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Best State to Start a Business

When it comes to finding a community that supports and empowers entrepreneurs and small businesses, look no further than the Twin Cities and surrounding suburbs. Nationally recognized as the place where business starts and thrives, the Minneapolis-St. Paul metro area has the 4th highest concentration of small businesses in the nation, making it the 3rd “Best State to Start a Business” (Entrepreneur.com).

The area’s library systems have long been important resources to enriching life. A new video series called Libraries out Loud out of Kansas City explores how libraries are adapting to the needs of today, including finding ways to support local entrepreneurs. It is not much different in the Twin Cities where in a collaborative effort to support the growing entrepreneurial population, the James J. Hill Center provides resources complimenting the offerings at neighboring libraries.

The Hill often works together with Hennepin County Library and St. Paul Public Library to provide the best business information for entrepreneurs. This has always been part of the Hill’s mission. In our first year in business, head librarian Joseph Pyle explained in the 1921 Librarian Report, that James J. Hill intended for the library to “pick up where the public library ended,” which is exactly where our mission falls today. We fill in the gaps with our unique programs and resources.

On Monday, Aug. 21 from 5:30-7:30pm, Lindsey Dyer (JJHC), Erin Cavell (HCL) and Amanda Feist (SPPL) from our three area libraries will conduct a presentation called “Fill in the blanks of your business plan: getting started with research,” hosted by George Latimer Library.  This presentation will share resources, tips and tricks to navigate the best that our metro libraries have to offer.  SIGN UP NOW to join this informational free event.

Written by Lindsey Dyer, Director of Library Services, James J. Hill Center. If you have more questions about the reference library at the James J. Hill Center please contact 651-265-5500 or hillreferencelibrary@jjhill.org.

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Helping Food-Delivery Services Get a Seat at the Table

Leah Kodner, Business Librarian from the James J. Hill Center interviews 1 Million Cup presenters each month for the Startup Showcase feature in the Pioneer Press.  Recently she connected with presenter Luke Katuin. See interview as seen in the Pioneer Press Startup Showcase on August 12, 2017.

The 2016 “eServices: Food Delivery” report by Statista Digital Market Outlook found that the food delivery market is expected to have a higher growth rate in the United States than in any other country, with a 24.6 percent increase in revenue and a 22.9 percent increase in customers expected between 2016 and 2021.

The food delivery market is hot right now. Luke Katuin felt that the growth in the industry was allowing large companies to block small, local delivery companies from the market. He created Table.delivery to unite these small delivery companies and over 9,000 restaurants under one platform, allowing users to choose from a variety of food and delivery options while getting locally managed customer service.

ENTREPRENEUR PROFILE

Name: Luke Katuin
Age: 35
City you live in:
 Eden PrairieAge: 35
City of birth: Garner, Iowa
High school attended: Garner-Hayfield High School, Garner, Iowa
Colleges attended: Waldorf College, Forest City, Iowa, and Minnesota State University Mankato

COMPANY PROFILE

Name of company: Table.delivery
Website: www.table.delivery
Business Start Date: November 2016
Number of Employees: 8
Number of Customers: 50+ delivery services, more than 9,000 restaurants, and even more hungry people

What led to this point?
I have spent over 20 years in the food industry. My company was a member of the Restaurant Marketing and Delivery Association, which is where we decided to band together and bring change to the evolving restaurant delivery industry.

What is your business?
Table.delivery is a food delivery platform. Table brings together all your favorite restaurants and the local delivery service teams that really focus on the customer. It’s a one stop shop for ordering, customer service and price comparison. You know what you are getting when you order on Table.

Where do you go for help when you need it?
Our company has over 20 partners that are industry experts. Collectively we have well over 100 years in the industry. Through our partners, we are able to craft our future with the best minds possible.

