Festival of Finance

For years, I had been itching to hang out all the way through the Collaborative’s annual Minnesota Venture Finance Conference, gavel to gavel. On October 10 and 11, the opportunity finally presented itself—and it did not disappoint. I came away with renewed confidence that the Twin Cities’ cast of entrepreneurs and supporting players is alive and well.

The Minneapolis-based Collaborative is an organization that promotes growth companies, and its two-day event has become Minnesota’s state fair of finance for entrepreneurs and their funders. Innovators from 50 companies made presentations: 19 for eight minutes, 30 for one minute. Panelists of venture capitalists discussed prospects for various emerging growth sectors. Exhibitors filled up an adjacent exposition hall with booths. This year, Mark Heesen, president of the National Venture Capital Association, delivered the keynote address. Some years, the governor speaks.

A common thread unites all of the entrepreneurs who presented at the Collaborative's Venture Finance Conference: They want to stay in Minnesota.

The networking opportunities are as good as they get, since virtually all of the region’s leading venture players or their surrogates come, as well as many entrepreneurs who presented at past conferences. The conference isn’t the only Twin Cities event that seeks to match up entrepreneurs with funders, but it is by far the longest running and most ambitious of them.

Dan Carr, president, CEO, and cofounder of the Collaborative, says this year’s turnout of 475 was the highest since 2000. The first such gathering, in 1987, drew 45. Since 1994, entrepreneurs from 235 companies have delivered the longer presentations, and 26 of those companies have since gone public. That includes Eden Prairie–based Compellent, which went to market the day before this year’s conference began. Numerous others have been acquired, some in very pricey deals. Many flamed out.

The Water Man Returns

Dean Spatz showed up as a panelist at the 2007 conference. In 1969, he founded Osmonics, which made high-tech water purification equipment and related products. Spatz took his company public in 1971 and eventually led it to a New York Stock Exchange listing in 1994. He seemed headed for the sidelines in 2003 when General Electric bought Osmonics for $275 million in stock, but Spatz and his wife owned about a sixth of the company when it was sold. That gave him ample resources to launch his own venture firm, Watasso Ventures, in Minnetonka.

Watasso has made eight investments since opening for business in 2003. Among them: Concise Logic, a software developer for the semiconductor industry that is moving from New Mexico to the Twin Cities. Watasso’s investments are all in non-water fields, but that’s likely to change now that Spatz’s noncompete agreement with General Electric has expired.

Spatz says consolidations such as the General Electric–Osmonics deal will lead talent to leave the big companies for water purification start-ups. He believes the Twin Cities could see as many as four of these start-ups over the next two years. As the world population increases rapidly, especially in emerging economies, demand for clean drinking water will grow accordingly, making water purification a promising industry.