Growing Minnesota’s Startup Ecosystem with Launch Minnesota

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An exciting outcome of the 2019 Legislative session was the creation of a new program through the Department of Employment & Economic Development (DEED) called Launch Minnesota. Designed to nurture technology startups and entrepreneurs across the state, Launch Minnesota will work with private industry to create financial incentives and programming to demonstrate that Minnesota is committed to fostering an innovation ecosystem that draws global attention.

The program concept grew out of a collaboration between DEED and the Minnesota Legislature – with legislators on both sides of the aisle making meaningful contributions. It is a joint initiative with private businesses and nonprofit organizations statewide.

“Entrepreneurs are the future of Minnesota’s innovation economy,” said DEED Commissioner Steve Grove. “We need to play an active role in helping make this state a great place to foster new technologies and ideas so that maybe the next Google or Apple could come from Minnesota.”

Launch Minnesota will provide financial incentives, training, and grants to people starting companies in technology sectors such as aerospace, agricultural processing, nanotechnology, and medical devices. The program has an annual budget of $2.5 million.

A key goal of Launch Minnesota is to make the risks related to leaving a steady job to start a high technology company a little more manageable for entrepreneurs through:

  • Grants to assist in attracting federal research and development funding
  • Business liquidity grants to help entrepreneurs with capital constraints
  • Childcare and housing assistance
  • Training in areas such as understanding equity capital, building toward scalability, and pitching venture capitalists

Launch Minnesota is set up to provide special consideration and social capital connectivity for startups and small businesses in Greater Minnesota as well as businesses started by women, veterans, and people of color.

Commissioner Grove recently spent some time in Rochester, Minnesota to meet with the startup and entrepreneurial community. Grove’s visit highlights the growing interest in Rochester and Destination Medical Center as a success story in economic development and as a major technology hub within the state. 

Register Now for the Investor & Innovator Forum

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The Investor & Innovator Forum returns to Rochester, MN on August 1. Launched by Destination Medical Center and Mayo Clinic, the Investor & Innovator Forum seeks to foster conversation and collaboration between emerging and experienced entrepreneurs and the investors who support their growth. Participating investors and advisors include Brightstone Ventures, capita3, Medtronic and more. 

“During the Forum, there will be a private speed networking session between innovative companies and investors, during which companies will have the opportunity to talk with investors and advisors on a one-on-one basis for input and insights,” said Christopher Melsha, co-chair of the Life Sciences Group at Fredrikson & Byron, a co-presenter of the Forum. 

“The Investor & Innovator Forum is an important opportunity for founders and investors to get connected. We are excited to use this opportunity to showcase the growing startup ecosystem that is anchored in Destination Medical Center’s Discovery Square,” said Chris Schad, director of business development, DMC Discovery Square.

Here is an overview of the day on August 1:

  • The Forum will include a lively panel discussion featuring innovations in the use of data in key industries, including healthcare, medical device, insurance and financial services; 
  • Perspectives from a range of investors, including individual/angel investors, a venture capital fund and strategic investors; 
  • Lessons and insights from battle-tested innovators, sharing details on how to go from idea to company; 
  • and best practices and lessons learned from Mayo Clinic and nference, a company committed to synthesizing information to make better healthcare decisions, on their several ongoing data-focused projects.

The forum is co-presented by:

The registration cost for the Investor & Innovator Forum is $35 and takes place at the Rochester Civic Theatre. Register here.

Refined Prototype Furniture Returns to Heart of the City

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Prototyping is a way to inform designs before they’re final. Over the years, you’ve seen DMC, the City of Rochester, and the Rochester Downtown Alliance prototype in multiple ways. From the Placemakers Prototyping Festival to the recent Community Couch and Flexible Fountain installation, each step has informed the next. Prototyping allows design teams the ability to react quickly to community feedback and to efficiently make modifications, with the end goal of creating a better design.   

This summer, DMC has been prototyping public benches – incorporating universal design – in and around the east side of Peace Plaza. The first installation of the bench prototypes was placed on Peace Plaza next to Primp. The Heart of the City design team sought initial reactions to the overall idea of the benches, their look and feel, and to learn how people use them.

