The Enterprise Institute and Prairie Winds Capital, LLC recently held a joint ribbon cutting and open house alongside the SDSU Foundation in their Sioux Falls location at 201 South Phillips Avenue, Suite 110. The ribbon cutting celebrated the membership of all three organizations in the Sioux Falls Area Chamber of Commerce.

The capacity crowd of nearly 200 area business and community leaders had an opportunity to network and learn about the Enterprise Institute’s mission to support and foster entrepreneurs as well as the aim of Prairie Winds Capital to invest in regional, high-growth start-up companies. Prairie Winds Capital is a South Dakota RAIN ®fund (Regional Angel Investment Network) and they are assisted in their administration by the Enterprise Institute.

Together the Enterprise Institute and South Dakota Rain Funds hope to build the equity capital infrastructure and impact local economic development resulting in job creation and successful businesses in the state.

( Brookings , S.D. – February 2008 ) – A group of angel investors and RAIN Source Capital have formed a new RAIN angel fund, SDSU/Brookings Angel Fund, LLC, in Brookings, S.D. SDSU/Brookings Angel Fund is capitalized at $1,000,000 and has 18 members, including local angel investors and Minnesota-based RAIN Source Capital, which have pooled their investment dollars to create the fund. The fund will invest primarily in regional companies located in Brookings and the tri-state area of South Dakota , Minnesota and Iowa .

Duane Sander, retired Dean of SDSU Engineering Department, co-founder of Daktronics and founder of the Enterprise Institute is serving as the fund’s Chair. “The SDSU/Brookings Angel Fund gives entrepreneurs and university-based technologies an opportunity to be connected to capital. RAIN ® funds will assist in strengthening our region’s equity infrastructure and help foster growth oriented, innovative economic development.”

Angel investors, typically defined as individuals with annual income exceeding $200,000 and/or having a net worth of more than $1 million, are often self-made, cashed-out entrepreneurs who have capital and business experience, and are interested in helping other companies to grow. In 2005, angels invested $23.1 billion in 49,500 U.S. businesses.

Marcia Hendrickson , director of South Dakota ’s Enterprise Institute, was actively involved in organizing SDSU/Brookings Angel Fund and will provide local administrative services throughout the life of the fund. “We are delighted with the formation of SDSU/Brookings Angel Fund which is the second RAIN ® fund formed in South Dakota . We found the RAIN ® fu nd model very easy to use and can understand why the number of funds being formed using this model is growing so rapidly.”

SDSU/Brookings is the 22nd RAIN ® fund to be formed through RAIN Source Capital, which includes a multi-state network of angel funds. Each individual RAIN ® fund determines what industries it will focus on, and the type and level of financing to provide, based on the interests and expertise of its members. The RAIN ® funds are also able to draw upon the expertise, experience and deal flow from across the network. In addition to investing in local companies, SDSU/Brookings Angel Fund may also co-invest with other RAIN ® funds . Brian Johnson, executive vice president of RAIN Source Capital, said, “We are very happy to have formed the second RAIN ® fund in South Dakota . SDSU/Brookings Angel Fund, like all RAIN ® funds , drew its members from prominent business leaders in the area. These members will pool their money and expertise to help promising companies grow into successful businesses.”

Fund members play an active role in selecting and screening companies for potential investment, as well as monitoring company performance. In addition to being an active investor in SDSU/Brookings Angel Fund , RAIN Source Capital also provides a process for due diligence, legal templates, management support and other resources.

SDSU/Brookings Angel Fund has already made seven investments and is actively screening other companies that are seeking an equity investment. Companies interested in being considered for equity funding may contact Marcia Hendrickson , at the Enterprise Institute at (605) 275-2833.

About RAIN Source Capital
RAIN Source Capital is a multi-state network of RAIN â funds that works with angel investors who are interested in supporting growing companies. RAIN Source ® helps bring together like-minded angel investors to form individual RAIN ® funds - and then provides these funds with additional capital, a process for due diligence, legal templates, management support, access to deal flow and other resources. RAIN ® funds share expertise, deals and experience between and among RAIN Source Capital’s multi-state network of RAIN ® funds , to support growing companies throughout the area. RAIN ® fu nds range in size from seven to 61 members, who have pooled anywhere from $500,000 to $2 million. RAIN Source Capital is based in St. Paul , MN . Brian Johnson , executive vice president of RAIN Source Capital, is a business graduate of the University of South Dakota . He can be reached at (651) 632-2143.

About Enterprise Institute
The Enterprise Institute is a non-profit corporation that provides customized assistance to inventors, entrepreneurs, and researchers to commercialize their innovation. EI has been developing angel networks in the state and region as well as offering services to assist the development of growth enterprises. Marcia Hendrickson, Executive Director, is a CPA and microbiology graduate of SDSU. Marcia is the South Dakota agent for the RAIN®funds in South Dakota. She can be reached at (605) 275-2833.

