First Minority-Owned Businesses Receive Equity Funding
Meda and Otto Bremer Trust collaboration provides minority entrepreneurs capital to grow their businesses
MINNEAPOLIS (December 22, 2017) – The Otto Bremer Small Business Fund, a new patient-capital fund run by the Metropolitan Economic Development Association (Meda) and supported by the Otto Bremer Trust (OBT), has made its first investments in two minority-owned early stage companies.
This form of funding is aimed at high-opportunity minority businesses that do not yet generate enough revenue to qualify for more traditional operating loans or credit lines. Recipients of these investments will have a longer timetable to deliver returns to the fund, thereby opening up greater flexibility to support long-term strategic decisions.
The fund, which provides capital for up to three years, was established with a $1.2 million commitment from OBT last year.
The first investments from the fund were recently made to Casa Travel & Technologies in Burnsville and Aucta Technologies in Minneapolis.
“Until now, access to patient capital has been largely nonexistent for minority business owners,” said Gary L. Cunningham, Meda president and CEO. “The Otto Bremer Small Business Fund is a new day for our area’s promising minority entrepreneurs. Now, they’ll have the means to create jobs and make the investments necessary to gain market traction. It will help seed economic growth and stability throughout our communities.”
To qualify for investments from this fund, companies must be in high-growth market sectors and offer unique solutions or new approaches on proven products or services. Meda also looks for founders who have invested their own capital in the business.
“We’re excited to support Meda’s efforts in this important minority business-funding initiative,” said Daniel C. Reardon, co-CEO and trustee, the Otto Bremer Trust. “We seek to provide unique and innovative ways to invest in entrepreneurs and economic development, and Meda is a strong resource for minority-owned businesses,” added Brian Lipschultz, co-CEO and trustee, the Otto Bremer Trust.
Funding recipient Carlos Lopez leads Casa Travel & Technologies, which serves travelers who lack access to traditional banking and credit products. His service creates and issues airline tickets at a discount, allowing customers to process tickets through money transfer services.
Daniel Romo, another funding recipient, co-founded Aucta Technologies, a medical device startup that uses innovative ultrasound nerve stimulation technology to help reduce blood sugar levels in patients with type 2 diabetes. He believes the equity funding will help Aucta raise more capital.
Meda will manage all aspects of the new fund, structure the transactions and provide technical assistance to the portfolio companies while consulting with the Otto Bremer Trust on fund strategy. Additional recipients will be announced throughout 2018.
Meda services include business consulting, financing solutions and corporate and government opportunities, such as contracts and funding opportunities. Since its inception in 1971, Meda has offered guidance to over 20,000 minority entrepreneurs and helped launch over 550 businesses.
About the Metropolitan Economic Development Agency (Meda)
Meda provides business consulting, access to capital and market opportunities for minority entrepreneurs. Meda also operates a business development center under cooperative agreement with the Minority Business Development Agency (MBDA) of the U.S. Department of Commerce. The Minneapolis MBDA Business Center connects Minnesota Minority Business Enterprises (MBEs) with business opportunities. Visit www.Meda.net.
About Otto Bremer Trust (OBT)
The Otto Bremer Trust, based in St. Paul, Minnesota, is a private charitable trust established in 1944 by founder Otto Bremer, a successful banker and community business leader. OBT owns 92 percent of Bremer Bank and also manages a diversified investment portfolio. The mission of OBT is to invest in people, places and opportunities in the Upper Midwest. Since its inception, OBT has invested more than $600 million in organizations throughout Minnesota, North Dakota and western Wisconsin. Visit ottobremer.org.