Top 12 Venture Capital Firms in Minnesota: A Founder’s Guide to Securing Funding
Minnesota’s startup ecosystem is thriving, fueled by a growing network of venture capital firms that are actively investing in innovative, high-growth companies. Whether you’re a founder in healthcare, technology, food innovation, or SaaS, Minnesota offers a wealth of funding opportunities to help you scale your business.
In this article, we’ll explore the top 12 venture capital firms in Minnesota, highlighting their investment focus, notable achievements, and how they support entrepreneurs. If you’re actively fundraising, this guide will serve as a valuable resource to connect you with the right investors and take your startup to the next level.
Top 12 Venture Capital Firms in Minnesota
Southeast Minnesota Capital Fund
About: The Southeast Minnesota Capital Fund provides early-stage investment capital to Minnesota entrepreneurs building innovative, high growth companies. We invest across the state, with a preference for companies located in or connected to Rochester and SE Minnesota.
Thesis: We are an angel fund based in Rochester that aims to finance early-stage high-growth, high-return opportunities primarily in the Southeast Minnesota area.
Gopher Angels
About: Gopher Angels is MN's top angel investing network. Founded in 2012, we've invested over $27M in 85 companies across Minnesota and the Midwest.
Thesis: We fund Seed and Series A companies that have a substantial market opportunity, and the team and traction to demonstrate they can achieve it.
We’re industry agnostic, and invest in healthcare and health IT, enterprise and SaaS, food and beverage, medical devices, agtech.
Bread and Butter Ventures
About: Bread and Butter Ventures is an early stage venture capital firm based in Minnesota, the Bread and Butter State, investing globally while leveraging our state and region’s unparalleled access to strong corporate connections, commercial opportunities, and industry expertise for the benefit of our founders.
Sweetspot check size: $ 300K
Thesis: Investing in amazing founders, focusing on several core sectors of the economy: food/ag tech, health tech and enterprise SaaS
Groove Capital
Sweetspot check size: $ 100K
Thesis: Groove Capital is where entrepreneurs in Minnesota go to get their first institutional investment. We partner with great teams, who have demonstrated an ability to execute, with some evidence of a defensible advantage, in a market that is compelling.
TinySeed
About: TinySeed is the first startup accelerator in the ‘independent funding’ space – that space between bootstrapping and venture capital. While not strictly RBI, we are designed for SaaS founders who want to maintain control of their companies and who up until last year, would have bootstrapped due to the lack of relevant funding options.
We have a simple investment philosophy – we make investments in companies with market traction and a demonstrated ability to drive innovation.
Investing is more than a transaction for us – it’s a mutually beneficial relationship. Our initial investment size typically ranges from $500,000 to $5 million, and we’re active in all investment stages – from seed and early stage to growth – of companies operating within North America.
Allianz Life Ventures
About: We invest in innovative technology startups that align with our core business and financial goals.
Thesis: We have a simple investment philosophy – we make investments in companies with market traction and a demonstrated ability to drive innovation. Investing is more than a transaction for us – it’s a mutually beneficial relationship. Our initial investment size typically ranges from $500,000 to $5 million, and we’re active in all investment stages – from seed and early stage to growth – of companies operating within North America.
Vensana Capital
About: Vensana Capital is a venture capital and growth equity investment firm dedicated to partnering with entrepreneurs who seek to transform healthcare with breakthrough innovations in medical technology.
Thesis: Vensana is actively investing in development and commercial stage companies across the medtech sector, including medical devices, diagnostics and data science, drug delivery, digital health, life science tools, and tech-enabled services.
Norwest Equity Partners
About: Norwest Equity Partners (NEP), a Norwest Capital strategy, champions good businesses with a goal of achieving enduring success. NEP seeks to invest in growing and profitable middle-market companies primarily across the business services, consumer products and services, and industrial growth sectors. We help create opportunities and long-term value by finding and fueling what’s working in successful companies to help build them into industry leaders.
Arthur Ventures
About: Arthur Ventures began with a simple goal in mind–to seed and enable growth in their partner companies. They believe in the power of the growth cycle and the positive effect that well-managed businesses can have in society. Arthur works with companies to help solve crucial problems for customers in areas of information technology, life sciences, and clean technology.
Sweetspot check size: $ 5M
Thesis: We lead investments in high-growth B2B software companies located in every region across North America and Western Europe (aside from Silicon Valley).
Sofia Fund
About: Sofia Fund invests in and grows exceptional women-led companies – those with strong leaders and highly compelling business models that are scalable and meet a market need – to maximize returns for investors. Sofia Fund uses a rigorous process for selecting and investing in high-growth opportunities. Its team of professional women angel investors actively manages and supports its portfolio businesses, leveraging deep expertise and broad networks to help women entrepreneurs achieve success.
Thesis: Our focus is on gender-diverse teams with disruptive, scalable business models that use technology to solve real problems.
Capita3
About: Capita3 is building a global financing institution for investing in exceptional women leading game-changing companies. In addition to financial investment, Capita3 focuses on developing startup CEOs to maximize their growth and the company's exit potential. We’re leading the next generation of venture capital, and we’ll set a new standard for how venture financed startups grow and exit.
Brightstone Venture Capital
About: Brightstone Venture Capital is an early-stage, growth-oriented venture capital management firm based in Minneapolis. Since 1985, Brightstone has managed multiple venture partnerships and has made over 100 equity investments into a variety of technology and life-science companies nationwide.
Government Grants and Funding Programs in Minnesota
For startup founders in Minnesota, government grants and funding programs can provide critical financial support to help launch, grow, and scale their businesses. These programs are designed to foster innovation, create jobs, and strengthen the state’s economy by supporting entrepreneurs across various industries. Below is an overview of some key government grants and funding opportunities available to Minnesota startups.