What is the origin of the business?
We started to notice a trend. Venture capital funded companies were expanding into our territories by collaborating with our local delivery companies to gain access to more restaurant menus. Once they had a sufficient amount, they would then bring in their own drivers and start using the data we provided them to squeeze out the local delivery guy. At our annual Restaurant Marketing and Delivery Association meeting we decided that we needed to adjust. These companies were not just squeezing us out but they were also misleading when it came to pricing and you could only contact them via social media. We felt that local teams could better provide the service that food deserves. Food is very intimate and thus should be treated appropriately. However, it was difficult to accomplish this with many local teams being spread about the country. Thus, we formed Table in order to unite these small local delivery teams. It gives us the ability to create one national presence to represent each other while keeping the customer service and last mile where it belongs, with teams that are actually in each market, teams that have been doing this for decades in some areas.

What problems does your business solve?
We noticed that large VC-funded companies were lacking in that local customer service that we all strive for. Our goal was to create a site where all of our local delivery teams can control and utilize their strengths appropriately. A site that utilizes strong and responsive customer service when it really matters, not in a day or two via Twitter  Normally when you use those larger delivery companies, you don’t even know who the last mile is being provided by. There is a general lack of information and price discrepancies. With Table we bring together the very intimate customer service focus that is desired while being up front with our partners and our prices.

Where did you pivot in your company’s journey? What big obstacle or hurdle did you have to overcome?
I think our biggest obstacle is exposure. Typically, when a service begins, they start in one central area and expand from there. We took a different route and had 40+ markets on day one. Our biggest challenge is getting the word out to everyone in all our markets without having to raise millions of dollars to do so.

What personal strengths or skill sets do you bring to the business?
I think my biggest strengths are my ability to work within a team and my refusal to give up. This has never been about one person getting rich or one company. We are the best we can be when we do things together. When you are dealing with people in multiple states, that can be difficult but I will press on, we deserve nothing less.

What are you most proud of?
We are by no means complete or have everything figured out but to get this far is amazing. When you are working with thousands of restaurants, multiple partners in multiple states, it’s a daunting task. This type of project has been attempted in the past but has always failed.  Getting this far just fuels our desire to continue our work and make this the greatest food delivery platform in history.

What obstacles must you overcome to be wildly successful?
Data will be vitally important. When going against companies that have raised hundreds of millions of dollars, we must use data to make sure we go in the right direction. Data in combination with our industry experience will help us greatly. Our greatest obstacle is getting our message and our brand out without needing to raise millions of dollars.

How are you funding your business — organically, angel or VC investments?
We are funded almost entirely organically to this point. We’re currently involved in raising $250,000. To date, we have raised about half.

What would be success for your business in the next 2-3 years?
In two to three years we should see our company expanding in our current markets. There is no reason we should not be doing exponentially more than we are at this point.

In your opinion, what does it take to be a great entrepreneur?
Perseverance is the number one thing you need. There will be many more “no’s” then there are “yesses.” This can often lead to the feeling of being alone or isolated. Every failure is a learning point and can make your successes that much sweeter.

What is your business model and how do you make money?
We are transaction-based. Every order we process at Table, we take a small portion and remit the rest to our partners.

What haven’t we asked you that we should understand about your business?
Why start a food delivery platform when there are many out there? While new technology and apps are great, the biggest thing they are missing is the managed delivery and customer service. This is what our customers recognize and what keeps them coming back.

Why do you do what you do? What is your “why,” your purpose?
This probably sounds silly, but I do this for all my delivery service partners. I have seen some of the fantastic things they do. I have watched them at conventions and on personal levels really striving to serve customers better only to be squished out by giant companies who operate in some ivory tower in another market. That can be a bit soul crushing and so I go to work every day and do whatever I can do so that they can continue being the best in the industry. It is not about how much money you have, it’s about the service you provide. Taking care of the customer, being local and engaged in your community. That’s who I fight for. That’s who I care the most about.

How did 1 Million Cups St. Paul help you? Did you get valuable feedback? Did you get connected to resources? Did you pivot because of the experience?
1 Million Cups has been great. The feedback we have gotten and the support is amazing.  I highly recommend it to every business.

You can hear from startups like this one each Wednesday, 9-10 a.m. at the James J. Hill Center during 1 Million Cups St. Paul. The James J. Hill Center is a nonprofit in downtown St. Paul that provides access to business research, educational programming and a place to work. The Hill is open to the public 10 a.m.-5 p.m., Monday-Thursday. To keep updated on what startup is presenting next or to apply to present, visit www.JJHill.org.

