MN Venture Capital Investment Hits New Low in 2010

The total dollar amount invested in Minnesota companies last year represents a 48 percent decline from 2009 and is the lowest since state-by-state data was first collected in 1995.

Venture capital investment in Minnesota companies declined sharply in 2010-and the total dollar captured by companies within the state represents a new low since data was first collected 15 years ago.

Twenty-six companies within Minnesota together took in $139.5 million last year, according to data released Friday by the National Venture Capital Association and Pricewaterhouse Coopers, using data from Thomson Financial.

The dollar figure represents a 48 percent decrease from 2009, when $266.2 million was invested in 34 Minnesota companies, and it is the lowest amount since state-by-state data was first collected in 1995.

Minnesota's venture capital activity last year bucked the national trend. Venture capitalists across the country collectively invested $21.8 billion in 3,277 deals, representing a 19 percent increase in dollars and a 12 percent jump in deals when compared to 2009.

Minnesota's life sciences sector has long captured the greatest portion of venture capital within the state. Although that still holds true, the sector has taken some hits recently-partly due to concerns and uncertainty about new regulations that the U.S. Food and Drug Administration has been considering, some of which the agency recently announced plans to officially implement. Investments in medical device companies dropped 9 percent to $2.3 billion nationally in 2010, and investments in biotechnology companies increased a modest 3 percent to $3.7 billion.

In the fourth quarter of 2010, seven Minnesota companies collectively took in $30.93 million in venture capital investment, which represents a 6 percent decline from the previous quarter and a 70 percent decline from the same period in 2009.

The Minnesota companies that captured investments in the fourth quarter were Lutonix, Inc., BridgePoint Medical, Inc., Inspire Medical Systems, Inc., CNS Therapeutics, Inc., Orasi Medical, Inc., JobDig, Inc., and Aveso, Inc.