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MoreLIP: Badgers Attract Biotech Gophers

10/05/2009 — George Lipper, Development Capital Networks

We may not be able to count the number of angels that can dance on the head of a pin. Yet it appears -- despite years of pressure on state government -- that Minnesota entrepreneurs are unable to attract enough angel capital to help commercialize spin-out companies from the University of Minnesota. Spin-outs that instead turn to Wisconsin.

Thomas Lee of the Minneapolis Star Tribune last week authored a well-researched two-part series (top of column two in this week's LCW) calling attention to the number of Minnesota companies relocating across the river to Hudson, Wisconsin. Companies lured primarily, according to Mr. Lee, by the Badger State’s well-tuned program of encouraging angel investors via a very generous tax credit program.

Minnesota economic development advocates have been trying for years, without success, to lobby state policymakers to add such a program to the Golden Gophers’ toolbox. Now they stand by, watching as Minnesota companies -- born of the research of its universities -- cross the Mississippi River to find adequate start-up funding.

About 30 states have angel tax credit programs, and none better than Wisconsin’s carefully structured, well-executed program. We’ve also included in this week's LCW a link to commentary on the situation by Tom Still, President of the Wisconsin Technology Network and a former journalist.

Both Lee’s stories and Still’s comments are well worth your time.

And to add a little insult to injury, on Saturday the underdog Badgers edged the favored Golden Gophers to retain in Wisconsin the Paul Bunyan Axe trophy for the 6th year in a row. The trophy is not likely to be displayed in Hudson.


While we’re talking about angel investors, that community lost a giant last week with the death of Luis Villalobos, a leader in the growing field of angel investing. Luis has been an active angel for decades, helping launch Tech Coast Angels and, more recently, the Angel Capital Association. He will be greatly missed by many, as the dozens of entrepreneur recipients of his investments can swear.