Minnesota’s Home Field Advantage
In 2018, I moved to Minnesota after almost two decades working in Silicon Valley’s tech industry. The move was inspired by both personal connections and professional intrigue. My husband Steve’s large family lives here, which made raising our twins here appealing. But there was more to it: I had a hunch that the future of the innovation economy might lie in places like Minnesota that boast unique advantages for building and growing new companies.
So after 15 years at Google, I took the plunge to become a venture investor, backing early-stage tech companies through Bread & Butter Ventures, which I started with my partner Brett Brohl. I now pitch investors on our region’s secret weapon—the Minnesota home-field advantage. It centers on our corporate backbone, the multitrillion-dollar global industry behemoths in food tech, health tech, enterprise software, retail, and fintech. Companies like Cargill, Ecolab, Hormel, Securian, 3M, and Mayo Clinic lead their categories and are hungry clients for new technologies. And they are eager to be near new ideas in their fields, making them ready mentors and investors. Startups that launch and scale in Minnesota can partner with titans of industry right in our backyard, creating a flywheel of innovation unrivaled in most of the country.
Yet we’ve barely scratched the surface of this competitive advantage. We have a ways to go before Minnesota is recognized as a nation-leading startup ecosystem like Silicon Valley. Last year, Minnesota startups landed a record $1.9 billion in venture capital funding, up from $1.27 billion in 2019—No. 2 in the Midwest and No. 12 in the nation. But it’s still a fraction of the $130 billion in VC funding deployed across the U.S. in 2020.
We need more people to take risks. To get there, we need to encourage a culture of experimentation.
While our corporations may be the key to increasing our startup success, the entire business community can help establish Minnesota as an innovation hub. We can all leverage our home-field advantage for accelerated growth with these actions:
Support creation of more startups: We have a strong base of entrepreneurial support organizations (ESOs) to build on, like Beta, Minnestar, MN Cup, and Lunar Startups. We can continue to create structured programs and support to help entrepreneurs at the earliest stage connect to new resources. We can advocate for continued growth of programs like Launch Minnesota and the Angel Tax Credit, which incentivize more startups and investors to get in the game from the start.
Mobilize more early-stage capital: Minnesota is still a difficult place to raise capital, particularly at the early stages and, ironically, in sectors where we’re strongest, like consumer tech, food, and medtech. We can mobilize more individuals to be active angel investors, back the growth of more local venture capital firms, and proactively partner with VC firms across the country to establish a presence here or at least invest in Minnesota-based companies.
Embrace a culture of risk and failure: While we should lean into our own identity, we can borrow from Silicon Valley the sense of urgency—the foot-on-the-gas-pedal, run-fast-and-break-things mentality. Minnesota ranks first in the nation in five-year business survivability, but we’re in the bottom fifth for new business starts. We need more people to take risks. To get there, we need to encourage a culture of experimentation.
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Encourage big enterprise to proactively engage with startups: This is a massive untapped opportunity for our Fortune 500 and big enterprise suite to connect with emerging startups in their sectors. From sponsoring more ESOs and events to mentoring startups to deeper commercial engagements around supplier relationships, distribution deals, investing in startups and funds, and acquiring and keeping talent local, there’s a range of ways to create a more permeable membrane where talent can flow from enterprise to startups and back.
Lead on conversation and action on equity and inclusion: Through Bread & Butter Ventures, I think about driving change at every layer—the limited partners who invest in our fund, the diversity of our team and decision-makers, how we build an open-door pipeline with diverse founders and help our companies recruit and retain diverse talent. We believe that investing in diverse teams directly leads to better financial return, and we know firsthand that having a diverse investment team directly drives more diverse deal flow.
Tell our story to the world: Minnesotans are notoriously modest. In a world where talent can choose anywhere to live, we need to be a lot louder about what the state has to offer. We have a great and growing story in Minnesota, and the whole world deserves to know about it.
The opportunity has never been greater to bring the best of Minnesota to the world and the best of the world to Minnesota. The onus is on us to activate and capitalize on the uniqueness of our region. I’m excited for where we go next.
Mary Grove is managing partner of Bread & Butter Ventures and executive director of Silicon North Stars, a nonprofit she co-founded with her husband, Steve, commissioner of Minnesota’s Department of Employment and Economic Development.