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Feature Article-Seeding the Prairie-Minnesota Technology Magazine Online, Summer 2002 Page 3 of 6 <br /> discount, and rent may be paid with a mix of Seeing the Light <br /> cash and stock. Incubator companies also get Redwood Falls takes <br /> • access to equity capital through several area high-speed Net access <br /> funds, including the Anoka/Sherburne Capital into its own hands. <br /> Fund, the Elk River Investment Club, and the <br /> Central Minnesota Initiative Fund. Most Redwood Falls City <br /> importantly to Jenson, however, the incubator Administrator Jeff Weldon <br /> gives access to mentoring assistance from could see it coming. Despite <br /> Harlan Jacobs, owner of Genesis Business the solid economy of this <br /> Centers, a Columbia Heights firm that helps county-seat community of <br /> n serious Redwood Falls was <br /> high-tech start-ups gain access to capital. "iSays Jenson: "He helped me figure out how e danger of <br /> p g becoming road-kill on the <br /> to organize my company, both legally and information super highway," <br /> administratively." says Weldon,who also is <br /> director of the city's Port <br /> Cymbet received $350,000 initially from local Authority. <br /> investors to develop Jenson's idea-a thin-film, <br /> solid state battery with a nearly infinite About three years ago, <br /> number of recharge cycles. Jenson used Weldon and other city <br /> battery chemistry developed at Oak Ridge officials participated in a <br /> Business <br /> Expansion <br /> Laboratories in California to create program on <br /> Retention and Expansion <br /> the process, which has potential applications offered by the University of <br /> for such products as hearing aids and cellular Minnesota.As part of the <br /> phones. In 2001, the company received $4.5 program,extensive <br /> million in venture capital from Israeli and interviews were conducted <br /> Finnish investment groups, which allowed it to with more than 70 members <br /> develop a manufacturing process for the of the business community. <br /> batteries. Cymbet also moved out of the "That's where we got teed <br /> incubator into a larger space in Elk River. The up on this issue,"says <br /> next stage, says Jenson, is to attract about Weldon. <br /> • $10 million in private funding to begin The city's elected officials <br /> manufacturing. The company hopes to knew Redwood Falls would <br /> complete most of that placement by the end not be competitive in the <br /> of this year, he says. future unless residents and <br /> businesses had high-speed <br /> Elk River's incubator, which costs the city access to the Internet. First, <br /> about$50,000 a year to operate, provides the city tried to convince its <br /> startup companies with the right sets of tools, in telephone provider to bring <br /> says Jacobs. Nonetheless, he also cautions in thelcableing necessary,webut <br /> Y its pleadings went <br /> that city leaders sometimes think all they unheeded.Then Weldon <br /> need to provide is a space for companies and and the town's council <br /> a phone line. "That is a small part of the started looking at the cost of <br /> recipe for success," he notes. "What these the city wiring itself and <br /> start-ups need first is access to seed capital operating a municipal <br /> and a mentoring program. And for high-tech telecommunications <br /> startups, they need to be the right kind of company."We knew that <br /> mentors." some cities had done this <br /> successfully, but that some <br /> had not,"says Weldon. But <br /> High-tech companies also need individuals before those discussions <br /> with experience in cutting-edge technologies concluded, a council <br /> and new companies. The seed capital should member learned that New <br /> be private, says Jacobs, because nearly all of Ulm Telecom Inc., a regional <br /> an early-stage tech company's costs are phone company based in <br /> "soft," such as expenses for patent attorneys New Ulm,was doing <br /> and trade shows. "Sometimes these <br /> overbuilds in some of its <br /> companies need a couple of million dollars to communities.After a year of <br /> roll the dice on an idea," he adds. "You can't talking; Redwood Falls struck a deal. <br /> do that with state money, but you can do it <br /> with money from wealthy individuals and The overbuild,which will be <br /> private sources." completed this summer, <br /> involves a combination of <br /> http://www.minnesotatechnology.org/public ations/magazine/2002/Summer/feature_s eeding.a:... 8/16/02 <br />