The community used the benches in a variety of ways, standing and sitting while eating meals, using the lean bench for working, and having conversations. Strong feedback was received on the industrial look of the benches.  Some people wanted a softer, more approachable feel for public seating.

After a busy few weeks of modifying the Heart of the City bench prototypes, they will now be placed back onto Peace Plaza for phase 2 prototyping. The second prototype incorporates many of the suggestions provided by the community, including:

  • Adding wood to the seat and table/counter surfaces to provide a softer material to the touch
  • Adding color to the end panels to add visual interest and a more playful feel
  • Sanding the metal to smooth the edges of the joints and perforations

You can find the prototype benches on First Avenue in front of Primp. During the first prototype phase, the benches were set up in a way that encouraged conversation. During this second phase, you will notice that the benches are arranged differently – one faces the street, and the other faces the shops and the sidewalk. 

The design team invites you to stop by and check out the benches. A Heart of the City goal is to create seating that helps you get the most out of your public space and help make Peace Plaza a place where all will want to gather – community, visitors and patients. 

The design team would like to know what you think about the arrangement. When do you use them and why? How do you observe others using them? What are your thoughts on the new surfaces?  

Please send your comments to [email protected]

Rochester Startup Advances in Minnesota Cup Competition

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Rochester startup Phenomix Sciences is making strides in the personalized medicine space. This company, based on Mayo Clinic technology, is tackling obesity one patient at a time, and has made it to the semifinal round of the Minnesota Cup, the largest statewide business plan competition in the US, giving participants access to mentors, business education, and seed funding.

Forty percent of the US adult population is impacted by obesity. Current intervention treatments, such as drugs and surgeries, have a limited impact due to the high variability in disease cause. To address this, Phenomix Sciences is hoping to improve patient outcomes by introducing a blood test that will help predict an individual’s response to a given therapy or treatment.

Phenomix Sciences is led by a strong core team with a unique blend of experience in the treatment of obesity and in launching startups. The company’s technology, developed by Mayo Clinic gastroenterologist Dr. Andres Acosta, has been licensed to Phenomix for commercialization. Chief Operations Officer Ross Higgins has years of experience in the biotech and clinical laboratory space, most recently leading lab operations for Oneome, another Mayo Clinic startup. Industry expert Diane Dell’Armo serves as VP of Market Development after spending years launching products at Merck and the obesity therapeutics company Orexigen.

“Minnesota has some of the top businesses and talent right in our own backyard and Minnesota Cup has set up an amazing program that showcases startups like Phenomix,” Higgins explained. “While there is potential outcome of non-dilutive capital, we are most excited for the opportunity to learn from a seasoned pool of mentors who will undoubtedly help take our business plan, pitch, and fundraising to the next level.”

Higgins said that Minnesota Cup, which is free to all entrepreneurs, has been a very positive experience so far. Three finalists in each of the nine divisions will be selected by the end of summer. The overall grand prize winner will be announced in October.

Phenomix considers Rochester a unique city to build a business in because of the technology and talent coming out of Mayo Clinic. The startup has a lab facility in Saint Paul but is considering centralizing other pieces of the business in Rochester.

“The entrepreneurial future of the city will revolve around building a successful ecosystem that can support all sizes of companies with the talent, technology, and resources they need for business,” Higgins said.

‘Mental Health: Mind Matters’ Exhibit Makes it OK to Talk about Mental Health

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A new, interactive exhibit focused on raising awareness about mental health is now open at the Rochester Art Center. “Mental Health: Mind Matters,” hosted by Mayo Clinic, and presented by Olmsted Medical Center and Rochester Area Foundation, create a safe space for important conversations about mental illness.

Nearly 1 in 5 adults in the U.S. lives with a mental illness, according to the National Institute of Mental Health. The rate may be even higher in Olmsted County, Minnesota. Nearly one-third of Olmsted County residents experienced a mental health condition in 2016, according to the county’s Community Health Needs Assessment.

“Mental health plays a key role in our overall health. Mental illness is common, treatable and a health issue that we as a community should be discussing,” says Bruce Sutor, M.D., a Mayo Clinic psychiatrist. “Mayo Clinic is pleased to host this exhibit, which not only gives visitors a chance to learn more about mental health, but also helps connect them to valuable mental health resources in the community.”

