Jacqueline Urick likes to joke that she's "living the dream," even though it comes with a fair share of cold-sweat moments.
Entrepreneurs get plenty of support but need money
June 23, 2011 at 1:46AM
A start-up company that has already eaten through much of her savings. A job that pays nothing even as it consumes most of her waking hours. A product that won't be ready -- best-case scenario -- for at least a year, assuming Urick and co-founder Elizabeth Tupper can raise enough money to keep a small platoon of contract programmers on task.
It's a dream only other entrepreneurs could relish. Fortunately, Urick, who is 35, and Tupper, 31, found themselves in good company Tuesday night at a reception for the Minnesota Cup, an annual competition that awards up to $25,000 in seed capital to each of the most promising start-up companies in six categories, plus an additional $25,000 grand prize for best in show.
More than 1,000 companies entered this year's competition, and about 50 made it to the semifinal round. SieEnt (pronounced see-ent), which is developing subscription-based video games for women 25 to 64, was one of 10 companies selected in the high-tech category.
It's the biggest step yet in the brief history of SieEnt, but only a moment in the long grind of the life of a start-up.
Just ask Adam Elliott, who five years ago finished third in the Minnesota Cup. Brimming with optimism, Elliott remembers scoffing when someone counseled that it would take five or six years for him to even figure out whether his company, ID Insight, could be successful.
"I remember thinking, three months, tops," Elliott said.
ID Insight, a data analytics firm that helps financial institutions detect and defend themselves from identity theft, is finally on the brink of being cash-flow positive, but at times it has been a harrowing ride. The recession hit Elliott's customers, banks and credit card issuers, especially hard. And while placing third at the Minnesota Cup led to exposure and contacts, investors largely steered clear of the Arden Hills-based company.
"From a start-up perspective, angel or VC [venture capital] money doesn't flow very easily in Minnesota," Elliott said.
Everyone agrees that a vibrant start-up sector is essential to Minnesota's long-term vitality. Studies show the biggest engines of job creation are not small businesses but new ones, especially the kind that grow quickly and attract investment capital. In Minnesota, that used to come from medical technology, but start-ups and established firms alike are struggling with a sclerotic approval process for new devices.
Last year was the worst on record for venture capital investments in Minnesota. Funding picked up during the first three months of this year, but no one seems inclined to hail the start of a new trend.
That's the bad news. The good news is that, in many other important ways, Minnesota's technology start-up climate seems more robust than it's ever been.
Witness the sheer number of groups or organizations that have sprouted in the past six or seven years for entrepreneurs to showcase, shop and share ideas. In addition to the Minnesota Cup, in its seventh year, there's the Minnesota Emerging Software Advisory, which provides mentorship services to new technology companies; Project Skyway, a local "accelerator" of early-stage companies that will help finance eight companies, including seven based in Minnesota; and minne*, a nonprofit that sponsors MinneDemo and other technology networking events. Last month's all-day MinneBar event drew 1,200 people. There's even a kinder, gentler version of TechCrunch, TechdotMN, that serves as a gathering place and resource for the start-up community.
SieEnt participated in Project Skyway's "bootcamp," and found the process extremely beneficial. "It really helped us focus our message in a way that would be more attractive to businesses and potential investors," Urick said. "Up until then, most of our messaging had been around the customer."
Scott Litman, one of the co-founders of the Minnesota Cup, credits this "idea infrastructure" and support network for the higher quality of companies entering the contest. "I think that's a sign of an improving ecosystem," he said.
But it's one that remains starved of oxygen -- money. Until we get more investors chasing ideas in Minnesota, we risk experiencing too much of the reverse: Entrepreneurs who follow the money right out of Minnesota, taking their ideas and a piece of our vitality with them.
ericw@startribune.com • 612-673-1736
The funding is expected to give more than 5,000 Minnesotans, especially in rural areas, high-speed broadband access across the state and help at least 139 businesses and 368 farms.
