GRAND RAPIDS (AP) -- The Blandin Foundation has tapped $2 million from its endowment to invest in a nonprofit venture-capital organization specializing in rural Minnesota businesses.
Minnesota's "attraction of venture capital is well behind the national average," Wade Fauth, a senior program officer for the foundation, said Wednesday. "If you look at rural Minnesota, that gap is even broader."
So the foundation has put the money into Minnesota Investment Network Corp., a 1998 spinoff of Minnesota Technology Inc., that calls itself "the only equity fund in Minnesota that focuses on rural business opportunities statewide."
Fauth said the investment comes from a "philosophical discussion" that asks whether foundations should do things with their endowments, as opposed to the earnings from them, to further their overall missions.
Steven Mercil, MINC president and chief executive, said the nonprofit is capitalized at about $14 million and aiming for $20 million long term. It also is funded by major banks, a federal community development program and Minnesota Technology, which is a state economic development program.
"There are many Minnesota companies with great growth potential that are often overlooked by traditional venture firms because of their size, location or stage of development," Mercil said. "In rural areas, people are less familiar with this type of investing and how to do it."
The nonprofit said it already has provided more than $11 million in revolving equity funding to 24 businesses, mostly in rural Minnesota.
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