 

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They’ll help local investors buy local (businesses)

Leah Kodner, Business Librarian from the James J. Hill Center interviews 1 Million Cup presenters each month for the Startup Showcase feature in the Pioneer Press.  Recently she connected with presenter Patrick Saxton. See interview as seen in the Pioneer Press Startup Showcase on July 30, 2017.

MNstarter

Equity crowdfunding allows entrepreneurs to sell private securities in their company to investors. These offerings are usually restricted to large “accredited” investors who meet certain wealth and income standards. Now, Minnesota has made it possible to sell these securities to any resident of Minnesota. The MNvest law, which went into effect in June 2016, makes it legal for businesses to release equity crowdfunding offerings to Minnesota residents regardless of their wealth. Patrick Saxton saw the opportunities that this new law provided and formed MNstarter to help businesses launch successful equity crowdfunding campaigns.

ENTREPRENEUR PROFILE

  • Patrick Saxto
  • Age: 35
  • City you live in: White Bear Lake
  • City of birth: Blue Earth, MN
  • High school attended: North St. Paul
  • Colleges attended: Graduate of Metropolitan State. Attended University of North Dakota, Drake University, and Century College

COMPANY PROFILE

  • Name of company: MNstarter
  • Website: www.mnstarter.com
  • Business start date: September 2016
  • Number of employees: 5 co-founders and 1 intern

Q&A

What led to this point?
I worked with the Department of Veterans Affairs, first as a business analyst in the benefits division, then as the primary Information Security and FISMA policy writer for 23 regional offices. I spent my remaining time in government working at the Small Business Administration (SBA), helping entrepreneurs start and grow their small businesses and working to expand SBA’s reach in Minnesota. I am now working as a software engineer and completing my degree in computer application development at Metropolitan State University.

What is your business?
MNstarter is a public benefit corporation whose mission is to grow Minnesota companies through local investment. MNstarter is a registered MNvest portal operator and advocate for capital crowdfunding.

MNstarter offers free access to the MNstarter.com MNvest crowdfunding portal along with best practice guides for self-service capital crowdfunding campaigns. It also offers access to the MNstarter Resource Library, which is an organized group of “resource partners” who can work directly with entrepreneurs to navigate legal, finance and marketing considerations to get their capital campaigns set up.

Where do you go for help when you need it?
We go to the MNstarter Resource Library and the folks at MNvest.org, the outreach and advocacy group for the MNvest legislation.

What is the origin of the business?
MNstarter was started after I watched a 1 Million Cups presentation at the James J. Hill Center by Zach Robbins and Scott Cole. I went back to our office and started to talk about the MNvest law and over the next few weeks we had a core group of us that were ready to make MNstarter a real company. About three months after we started, Judy Wright, our fifth and final founder, found us on the internet and emailed us the same week we had decided to go looking for a finance specialist to round out our group. Since then, the five of us have been working to help Minnesotans find ways to meet their business and investment goals.

What problems does your business solve?
MNstarter solves the need created by new Minnesota MNvest legislation that permits intrastate investment crowdfunding through securities offerings exempt from Securities Act registration. The MNVest law allows companies to sell equity in their companies to Minnesota residents. Minnesota residents not considered “accredited investors” have equal opportunity to invest in these offerings. Under most federal rules, non-accredited investors would not have this opportunity. This creates a larger pool of possible investors. It also gives all Minnesotans the opportunity to invest locally.

MNvest went into effect in June 2016, and requires that these MNvest “offerings” must be made online through a “MNvest Portal” registered with the Minnesota Department of Commerce.

Lots of times we hear “buy local”. At MNstarter, we like to say, “buy local (businesses).” CLICK HERE FOR FULL ARTICLE


Interviewer: Leah Kodner
Business Librarian, James J. Hill Center

You can hear from startups like this one each Wednesday, 9-10 a.m. at the James J. Hill Center during 1 Million Cups St. Paul. The James J. Hill Center is a nonprofit in downtown St. Paul that provides access to business research, educational programming and a place to work. To keep updated on what startup is presenting next or to apply to present, visit 1millioncups.com/stpaul.