The registration fee is $30 through Feb. 26 or $35 after that date. Student admission is $10 through Feb. 26 or $15 afterward. Find details online and register at the SDSU Cooperative Extension Service website.

Cheri Rath, executive director of the Value Added Agriculture Development Center and one of the conference organizers, said the sessions offer farmers and ranchers a perspective that goes beyond production of ag commodities and into processing of niche products.

Registration starts at 9:30 a.m. and the conference begins at 10 a.m. with a session on starting a group business venture. At 11:05 a.m., the topic is third-party certification for labeling.

After an 11:45 lunch, a panel examines “Buy fresh, buy local for South Dakota.” Afternoon sessions deal with niche market co-ops and finding unique commodity markets.

Round table discussions with speakers and participants follow. Options for discussion include niche market co-ops, finding unique commodity markets, specialty co-op business structures, organic sustainable markets and “Buy fresh, buy local for South Dakota.”

Tuesday, February 19, 2008
by: Wolf, Greenfield & Sacks, P.C.
http://www.ipfrontline.com/depts/article.asp?id=17586&deptid=2

Solid patents give entrepreneurs freedom to operate, help prevent others from horning in on their space and provide credibility with investors. A poor intellectual property (IP) strategy can severely, even fatally, weaken a startup’s position from both offensive and defensive standpoints, said Douglas R. Wolf of Wolf, Greenfield & Sacks, P.C.

The Boston IP law firm sponsored a seminar featuring leading Massachusetts IP lawyers, tech entrepreneurs and investors.

Given a limited budget and fast-moving technology, which items do you chose to patent and when? “Entrepreneurs have the fewest resources to devote to IP tools, but this is the time when much intellectual property is being generated,” Wolf said.

Start by understanding the problem your company is trying to solve and where it will stand in the marketplace—and share that information candidly with your IP lawyer, Wolf Greenfield’s Edmund J. Walsh said.

An IP lawyer who’s savvy about your technology and thinks strategically about your business can work with you to manage legal costs while your business is developing, and yet put in the foundation for an IP portfolio that will serve you well when your business takes off, he said.

“There are also ways to use the patent system strategically, to defer costs and put off making final IP decisions until your business is more established,” Walsh said.

Investors want to be assured that your company will have a sustainable advantage. “And they also want to minimize the risk their money will be wasted on fights over patent infringement,” Wolf said. An aggressive patent-filing strategy gives the entrepreneur powerful ammunition on both points, he added.

Besides protecting your own intellectual property, you can’t afford to waste resources developing technology that someone else already owns. “Thinking about what differentiates your business from your competitors is important for building your business, but it can also be a key part of building your IP portfolio,” Walsh said. “A good IP professional should be able to meld your business insight with legal tools to build your intellectual property portfolio.”

Jan 23-29, 2008
Sioux Falls Business Journal

by: Marcia Hendrickson, director of the Enterprise Institute

Successful organizations come in many sizes, ranging from traditional lifestyle businesses to high-growth entities. Understanding growth potential is essential for the entrepreneur early in the development of any business.

High-growth companies require the entrepreneur to dedicate a great deal of time and energy to developing them. It takes both passion and high degree of commitment. These companies have a higher potential reward, but they also come with a high degree of risk.

Entrepreneurs need to consider early in the process what level of risk they are willing to accept, how much capital they have to invest and their time commitment.

They also need to consider their experience and knowledge in the chosen industry. Entrepreneurs need to be aware of their own strengths and weaknesses that could affect their ability to grow the company. Most growth-oriented entrepreneurs understand they need to develop a team to accomplish their goals.

Not everyone is comfortable with high-growth businesses and the demands that are put on the individuals involved. Lifestyle businesses are setup and run by the founders to allow the owners to enjoy a particular lifestyle. The founders frequently need to balance other priorities in their life such as family responsibilities or recreation.

Typically, these companies have a limited potential for growth by design and a smaller target market. Lifestyle companies can require less capital infusion and time commitments from their owners.

Regardless of size, entrepreneurs in the gestation and inception phase of development for their business need to research the industry in which tie are interested to determine if they have the skills needed to enter the market.

Do people recognize the need to buy the new product or service? Can the new company contend with competitors already in the marketplace? Does the founder have the skills to launch the company or is licensing the bet option? Are the needed resources available to launch a company?

Extensive research is essential in this stage. Even though the grown potential is monitored throughout the life of a company, this is the stage at which the decision is made as to whether it will be worth the effort to pursue the market.

Early stage companies need to be aware of the risk of not setting and meeting appropriate milestones. It takes business experience, judgment and flexibility to resolve these problems quickly. Incubators, mentors, angel investors and other industry experts can help with prototyping, business planning and organizational structure. If the wrong, strategy is employed at this stage, the company may not make it to the growth phase.

The potential growth rate of a company should be established early and revisited as business and market conditions change. Data should be used to establish the possibilities for the products and services that are being marketed. Targets can be set from the data that are generated from researching competitors.

Internal data such as accounting records and external data on market conditions should be monitored over time and adjustments should be made to the plan.