Launch Minnesota Innovation Grants
Launch Minnesota, an initiative by DEED, offers innovation grants to support startups in their early stages. These grants are specifically targeted at high-tech startups and entrepreneurs from underrepresented communities. The program includes:
- Business Operations Grants: Up to $35,000 to cover business expenses like R&D, product development, and marketing.
- Housing and Childcare Grants: Up to $7,500 to help founders offset personal expenses while building their businesses.
Launch Minnesota also provides access to a statewide network of innovation hubs, mentorship opportunities, and educational resources to help startups succeed.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs
Minnesota startups can take advantage of federal SBIR and STTR programs, which provide funding for research and development in technology and innovation. While these are federal programs, DEED offers support to Minnesota startups applying for these grants, including:
- Assistance with grant applications.
- Workshops and training sessions to improve success rates.
- Matching funds for startups that secure SBIR/STTR grants.
These programs are particularly valuable for startups in industries like healthcare, technology, and energy.
Minnesota Job Creation Fund
The Minnesota Job Creation Fund is designed to support businesses that are expanding and creating jobs in the state. While it primarily targets established businesses, startups with plans for rapid growth may also qualify. Key features include:
- Grants of up to $1 million for businesses that meet job creation and capital investment requirements.
- Priority given to businesses in targeted industries, including technology and manufacturing.
This program can be a great resource for startups planning to scale operations and hire locally.
Angel Tax Credit Program
While not a direct grant, Minnesota’s Angel Tax Credit Program incentivizes investment in early-stage startups by offering tax credits to investors. This program helps startups attract funding from angel investors by reducing the financial risk for investors. Key details include:
- A 25% tax credit for qualified investors.
- Focus on startups in high-tech, medtech, and other innovative industries.
By leveraging this program, startups can make themselves more attractive to potential investors.
Minnesota Agricultural Growth, Research, and Innovation (AGRI) Program
For startups in the agriculture and food innovation sectors, the AGRI program offers grants to support research, development, and commercialization. This program is particularly relevant for startups working on sustainable agriculture, food production, and agtech solutions. Funding opportunities include:
- Grants for value-added agriculture projects.
- Support for research and pilot programs in agricultural innovation.
How to Access These Programs
To take advantage of these government grants and funding opportunities, founders should:
- Visit the Minnesota DEED website to explore available programs and eligibility requirements.
- Attend informational workshops and webinars hosted by DEED and other local organizations.
- Work with local Small Business Development Centers (SBDCs) for guidance on applications and business planning.
The Minnesota Startup Ecosystem at a Glance
Minnesota has steadily emerged as a vibrant hub for startups, offering a unique blend of innovation, resources, and community support. While it may not yet rival traditional startup powerhouses like Silicon Valley or New York, Minnesota’s ecosystem is growing rapidly, driven by its strong industries, talented workforce, and collaborative environment.
Key Industries Driving Minnesota’s Startup Growth
Minnesota’s startup ecosystem is anchored by several key industries that have historically thrived in the region. These include:
- Healthcare and MedTech: Home to global healthcare giants like Medtronic and the Mayo Clinic, Minnesota has a strong foundation in medical technology and healthcare innovation. Startups in this space benefit from access to world-class research institutions and a network of experienced professionals.
- Technology: The tech sector in Minnesota is growing, with startups focusing on software development, artificial intelligence, and fintech. The state’s tech talent pool is expanding, supported by local universities and coding bootcamps.
- Food and Agriculture Innovation: Known as the “Breadbasket of America,” Minnesota is a leader in food and agriculture innovation. Startups in this sector are leveraging the state’s agricultural heritage to develop sustainable food solutions and agtech advancements.
Recent Trends in Minnesota’s Startup Ecosystem
The Minnesota startup scene has seen several exciting developments in recent years, including:
- Increased Funding Activity: Venture capital investment in Minnesota has been on the rise, with more local and national investors recognizing the potential of startups in the region. According to PitchBook, Minnesota-based startups raised significant funding in 2022 and 2023, particularly in healthcare and technology sectors.
- Notable Startup Success Stories: Companies like Bright Health, Arctic Wolf, and Gravie have gained national attention, raising substantial funding and scaling their operations. These success stories are inspiring a new generation of entrepreneurs in the state.
- Collaborative Ecosystem: Minnesota’s startup community is known for its collaborative spirit. Organizations like Beta.MN and Twin Cities Startup Week foster connections between founders, investors, and mentors, creating a supportive environment for growth.
Why Minnesota is Attractive for Startups
Minnesota offers several advantages that make it an appealing location for startups:
- Strong Talent Pool: The state boasts a highly educated workforce, with top-tier universities like the University of Minnesota producing skilled graduates in engineering, business, and technology. Additionally, Minnesota’s quality of life attracts professionals from across the country.
- Supportive Community: Minnesota’s startup ecosystem is built on collaboration and support. Founders can tap into a network of accelerators, incubators, and mentorship programs designed to help startups succeed.
- Cost of Living and Business: Compared to coastal hubs, Minnesota offers a lower cost of living and more affordable business operations. This allows startups to stretch their funding further while maintaining a high quality of life for their teams.
Connect With Investors in Minnesota Using Visible
At Visible, we often times compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors.
With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible.
- Find investors at the top of your funnel with our free investor database, Visible Connect and find a filtered list of Minnesota's investors here.
- Track your conversations and move them through your funnel with our Fundraising CRM
- Share your pitch deck and monthly updates with potential investors
- Organize and share your most vital fundraising documents with data rooms
Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.