“Mind Matters: Mental Health” uses immersive experiences and multimedia activities to help build understanding and awareness about mental illness. Visitors will be able to see how mental illness has been treated in the past and learn what it is like to live with a mental illness, such as depression, anxiety and post-traumatic stress disorder. A resource center provides information on local mental health resources.

In an accompanying art exhibition, “Making It OK: Art, Bravery and Mental Health,” four Minnesota artists reveal, with honesty and hope, what it means to live with mental illness or be affected by close family members struggling with mental health issues. This exhibition includes paintings and drawings, sculpture, participatory art, comic books and video.

“Mental Health: Mind Matters” at Rochester Art Center is open to the public Tuesdays through Saturday through September 10. There will be a $5 admission for adults. Children 15 and younger are free. Tickets can be purchased ahead of time on the Rochester Art Center’s website.

The Musicant Group Expands to Rochester

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Max Musicant, Principal Placemaker & Meghann Southwick, Community Event Manager

The Musicant Group, a design, property management, and event planning firm, has officially expanded into Rochester, Minnesota, the group’s first location outside of the Twin Cities. They will manage and activate One Discovery Square, the recently opened life science center in Destination Medical Center’s Discovery Square, creating events to connect building tenants with the external community.

“We are here to build upon our initial consulting for the building and to foster events, experiences and an environment that builds relationships between Mayo Clinic, the Rochester community, and the broader business and medical worlds,” says Max Musicant, Principal Placemaker at The Musicant Group. “Now is a tremendous time to be in Rochester, with more exciting activity occurring than in any other city in Minnesota.”

In addition to managing One Discovery Square, The Musician Group will curate onsite amenities and building features, create inter-building management systems, and provide events for the building’s tenants, the public, and third parties wishing to rent venue space within the building.

Musicant opened its office in Rochester to develop a presence and begin to build relationships within the community after being hired by One Discovery Square developer, Mortenson. The team recently hired Community Event Manager Meghann Southwick to help expand their local capacity. Southwick has held several event and membership management positions with both the Rochester Downtown Alliance and the Rochester Area Chamber of Commerce.

The Musicant team is beginning to create events specific to One Discovery Square, which includes a mix of both social and professional programming. “People should expect something that’s very community driven and focused on collaboration and sharing of ideas,” notes Southwick. “Relationships are so important to this type of ecosystem.”

“The Musicant Group’s engagement in One Discovery Square further distinguishes this as a one-of-a-kind place in Rochester,” says Chris Schad, DMC Director of Business Development – Discovery Square.

One Discovery Square, located at the intersection of 4th Street SW and 2nd Avenue SW, is now welcoming tenants, with a grand opening community celebration planned for September.

Rochester Leaders See Affordable Housing Success During DMC Site Visit to Twin Cities

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As Rochester moves into the next phase of the Destination Medical Center (DMC) journey, it’s fortunate to have a wealth of experience and expertise in handling rapid growth practically on its doorstep: The Twin Cities metropolitan area is an acknowledged national leader in mounting the challenges of bringing new kinds of affordable housing into reality.

And not coincidentally, that’s also a key aspect of the DMC effort to transform Rochester into a world-class magnet for healthcare and an economic driver for the entire Minnesota economy. One of its aims is to create a vibrant, walkable downtown core with a variety of housing options, including workforce and affordable housing.

Although that goal is by no means easy to attain, it can indeed be accomplished with determined efforts, “community buy-in” and a healthy dose of collaboration among all the various civic stakeholders, according to some of the most important movers and shakers behind the recent evolution of Twin Cities’ affordable sector. These front-line veterans gave their advice and analyses to a group of Rochester leaders during a June 4 DMC site visit to the Twin Cities.

For example, former Deputy St. Paul Mayor and current DMC Corporation board member Paul Williams teamed with Gretchen Nicholls, a program director for the Twin Cities Local Initiatives Support Corp. (LISC), to describe how affordable housing was integrated early into the “big picture” of the Green Line light rail transit corridor. The venue for this discussion was Hamline Station, a two-building development that opened along the corridor in 2015 with more than 100 efficiency, one-, two- and three-bedroom apartments affordable to residents earning 50 to 60 percent of the median area income. 

