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University of Minnesota Startup Pipeline Helps Boost State’s Innovation Economy

There is a common trait between the metropolitan areas considered the main hubs of technology and innovation in the country: a university specializing in cutting-edge research is usually located in its center.

In Silicon Valley, there is Stanford University and the University of California at Berkeley. In Austin, the University of Texas. Boston benefits from the Massachusetts Institute of Technology, Harvard University and Boston University, and New York draws its next generation of entrepreneurs from institutions such as Columbia University, Cornell and the University of New York. York.

The Twin Cities, revered as one of those tech hubs, is home to the University of Minnesota.

The university’s resume of success has attracted investors, CEOs and talent to the Twin Cities over the years. These professionals will be among those coming together next week for in-person and virtual events as part of Twin Cities Startup Week, an annual week-long series of seminars, talks, demos and networking events. designed to continue to grow the region’s startup ecosystem. .

“I like to think that there are as many causes as there are effects, and I think the university has been a key part of that,” said Rick Huebsch, executive director of the technology commercialization office of the university.

Since 2006, 216 companies have been created based on software, therapies, machines and devices created by researchers, professors, staff members and sometimes graduate students of the university.

Half of these companies were created in the last five years.

Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement that the University of Minnesota “is a key part of our state and regional startup ecosystem.”

“We are fortunate to have such a strong research university in Minnesota that understands technology commercialization so well,” Grove said.

Minnesota’s public university system, which has five campuses across the state, ranked 15th in the United States in start-up education among all universities and sixth among public universities in 2020, according to the Association of University Technology Managers.

The majority of companies spun off from the university since 2006 are companies focused on biosciences and pharmaceuticals, software and information technology, and medical devices.

The potential of these companies has attracted nearly $2 billion in investment capital while creating hundreds of jobs.

“High-tech (startups) are the ones that are going to raise the most venture capital,” Huebsch said. “Attracting investors, CEOs and bringing people back to the region is an economic driver.”

Success stories include Eden Prairie-based Miromatrix Medical, a medical technology company using university-invented technology to develop a way to bioengineer fully transplantable human organs that could eliminate waiting lists for organ recipients. Micromatrix raised $43 million from new shareholders after its Nasdaq IPO last year.

There’s also Niron Magnetics, a Minneapolis startup spun off from a University of Minnesota research lab that raised $21.3 million last year to build a magnet production facility. The company is funding the construction of a 25,000 square foot pilot plant next to its research center in northeast Minneapolis. Once completed, it will manufacture magnets for, among other things, electric vehicles.

More than 71% of companies created from college are headquartered in Minnesota and have collectively created 1,100 jobs.

The entire Minnesota startup ecosystem benefits, said Russ Straate, who leads the Technology Commercialization Office’s Venture Center.

“We bring high-tech startups into the ecosystem that also have the advantage of requiring high-tech people (with) high salaries,” Straate said.

This has a particular impact on the amount of venture capital dollars that come into the state, Straate added.

“When (investors) are here, they will not only see ours, but also other companies,” he said.

And because most startups outsource most of their service needs to keep payroll costs down, local businesses benefit from being hired as contractors, Straate said.

“All boats float higher,” he said.

Of the nearly $2 billion in investments raised by more than 210 companies, $675 million comes from IPOs and acquisitions. Additionally, 10 university companies have been acquired or taken public since 2017 and companies created since 2006 have a survival rate of 77%, according to the university.

Businesses created at the university generated $16.1 million in licensing revenue for fiscal year 2022, compared to $17.4 million in 2021. Revenue is distributed through a shared system, Huebsch said, the returns to the research community, the department and faculty, and the university as a whole.

MPact 2025, the system-wide strategic plan for the University of Minnesota, calls for the creation of 25 startups each year by 2025. In fiscal year 2022, the university launched 22 companies.

The growth of business education at university has also led to an increase in the number of scholars interested in entrepreneurship.

“In the past, we had to pull startups out of it,” Straate said. “Now they come up to us raising their hands and saying, ‘I have a technology that I think can be a new business creation.

About Start Week

Twin Cities Startup Week, a week-long series of events designed to educate entrepreneurs on how to grow their business while connecting them with investors, academics and business leaders, begins Friday. Launched in 2014, nearly 17,000 people registered for last year’s events. More than 200 events are scheduled on the subway for this year’s series, which kicks off at 6 p.m. Friday with an opening night.

Here’s a look at some of the best events:

  • 4:00 p.m. Monday: Minnesota Cup Final.
  • 5 p.m. Monday: MN Tech & Job Opportunities Fair.
  • 6:00 p.m. Wednesday: Beta Showcase.
  • 6 p.m. Thursday: Minnedemo37.

Visit twincitiesstartupweek.com for more information.