has become table stakes for a university to invest in equipping labs with cutting edge, disruptive technology to give students access to equipment that they otherwise won’t have access to. Some of America’s greatest startup stories involved young founders taking full advantage of their school’s resources. Take the story of Google and how their founders waited at loading docks at Stanford for new computers to come so they could increase their network and computing capacity. It isn’t 2000 anymore and students still need access to an even greater number of tools. Ideally, universities should invest in labs that provide access to breakthrough AR/VR technology, robotics, drones, etc.
One often overlooked and easily corrected way to supercharge your university’s startup community is to encourage it to focus its investing activity on regional venture funds that align with the university’s mission, as pointed in Tim Schigel of Refinery Ventures recent post. In Tim’s post, he shares insights as to how universities like Yale are generating outsized returns for their endowment than they would otherwise get in the stock market by investing in venture funds which align with their school’s regional impact mission.
Today, most universities investing in the venture capital asset class send all of their funds outside of their region. This far-away distribution of venture capital creates a vicious cycle where the universities in other regions end up dramatically outperforming them, which causes the original university to be less competitive. If there are no venture funds in your region, universities should consider adopting a policy to take small amounts of their capital and deploy it to first-time fund managers who align with a regional investing strategy.
Startup competitions like the Minnesota Cup organized by the University of Minnesota bring awareness to many startups that otherwise would fly under the radar. Beautiful things happens when you bring awareness to startups in your region. The entrepreneurial community will start to rally behind them, bringing with them valuable business contacts, advice, capital, and more to ensure their success.
And then there is that all so important issue of connecting top employment opportunities to the most talented graduating students. The best startup communities provide organized apprentice programs such as Xtern by TechPoint in Indianapolis. Apprentice programs are critical to the success of new graduates so they can learn applied skills required for these new high demand jobs.
Finally, the university needs to identify regional founders who can lead this charge and support them with a bottom up approach by spreading the word throughout various student groups across different disciplines. Top down approaches don’t work. Entrepreneurs are best led by entrepreneurs as Brad Feld describes in his book Startup Communities.