Nicholls told of how the Twin Cities office of LISC, a nonprofit dedicated to providing financing for nearly every aspect of affordable housing, took the point position on “The Big Picture Project,” which began in 2012 as a cross-sector partnership aimed at a more coordinated approach to affordable housing development along the 11-mile line connecting the downtowns of Minneapolis and St. Paul. Through the effort, some 4,820 affordable housing units were newly constructed or preserved, surpassing a goal of securing 4,500 affordable units by 2020.

The Rochester contingent also visited the Lowertown neighborhood, where they heard of how artist-specific affordable housing can act as a catalyst for broader development and tax-base growth. At the Northern Warehouse Artist Lofts, leaders of developer Artspace conducted tours of the historic building’s attractive home/studio units and described how a cluster of similar affordable artists’ residences helped transform a once-desolate section of downtown St. Paul into a magnet for nightlife and private-sector multifamily housing investments. Lessons from the Twin Cities’ experience in developing affordable housing around a new transit project came in both big and small perspectives and was a valuable learning opportunity for the Rochester contingent.

Anna-Maria and Stephen Kellen Foundation’s $32 Million Gift Advances Mayo Clinic Research

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By permission of Mayo Foundation for Medical Education and Research. All rights reserved.

A generous $32 million gift from the New York-based Anna-Maria and Stephen Kellen Foundation will enable Mayo Clinic to expand its research mission with the construction of a four-story, 64,000-square-foot research building in Rochester.

Planning for the Anna-Maria and Stephen Kellen Building is underway, with groundbreaking expected in 2020 and occupancy in 2022. The building will be located just north of Mayo Clinic’s Opus Building, which is on the corner of Fourth Street Southwest and Fourth Avenue Southwest in Rochester.

“We cannot overstate our gratitude to the Anna-Maria and Stephen Kellen Foundation,” says Gianrico Farrugia, M.D., Mayo Clinic’s president and CEO. “Research is critical to infusing new knowledge into patient care. It paves the way to solve serious or complex medical challenges for our patients at Mayo as well as patients around the world. This remarkable gift will allow us to meet a critical need for research space on our Rochester campus.”

The gift was directed to Mayo Clinic by Michael M. Kellen, foundation president, and Marina Kellen French, vice president. Their parents, Anna-Maria and Stephen Kellen, now deceased, received care at Mayo Clinic for decades, and that trust and care have continued into the next three generations. Stephen M. Kellen was president and CEO of Arnhold and S. Bleichroeder Inc., an international investment firm based in New York, now known as First Eagle Investment Management LLC.

“Our family’s history with Mayo Clinic spans more than four decades, and the physicians and staff at Mayo have become like family to us,” says Marina Kellen French. “We are thrilled to be able to support Mayo and be part of advancing medical research that will help patients for decades to come.”

The Anna-Maria and Stephen Kellen Foundation has been a significant contributor to Mayo Clinic over many years, funding various initiatives and projects in support of Mayo Clinic’s highest priorities. The foundation also has supported the Dr. Richard F. Emslander Professorship at Mayo Clinic College of Medicine and Science in recognition of the care that Richard Emslander, M.D., provided to the family over many years.

“Medical research has always been a strong interest of our family,” says Michael M. Kellen. “We are pleased that this gift will address a high-priority need at Mayo while honoring our parents’ legacy in a visible and meaningful way.”

The Anna-Maria and Stephen Kellen Building will add to the Discovery Square sub-district in downtown Rochester. Discovery Square is the research, innovation and development hub of the $5.6 billion Destination Medical Center (DMC) initiative.

“The new Anna-Maria and Stephen Kellen Building will bring more Mayo Clinic expertise to DMC’s Discovery Square and complements the unique entrepreneurial environment of the subdistrict,” adds Lisa Clarke, executive director, DMC Economic Development Agency.

Decisions regarding specific use and occupancy of the new building will be made as part of the planning process this year.

Rochester’s Geneticure Sees Growth and Opportunity

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Scott Snyder
Eric Snyder

Founded by Rochester brothers Scott and Eric Snyder in 2014, Geneticure is a precision medicine startup aimed at reducing trial and error for treatment of hypertension patients.