 

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Soft Skills Revolution: Finding Soft Skill Value

Chris Carlson is an entrepreneur, actor,  lawyer and the founder of NarrativePros dedicated to coaching stronger connections. Chris is setting the standard for soft skills training across the region and will be sharing his tips and tricks in our monthly blog Soft Skills Revolution. Come back the first Tuesday of each month and learn key steps to unleash your efficiency, effectiveness and maximize your input.

FINDING SOFT SKILL VALUE

I used to have a hard time finding my keys. Then I bought this little plastic disk that my phone can make beep. They’re usually sitting right on the counter, hidden in plain sight.

A recent survey of 2.6 million employers reported that 59% have difficulty finding candidates who are proficient in “soft skills.” I believe that soft skilled people are really not that hard to find. They just need to tag their skills with the equivalent of that beeping disk.

Making your own soft skill set “beep” out begins with understanding why they’re “soft”, what are the skills and the value to employers.

The Soft
Among the most sought-after soft skills are the “4 Cs”: Critical Thinking, Communication, Collaboration and Creativity.

The term soft skills was originally defined by the Army in 1972 as

“Job functions about which we know a good deal are hard skills and those about which we know very little are soft skills.”

From the beginning soft skills have been associated with misunderstanding.

One of the biggest insights to soft skills is how little we know about them and ourselves. Studies like Sage Journals “Perceived Versus Actual Transparency of Goals in Negotiation” have shown how we believe others see us and what they actually perceive are statistically unrelated. The only accurate way to gauge how you’re being perceived is to ask someone else.

And yet, as Seth Godin points out “what actually separates thriving organizations from struggling ones are the difficult-to-measure attitudes, processes and perceptions of the people who do the work.”

The Skills
In that aptly titled post, “Let’s Stop Calling Them ’Soft Skills,” Godin argues that the term should be avoided:

“We call these skills soft, making it easy for us to move on to something seemingly more urgent. We rarely hire for these attributes because we’ve persuaded ourselves that vocational skills are impersonal and easier to measure.”

He feels that they are more accurately understood as “real skills” because of their impact on businesses:

“…when an employee demoralizes the entire team by undermining a project, or when a team member checks out and doesn’t pull his weight, or when a bully causes future stars to quit the organization — too often, we shrug and point out that this person has tenure, or vocational skills or isn’t so bad. But they’re stealing from us.”

He then goes on to list nearly 100 different skill sets in five categories that make up his first draft of real skills.

The Value
Godin’s argument carries significant weight when you consider how reliant the economy is on soft skills. Three decades ago 83% of the value of an S&P 500 company was in its tangible assets—real estate, equipment, inventory. Today 87% of the value is in intangible assets—ideas, brand, or stories.

Companies that had paid workers to build value with their labor now pay them to create with their minds. The majority of companies’ value can no longer be delivered by trucks. Instead, the majority of worth is created, transmitted and maintained through soft skill mastery.

Developing mastery is also hiding in plain sight. The process is the same one practiced by athletes, artists and entrepreneurs.

More on that later. I have to find my phone.

To be continued….

Guest writer: Chris Carlson
Visit @NarrativePros for more information.

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Startup Secrets and Sh#$ to Know: Tips To Get Rich Quick!

Aleckson Nyamwaya has his beat on the pulse of the startup world in MN.  He is an Associate at @gener8tor, contributor for @startupgrind, ambassador for @1millioncupsspl and a lover of all things tech & startups. We are pleased to have his monthly insight with our blog “Startup Secrets and Sh#$ to Know.”  Check back each month for his thoughts, observations and featured companies.

Tips To Get Rich Quick!

There are many ways of getting rich, but even fewer legal ones. As a middle class american, getting rich has always been part of the dream – along with a “white picket fence.” So how do you get rich quick in the next 4–7 years?

“The key is to get on the cap table of high growth startups”

High growth startups are companies such as Snap, Blueapron and Uber on the earlier stage and Google, Facebook and Amazon on the later stage. Imagine if you had equity in the companies listed above from when they were just infants, you’d be a millionaire!

