The Greater Minneapolis-Saint Paul region is a “headquarters economy.”
What does that mean? Put simply, the region is home to many corporate headquarters, from the highest concentration of publicly-traded Fortune 500 corporations to privately held companies, regional hubs, and North American headquarters of foreign corporations.
This presents a competitive edge for startups in MSP. Corporations can be early customers and investors. They can also support programs like startup accelerators and work together in specific industry clusters. Plus, they tend to attract top talent that can work with startup firms and even spin out to start their own ventures.
But how is our region taking advantage of this major asset today? A team of partners in the Forge North coalition set out to learn more. Leaders from GREATER MSP, the Medical Alley Association, EY, Target Accelerators, Xcel Energy, and other organizations worked with a team of graduate and undergraduate students from the Ventures Enterprise at the Carlson School of Management. Together, the team interviewed 31 of the region’s largest companies, all with annual revenues exceeding $1 billion.
Through this audit of large enterprises in MSP, the team sought to understand:
· Why large companies are motivated – or could be motivated – to work with startups
· What ways these companies are engaging with startup ventures today
· How engaged these companies are with startups today
· Perceptions of the MSP startup ecosystem among these large companies
· Opportunities to increase engagement with MSP-based startups, specifically
After engaging one-on-one with each company, this Forge North project team brought companies together to discuss themes, trends, and ideas. Among the findings:
· 6 motivations: The motivations of large companies vary, from establishing a more entrepreneurial culture, brand building, social responsibility, and financial returns. But the most highly engaged companies were typically engaging as an execution of their overall corporate strategy and to stay apprised of disruptive industry trends & technology
· 40%: Under half of companies reported a venture investing strategy, but the trend appears to be increasing. More than one-third of companies had made startup acquisitions and nearly one-third were formally involved in accelerator partnerships
· 70%:More than two-thirds of companies were categorized as “highly engaged” or“moderately engaged” with startup ventures across the globe in some formal way
· Companies identified shared motivations related to the Greater Minneapolis-Saint Paul region that transcend industry verticals, such as action on diversity, equity, and inclusion
· Entrepreneurs described challenges finding “the front door” to working with large companies, with barriers magnified for BIPOC founders. They also perceived or experienced greater risk aversion among MSP corporations versus those elsewhere
While this audit provided Forge North partners with baseline of understanding, the greater goal is to ensure every large company headquartered in the region becomes meaningfully engaged with local startup ventures through a variety of potential pathways.
To this end, one of the Forge North coalition’s priority projects is the development of a playbook for the region’s largest companies to increase their engagement in the local startup ecosystem. The playbook will be published this November at forgenorth.com by a project team led by StephanieRich of Bread & Butter Ventures and Techstars. They will use the playbook to track progress, trends, and partnerships on an annual basis.
Want to learn more? Watch the “State of Startup + Enterprise Partnerships in MSP” session by Forge North coalition partners at Twin Cities Startup Week.
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