Geneticure’s technology examines specific segments of patient DNA taken from a mouth swab to determine which medications will be most effective for that patient.

“Geneticure’s premise is built on the fact that we think large diseases and dangerous diseases can be better treated by using genetics to guide medicine and therapy,” said Geneticure CEO Scott Snyder. “There are clues in your DNA that will predict how you will respond to certain medications and therapies.”

Since the launch of the business over four years ago, Geneticure has now grown to a team of twelve, split between scientific and business development leads. While their focus remains on hypertension, the startup has additional products for different diseases in their development pipeline. Snyder said the business has been intentionally quiet for the past few years while validating their original hypertension product through clinical trial work. Now, Geneticure is gearing up to commercialize their solution to reduce trial and error for treatment of hypertension patients.

“We spent four years building evidence and so we are proud of what we’ve built. Now we want to tell people about it,” explained Snyder.

As companies like Geneticure launch and grow in Rochester, there are more opportunities to access local capital. Geneticure has secured investment support from the Rochester Area Economic Development Inc. economic development fund and from the Southeast Minnesota Angel Fund.

While Geneticure’s team is spread all over the country, they have a large presence in both the Twin Cities and Rochester. The business began their journey in Rochester at the Mayo Clinic Business Accelerator. After graduating from that space, they moved to a new location in “The Vault” above Grand Rounds Brew Pub in Destination Medical Center’s Discovery Square subdistrict.

Snyder said Rochester has a lot of benefits of a bigger city but is easy to navigate.  And most exciting for Snyder and Geneticure is the growing entrepreneurship and “diversity of thought and people.”

One Discovery Square Aims to Foster Innovation

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Finance & Commerce – by William Morris

Even in a digital era, Rochester and Mayo Clinic leaders think the best way to foster innovation, collaboration and new discoveries is to put people next to each other, face-to-face.

That’s the vision behind Golden Valley-based Mortenson’s One Discovery Square, a 90,000-square-foot biomedical sciences building in downtown Rochester that next month will welcome its first tenant, medical software company Epic. The $35 million project is one of the early cornerstones of the Destination Medical Center redevelopment initiative, which seeks to attract $5.5 billion in new development around Mayo Clinic over 20 years.

During a preview tour of the building Wednesday, officials touted a design aimed to boost collaboration, from an open lobby area that can double as a lecture theater to conversation niches and “living room” areas, some with whiteboards and other tools, scattered around the four-story building. Collaboration also was at the core of how officials marketed the building, Destination Medical Center executive director Lisa Clarke said.

“We will be bringing companies to this community that have never seen Rochester before,” she said.

Collaboration was also a goal in how the building will bring together those tenants, including three different Mayo Clinic departments, said Chris Schad, director of business development for the Discovery Square subdistrict of the Destination Medical Center.

“Right from the beginning, it was a fairly easy decision to say those three groups are going to be on different floors. They’re not going to be all bunched up in one space behind closed walls,” Schad said.

Instead the three teams – advanced diagnostics, biomedical imaging and regenerative medicine – will have space on floors two, three and four to be closer to partner companies that will occupy space immediately next to the researchers and scientists.

The space can also be reconfigured as needs change. Jay Hesley, chief of staff at the University of Minnesota Rochester, said the university’s space on floors one and three will meet short- and long-term needs.

“We absolutely needed a solution to lab space this year in order to continue to grow at the pace we were projecting. This space coming online in the fall is perfectly timed,” he said, noting that some space currently planned for classrooms has the needed equipment to become additional lab space in future years. “This is actually space that we think of in terms of decades providing services and solutions.”

The Destination Medical Center master plan calls for 2 million square feet of additional research and lab space over 20 years, and the organization lists Mortenson’s building as “Phase One.” Jeremy Jacobs, the company’s director of real estate development, said Mortenson is very interested in continuing work in the Discovery Square area. “We think there continues to be robust demand in the market,” he said. “The type of space the market is looking for is changing, so it’s office, it’s lab, it’s tech-based space, and we wouldn’t be doing our jobs as developers if we weren’t thinking about how to meet the needs of the market…In the not-too-distant future, I think that we would certainly hope to have another building that we could talk about.”