Below I’ve identified four ways to get on the cap table of high growth startups so you can not only get rich, but also quickly! This guide is for both non-accredited and accredited investors alike.


1. Entrepreneur

The surest way to make money quickly, and by quick I mean 3–5 years, is by launching your own company and becoming an entrepreneur! Along with making money, you would hone in on essential entrepreneurial skills needed to thrive in the future. Beware, entrepreneurship is hard, you will fail, but that is how you succeed. If you consider yourself risk averse, 2 & 3 are still viable options for you!

2. Employee

Joining a high growth startup is a great method to get on the cap table especially if you consider yourself risk averse. As an early employee, you will have the opportunity to not only invest in early employee stock options, but you will also have the opportunity to gain expertise in your field allowing you to lead your division as the company scales (i.e. VP, CMO, CTO, etc)! This can be difficult though because the most meaningful (unicorns) startups tend to huddle in silicon valley or Stockholm. You’d have a difficult time in other cities such as New York, Chicago, Minneapolis, Austin or Boston.

3. Consultant

If you don’t want to be an employee, you have the option of selling your services as a consultant. A tactic I’ve seen work is to get paid in half cash and half stock options that vest month over month. Be careful though because if done wrong, people will think you’re a “culture vulture” in sinking your teeth into startups. Start with value first by offering high quality unsolicited services. You can easily hit singles and doubles over 5 years of consulting for equity!

4. Angle Investing

With the advent of REG D equity crowdfunding, anyone can angle invest, non accredited and accredited alike! A great way to start is by joining a syndicate on angels list led by an experienced angel! WARNING Invest no more than 5% of your net-worth and be ready to LOSE IT ALL!


Good luck in your journey of chasing the good ol’ american dream! I hope this article was able to shed some light on new paths of attaining your goal!

If you found this useful, please share so others can get this information!


Guest writer:  Aleckson Nyamwaya
To sign up for his monthly tech newsletter CLICK HERE.

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Startup Day Across America: Get Involved

James J.  Hill Center has been supporting Minnesota innovators for 96 years by connecting business, entrepreneurs and community to research, knowledge and network.  According to the Bureau of Labor Statistics, firms less than one year old created 1.7 million jobs, or 60% of total employment growth, in 2015. More than half these jobs were from firms with fewer than 10 employees.  The startup companies we support are involved in a variety of industries including technology, retail, healthcare, food and beverage, education and more.

On August 1, 2017, members of Congress have been invited to celebrate the ingenuity and entrepreneurship taking place right in their own cities. Startup Day Across America connects elected officials with startups in their communities so they can learn about the challenges new companies face and meet the business leaders building the future.

This bipartisan, bicameral effort also raises awareness and helps generate support for startup communities across the country.  Last August marked the third annual Startup Day and Minnesota’s Senator Al Franken participated.

Each startup organization has withstood the challenges and obstacles of entrepreneurialism, and many continue to grow, foster job creation and improve our economic ecosystem.

August 1st is an important day for all entrepreneurs – successful, new, struggling or persevering.  This is a time when you get to show them what is needed, what steps should be taken and what change needs to be made.  This is a time for your voice to be heard and celebrated.

If your startup is interested in participating, contact your local representative and request a visit. Work with Startup Day 2017 and make it happen.  We don’t get opportunities like this all the time.

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A Safe Space to Grow

Pew Research Center’s fall 2016 analysis on Internet and Technology finds that “people think that libraries are a major contributor to their communities in providing a safe place to spend time.” There are few public “safe spaces” out there that provide a welcoming, neutral and resource filled environment like libraries. So how does this translate to a space like the James J. Hill Center, where entrepreneurs come to network, research and build their business?

The Hill is historically known as the James J. Hill Reference Library. Regardless of the name change, the heart of the organization has been, is and always will be the library. We are one of those “safe spaces” dedicated to creating a place where business professionals and innovators can make mistakes, test ideas and take risks – a place to grow.

