The Government of Minnesota has taken dozens of initiatives to promote the Fintech ecosystem. Recently, The 2023 Minnesota Legislature reauthorized the Launch Minnesota Grant program and funded it at $3 million; $1.5 million for each fiscal year. These grants can further provide early-stage businesses for up to $35,000 for business operations.
However, it’s not just the government that is boosting the fintech sector.
In 2024, more than a hundred VC firms are investing in Minnesota’s Fintech sector. To make your research easier, we have prepared the following list of the top investors in Minnesota investing in the fintech sector.
Find Out The Top 6 VC Firms in Minnesota Who Fund Fintech Startups
| Investor Name | Focused Sectors | Funding Stages | Notable Investments | Total Investments |
|---|---|---|---|---|
| Matchstick Ventures | Fintech, Network Security, Software, Cyber Security, SaaS, Advertising,, | Early and Growth | BacklotCars, Ordermark, PrintWithMe | 100+ |
| Brightstone Venture Capital | Data Storage and Management, Virtual/Augmented Reality, AI/Machine Learning, Enterprise Security, Blockchain, | Early and Late | AtriCure, Cardiovascular Systems, Inc., EnteroMedics, Vital Images | 70+ |
| Arthur Ventures | Artificial Intelligence, Fintech, Machine Learning, Consulting, Developer Tools, Information Technology, InsurTech | Early and Growth | Branch, Kno2, Central Logic | 58 |
| Deepwater Asset Management | Financial Services, Fintech, Data Management Software, AI Platforms, Machine Learning Algorithms, Network Security Solutions | Early and Seed | CTRL-labs, Bloomscape, Tonal | 20 |
| Oxbow Industries | Manufacturing, Healthcare, Software, Energy, Finance | Growth/Expansion | Healthedge, Apitiv Solutions | Not specified |
| Stone Arch Capital | Business Products and Services, Consumer Products and Services, Financial Services | Growth | Lambent, Toysmith, Helix, ICS | Not specified |
Matchstick Ventures
- Contact: Connect with us (matchstick.vc)
- Website: Matchstick Ventures - Helping Startups Strike
- Focused Sectors: Fintech, Network Security, Software, Delivery Service, Cyber Security, SaaS, Security, Advertising, Marketing, Messaging, E-Commerce, Information Technology,, Enterprise Software, Food and Beverage, Supply Chain Management, Wine And Spirits, Charity, Employment, GovTech, Analytics, Business Intelligence
- Funding Stages: Early and Growth
- Present in: Minnesota
- Notable Investments: BacklotCars, Ordermark, and PrintWithMe
- Total Investments: 100+
Founded in 1985 by Michael Gorman and Jim Patterson, Brightstone Venture Capital has established itself as a stalwart in Minnesota's venture capital scene.
Moreover, the network typically invests in pre-seed and seed-stage startups. The firm prefers to invest in companies that are in their early stages of development but have already shown promising traction. The investment range of Matchstick Ventures lies between $500,000 and $1 million.
Brightstone Venture Capital
- Contact: info@brightstonevc.com
- Website: Brightstone Venture Capital | (brightstonevc.com)
- Focused Sectors: Data Storage and Management, Virtual/Augmented Reality, AI/Machine Learning, Enterprise Security, Blockchain, Cloud Infrastructure, Marketplaces, Regenerative Medicine, Stem Cell, Next Gen Diagnostics, Genomics/Gene Editing, Medical Device, Drug Discovery Tools and Platforms, Personalized Medicine
- Funding Stages: Early/Late
- Present in: North America
- Notable Investments: AtriCure, Cardiovascular Systems, Inc., EnteroMedics, Vital Images
- Total Investments: 70+
Brightstone Venture Capital is a Minneapolis-based venture capital firm that was founded in 1985. The firm was originally started by Michael Gorman and Jim Patterson, with a focus on investing in early-stage technology companies.
During the screening tests, the investors from Brighstone look for companies that have strong leadership, unique services, and significant market potential. They prefer startups that have scalable solutions and have demonstrated traction, typically through early revenue generation or customer validation.
Brightstone Venture Capital typically makes investments ranging from $2 million to $10 million.
Arthur Ventures
- Contact: info@arthurventures.com
- Website: Arthur Ventures | Arthur Ventures
- Focused Sectors: Artificial Intelligence, Fintech, Finance, Machine Learning, Consulting, Developer Tools, Information Technology, Information Services, InsurTech, Analytics, Personal Health, Clinical Trials, Life Science, Software, SaaS, mHealth, B2B, B2C, Collaboration, Developer APIs, Document Management, Messaging, Unified Communications
- Funding Stages: Early and Growth
- Present in: North America
- Notable Investments: Branch, Kno2, and Central Logic
- Total Investments: 58
Arthur Ventures is a venture capital firm founded in 2008 by Doug Burgum and James Burgum. The network is headquartered in Fargo and has offices in other states including Minnesota.
