Rochester, Minnesota, home to the world-renowned Mayo Clinic, has become synonymous with entrepreneurial tech innovation.
With businesses such as medical device startup Nanodropper, pioneered by students who developed an adapter to make eye drops smaller, and biomedical research company Cytotheryx, focused on supporting liver health, Rochester continues to build a reputation as a nurturing ecosystem for entrepreneurs.
These two companies, along with nearly 100 others, have received early-stage funding grants from another innovative initiative named Launch Minnesota. Founded in 2019 by the Minnesota Department of Employment and Economic Development (DEED), Launch Minnesota started as a two-year pilot program designed to accelerate tech startups with grant funding and to amplify Minnesota as a leader in innovation.
Pockets of support for entrepreneurs have existed across the state for a long time but there was a need to connect and catalyze those pockets and turn them into a coordinated and connected ecosystem, said Neela Mollgaard, the executive director of Launch Minnesota.
“We’ve created a connected, coordinated network across the state,” she said, “providing that front door for our entrepreneurs, leveraging best practices, building on capacities and providing those on-ramps and pathways our startups need to be successful.”
Launch Minnesota provides grants directly to early-stage startups as well as to organizations that support them, nurturing the collaborative ecosystem for entrepreneurship across the state.
“We’ve allocated over $3 million thus far to over a hundred unique startups,” Mollgaard said. “One hundred percent of our entrepreneurs have reported in their six-month progress report that their business has moved forward because of this grant. We’ve also seen an incredible return on investment for our grant dollars. It’s about a 2.5x to 4x return for our grant dollars to the private dollars that they’ve been able to raise.”
A super connected network for Minnesota entrepreneurs
Mollgaard said the organization has created a unique hub and spoke model that reaches across the state. This model unites six regions in Minnesota by creating eight hubs and over 80 partner organizations to give entrepreneurs access to services, training, connections, networking and additional benefits they may never discover on their own.
The U.S. Small Business Administration awarded Launch Minnesota its Super Connector Award in January of this year, one of four recipients among 160 submissions from across the country, largely because of this new model pioneered by Mollgaard. The Super Connector category recognizes “current efforts to successfully attract and/or support networks of underrepresented communities in the R&D innovation ecosystem.”
One of the partner organizations in the novel hub-and-spoke model is Destination Medical Center (DMC), the largest public-private economic initiative in Minnesota and its own catalyst for growth in Rochester. With more than $5 billion in projected private investments over the next 20 years, DMC is able to provide ample economic development opportunities in the city, region and state.
One of DMC’s top priorities is to attract private investment to the region and create jobs, priorities that are shared by Launch Minnesota, and demonstrated by the private money return on investment for grant dollars illustrated above.
Continued funding to help innovators
Though it began as a pilot program, Launch Minnesota has a robust future. The original funding from the state ended in June of 2021, but Mollgaard said, “We had an outpouring of support from our startup community and their voices were heard. We were able to garner the support of the governor and our legislators, and now we have funding for the next four years. We have great momentum and a four-year runway to build on what we’ve accomplished in the first year and a half of the program.”
In an episode of Destination Medical Center’s podcast, Urban Evolution, which is about harnessing creativity and innovation to transform communities, Mollgaard told host Bill Von Bank, “We’ve been able to increase access and opportunity to funding to those all across Minnesota, especially those that are underrepresented, and we’ve amplified the story of Minnesota in the local cities, in the regions, the state and nationally.”
Mollgaard emphasized that it takes everyone working together to generate the best outcome.
“The private sector plays an incredible role, as do founders and entrepreneurial support organizations, and it takes the whole ecosystem,” she said. “I’m so pleased we are all working together now, focused on our innovators to really help grow this piece of our economy.”
With Mayo Clinic at its heart, DMC is the largest public-private economic initiative in Minnesota and a catalyst for growth in Rochester. DMC is designed to position Minnesota as a global center for the highest quality medical care and to generate high-value jobs, new tax revenue and businesses. Learn more.