Walk in the door, and you’ll experience the business neutral environment – you don’t need to have an established business to use our resources. We are that safe space for the seed level start-up, and even before then in the exploratory phase. According to Pew Research, there is an increase in the need for those experts or guides (we like to call them librarians!) to identify information that they can trust – in 2016, 37% of people said that libraries play a role in helping to identify this trusted information, up from 24% in 2015. This will only grow, as Google provides a starved environment for data you can bring to a board or potential investor, and boards and potential investors demand more data to support risk taking opportunities.

Starting a business or changing careers can put you in murky territory, but our business librarians at the Hill Center are here to help. Our librarians are on-hand to navigate not only the exclusive databases that can be accessed here for free, but also to help seek out other free resources that can be accessed from anywhere. The Hill is a safe space to try something on for size, reach for your dreams and find your potential – and as your guide we promise to give you our honest, expert opinion.

Written by Lindsey Dyer, Director of Library Services, James J. Hill Center. If you have more questions about the reference library at the James J. Hill Center please contact 651-265-5500 or hillreferencelibrary@jjhill.org.

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The Evolution of Embossers

Of the many changes that our library has seen over the past century, one that is easy to overlook is the way we mark our books. When we first opened, our librarians embossed each new book they added to the collection. Labels on the embossing stamps show we were still embossing books into the early 1970’s. Sometime thereafter, we began instead to mark our books using ink stamps.

We recently uncovered several of our old embossing stamps, and our librarians are going to start using them again. There are several benefits to embossing as opposed to ink stamping. Firstly, inks can negatively affect paper, making it degrade over time, whereas embossing only adds an indent or small holes to the paper and therefore does not cause as much long-term damage.

Secondly, embossed books are harder to steal than books stamped with ink, because the skilled thief can laboriously remove traces of ink, but the only way to remove traces of embossing is to remove the embossed page itself. And finally, aesthetics. Embossed books look and feel nice. There is a timeless feel to them, something that brings to mind classic libraries with beautiful old books. In addition, an embossed stamp looks the same every time, whereas ink stamps often appear messy.

For all these reasons and in deference to our history, we are going to bring our embossing stamps out of retirement. Stop by sometime to see some of our new materials, embossed as of old!

The story of these tools and the epic building will be further explored in the Cabinet of Curiosity Tour every third Thursday at 10:30AM. Go back in time in this one hour tour, up and down the catwalks and through the vault in a nooks and crannies inspired experience.  Our June tour sold out, so get your tickets early!


The oldest embosser, which creates a raised impression of our corporate seal.


The corporate seal created by the oldest embosser.


The newest embosser (really a perforating stamp), with a 1971 note instructing librarians to stamp the page after the title page of a book.


The perforated stamp.

The ink stamp currently used by librarians, which marks the date as well as the name of the library.

Ink stamps create a less aesthetically pleasing stamp than embossers or perforators.


Written by Leah Kodner, James J. Hill Business Librarian. If you have more questions about the reference library at the James J. Hill Center please contact 651-265-5500 or hillreferencelibrary@jjhill.org.

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“Wait Training”: How it all Started

Junita Flowers is a writer, speaker, entrepreneur, mom and the owner of Favorable Treats. With more than 20 years of experience working with nonprofit organizations, she spent her career advocating for families and leading social change initiatives. Junita is starting a blog series with the Hill, called ‘Wait Training’. Over her career, Junita has learned the value of “waiting” with her business and is looking forward to sharing her experiences.


I’ve known I wanted to be an entrepreneur since I was a little girl. I didn’t know all it entailed, but I was always intrigued with the idea that if something didn’t exist, an entrepreneur could just create it. I had several business ideas throughout my childhood, each always associated with food or coffee.

I began my ‘official’ entrepreneur journey in 2006 when I launched Favorable Treats, a Minnesota-based mission driven cookie company. Though the idea of a cookie company is founded upon my best childhood memories, the road to success has been shaped by my most difficult experiences as an adult.

My journey as an entrepreneur is best described as one of resilience, patience and strength. Due to a tumultuous marriage, I stopped and restarted my business three times over ten years. I’ve learned the value of personal hardship, which provided the unexpected benefits of lessons and training that positively impacted my business.