Like most other VC firms, Arthur Ventures focuses on supporting startups that aim to introduce revolutionary ideas to the fintech landscape. The founders invest in startups that understand consumer needs and are building sustainable solutions, helping them grow and scale in underserved regions.
Arthur Ventures has invested in over 50 startups. The firm typically invests between $2 million and $10 million.
Deepwater Asset Management
- Contact: info@deepwaterassetmanagement.com
- Website: Deepwater Asset Management (deepwatermgmt.com)
- Focused Sectors: Financial services, Fintech, data backup services, data management software, AI platforms, machine learning algorithms, natural language processing, network security solutions, data protection services, identity and access management
- Funding Stages: Early and Seed
- Present in: Minnesota
- Notable Investments: CTRL-labs, Bloomscape, and Tonal
- Total Investments: 20
Deepwater Asset Management was founded by Doug Clinton, Gene Munster, and Andrew Murphy.
Deepwater Asset Management is headquartered in Minneapolis, Minnesota, and focuses on investing in frontier technology companies. They are known for their forward-looking approach to investing; backing startups that are building the next wave of innovation in the tech industry.
Since its inception, Deepwater Asset Management has funded around 20 startups, targeting companies that are developing technologies that could shape the future of how people live and work.
The average check size of Deepwater Asset Management lies between $500,000 to $2 million.
Oxbow Industries
- Contact: info@oxbowindustries.com
- Website: Oxbow Industries - Crafting Business Success
- Focused Sectors: Manufacturing, Healthcare, Software, Energy and Finance
- Funding Stages: Growth/Expansion
- Present in: Minnesota
- Notable Investments: Healthedge and Apitiv Solutions
Oxbow Industries, LLC is a private equity firm founded in 2004 by Charlie Anderson. The firm is headquartered in Minneapolis, Minnesota, and focuses on acquiring and growing middle-market companies.
Unlike traditional venture capital firms, Oxbow Industries typically targets established businesses rather than startups. Oxbow Industries generally invests in companies with revenues between $10 million and $200 million. They look for profitable businesses that have scalable models, and demonstrate potential for growth through operational improvements, strategic acquisitions, or market expansion.
The average check size of Oxbow Industries lies between $5M to $30M, depending upon the business and estimated ROI.
Stone Arch Capital
- Contact: Contact Us - Stone Arch Capital
- Website: Home - Stone Arch Capital
- Focused Sectors: Business Products, Business Services, Consumer Products, Consumer Services, Financial Services, Healthcare, Energy, Materials, Resources, Information Technology, Manufacturing
- Funding Stages: Growth
- Present in: Minnesota
- Notable Investments: Lambent, Toysmith, Helix, ICS
Founded in 2003 by Thomas M. Shormann, Brian Slipka, and Patric Johansen, Stone Arch Capital, LLC is a private equity firm based in Minneapolis.
The firm focuses on investing in lower-middle-market companies across various sectors, with strong management teams to support growth through organic expansion and strategic acquisitions.
Stone Arch Capital typically invests in businesses with annual revenues between $20 million and $150 million. Their investment range lies between $10 million to $30 million in equity.
How Do VC Firms Make Money?
Aside from hedge funds or public funding, it sounds like a mystery where VC firms generate so much capital to invest.
Well, VCs rely on long-term gains from high-growth companies, and their profitability depends on both collecting management fees and striking a few highly successful deals.
In short, Venture capitalists have two main mechanisms.
Management Fees
Usually, VCs charge a 2% annual fee on the total capital raised for the fund. Although this isn’t their main source of capital, this fee helps cover the operational costs of the venture firm, including salaries and office expenses.
Carried Interest:
The majority of a VC's earnings come from 'carried interest,' which is usually around 20% of the profits from successful investments. If a startup is acquired or goes public, the VC realizes returns from the sale of its equity stake. These profits are then distributed to the firm's investors (Limited Partners, or LPs), with the VC taking a portion as carried interest.
However, the 20% isn’t a “set” or “identical” share for every VC firm. Different ventures have their own rules for setting the equity and these shares are discussed during the investor meetings.
Wrap-Up:
A perfect shortcut for securing an investment is pitching to the right people with a well-customized pitch deck.
While there might be tons of questions about how to find the right investors, we always recommend founders do comprehensive research. Know the portfolio companies, likes, and target sectors of your specific VC firms, to prepare the best pitch deck.
Good Luck with your startup journey!