Minnesota, nation raise more VC investment in 2018

Minnesota and the nation set a record in 2018 for attracting venture capital in U.S.-based startup companies, according to the PitchBook-National Venture Capital Association Venture Monitor.

After a somewhat slow first half, venture investors staked $130.9 billion in U.S.-based startups, surpassing the previous all-time high in 2000.

"The venture ecosystem continued to slash records in 2018 … illustrating the maturation of the venture capital asset class, but also raising questions about the sustainability and health of these activity levels moving forward," said CEO John Gabbert of PitchBook. "Some [venture investor partnerships] have expressed concern that excess capital has led to inflated round sizes and valuations. In the event of any adjustments in the global economic or political backdrop, valuations may see a correction from their currently elevated levels, but private market investment activity will likely continue unabated."

Minnesota companies raised a record $786 million, according to PitchBook, thanks to a strong fourth quarter that brought in more than $332 million.

Sentera, a Richfield-based agricultural drone and data-analysis software firm was one of those local firms. It raised $14 million, following $8.5 million raised in 2016, mostly from individual investors.

Steve Grove, a former Google News manager and Minnesota native who is Gov. Tim Walz's new commissioner of economic development, recently criticized Minnesota's "tech ecosystem'' for falling in the national rankings. He called for more aggressive marketing of the state, and reinstatement of the Angel Tax Credit program, a tax subsidy for individuals who invest in Minnesota startups.

"We should also consider directly placing a portion of the state's investments into select local venture funds to increase the overall pool of capital available to startups," Grove wrote last fall.