Through this blog, I will share the ups and downs of starting a business, and what it takes to be successful in the hopes that I can translate some of my “waiting” into “training.”  I will share the resources that have helped me, the bumps along the way, the characteristics I have found important to acquire and big decisions made during this process.  All of these stories and personal anecdotes are meant to inspire, invigorate and build this incredible ecosystem of small businesses and entrepreneurs we have surrounding us.  So, join me on this journey and check in the second Tuesday of each month for a little bit of ME and some WAIT TRAINING. 

You can read more about Junita Flowers on her website at favorabletreats.com. You can also follow her on Facebook and Instagram.   In addition we are pleased to have Junita join us at the  James J. Hill Center on August 10th from 9AM to 10AM  as she moderates our TAKING THE LEAD panel discussion focusing on the complex and rewarding ecosystem of women entrepreneurs.  This month’s topic will be on the “Financials of Business.” This program is free and open to the public.  RSVP NOW

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Startup Secrets and Sh#$ to Know: Crowd Funding

Aleckson Nyamwaya has his beat on the pulse of the startup world in MN.  He is an Associate at @gener8tor, contributor for @startupgrind, ambassador for @1millioncupsspl and a lover of all things tech & startups. We are pleased to have his monthly insight with our blog “Startup Secrets and Sh#$ to Know.”  Check back each month for his thoughts, observations and featured companies.

How Equity Crowd Funding Is Going To Change The Minnesota Startup Eco-system

“97% of Americans couldn’t invest in early-stage startups, due to the SEC’s regulation on early stage finance.”

Early stage investing used to be reserved only for accredited investors. That is, individuals who have a net worth of $1M, or have an annual income of $200,000. That all changed in June of 2015, when MNVest went into effect. MNVest is a law that allows the average Minnesotan, regardless of their income, net worth or socioeconomic status to invest in early stage startups in exchange for equity. Read more about the MN Vest law here.


This is wonderful news for the Minnesota startup ecosystem because it gives us a fair shot at becoming industry leaders, in solving tough problems that affect the whole of humanity such as space travel, famine and climate change – just to name a few. This has been made possible due to two side effects of equity crowd funding. The first being a vastly diverse pool of investors and second, a low barrier of entry to starting a business. 


“The problem lies within who is giving the money, and who is receiving the money”

Diversity of investor pool 🏊🏼‍

Diversity in startup financing is broken. The problem lies with who is giving the money, and who is receiving the money.

This lack of diversity in investment has measurable economic effects. Mickinsey & Company reports that “companies with more diverse workforces perform better financially.” Social effects cannot be ignored either. 43% of venture-backed startups are in the software industry with biotech following in at just 12.6 %. This is not representative of the problems humans face across the globe. Crowd funding utilizes this potential that otherwise would have been wasted.

Low barrier to starting a business🔐

Crowd funding also lowers the barrier of entry to starting financially. It makes it a great way to raise a pre-seed/seed capital for people such as myself, who may not necessarily have that “friends and family” network. It also serves as a great platform to launch and finance your MVP, all while getting valuable feedback from customers. Small scale & less venture back-able initiatives also benefit from crowd funding in that they now have an alternative to the usual funding sources such as VCs, banks or angels.

Conclusion

I’m excited to see where this crowd funding journey leads us as a community. Hopefully we will see a rise of startups that tackle more challenging problems due to a more diverse set of investors and underrepresented groups getting access to capital.

Featured Resource:

New Lion Labs: a development, design, UX & product strategy firm that will help your new ventures thrive all while being cost-effective. Find more resources like this here 

Guest writer:  Aleckson Nyamwaya
To sign up for his monthly tech newsletter CLICK HERE.

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IMPORTANT NOTICE:

We are pleased to announce the completion of our elevator renovation at the James J. Hill Center. This project was financed in part with funds provided by the Arts and Cultural Heritage Fund through the Minnesota Historical Society and the F. R. Bigelow Foundation. It will greatly increase our ability to serve patrons with accessibility needs.

Please access our ground floor elevator entrance via Kellogg Ave at the back of the building. Please ring the doorbell on the right hand side of door and a Hill staff member will assist you. If you have questions or concerns please call 651.265.5500. We look forward to having you visit our brand new elevator!

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