Column: Guest Column, by Tim Penny

It’s been well-documented that a “growing our own” strategy of economic development provides greater success than a “recruitment” strategy in rural communities. Here at Southern Minnesota Initiative Foundation, we are excited about helping local entrepreneurs turn their assets, ideas and opportunities into new or expanding businesses.

One area where we are increasing our attention and resources is in start-up and expansion capital, especially patient capital. We know this is a critical component for rural economies.

Over the last year, SMIF has had the exciting opportunity to be a regional intake center for the nonprofit Minnesota Angel Network. MNAN is a statewide initiative which provides rigorous leadership training to entrepreneurs and gives them access to investors looking for opportunities to back a start-up company. Our role has been to help enroll businesses into the MNAN program and host events to connect businesses with potential investors.

MNAN’s approach helps us address two challenges in Greater Minnesota: the lack of access and exposure to investors, as well as a lack of expertise among entrepreneurs in presenting to investors.

The program first connects entrepreneurs with advisors who provide education, counsel and training. Once this training is complete and the business becomes certified, companies are connected with accredited investors through an online portal. Here entrepreneurs post business plans, develop pitches, consolidate essential business documents and allow interested investors to view their documentation.

What’s exciting for us at SMIF is how this overall process translates into tangible results. For instance, Ellumilite, which manufactures electroluminescent lamp signs, is a graduate of the MNAN program. The company promises the brightest, most flexible, thinnest, durable and energy-efficient electroluminescent lighting-as well as being non-hazardous to dispose of and more energy efficient than other light sources.

Through the Angel Network’s investor program, Ellumilite was put in front of John Garry, executive director of the Development Corporation of Austin and Mower County. Now, with loans from our foundation, the DCA, and the city of Austin, Ellumilite is up and running in Austin. The business will start with a few employees, but president Lori Anderson estimates she’ll have 20 employees within two years; 50-100 within five years.

Even more exciting for SMIF is one of the partnerships this company has made. Ellumilite lamps will use power sources manufactured by Austin-based Auscon, another one of SMIF’s loan partners. One of our foundation’s key roles over the years has been as a regional collaborator and connector. We know that our participation in the Minnesota Angel Network allows us to increase our impact.

In addition to our partnership with MNAN, SMIF continues to provide early-stage investment resources through the Seed Fund. The Seed Fund supports start-up stage businesses that need capital (up to $25,000), business expertise and networking opportunities. If you would like more information about MNAN or the Seed Fund, contact Pam Bishop at pamb@smifoundation.org or 507-455-3215.

As always, I welcome your comments and questions. You can reach me by phone 507-455-3215 or email timp@smifoundation.org

 

Tim Penny is the president and CEO of the Southern Minnesota Initiative Foundation.