Q1 Opens with a Bang; Angel Investment Tax Credit Uncertainty Threatens Future
$59.3M has been raised by 23 Medical Alley companies in the first quarter of 2017, the highest Q1 total in three years. Key Medical Alley sectors all produced recent records. Medical Alley bio pharma companies raised the most Q1 investment in six years ($8.3M), while medical device ($44.6M) and digital health ($6.3M) companies secured the most Q1 investment in three years. Early-stage investments were particularly strong in Q1, as the majority of investments (18) in Medical Alley companies were under $3M. Three companies secured deals between $3M and $7M and two companies secured deals greater than $7M.
The success of early-stage fundraising, critical to the future of Medical Alley, has continually been bolstered by Minnesota’s Angel Investment Tax Credit. In Q1 alone, the Angel Investment Tax Credit catalyzed nearly $1M in new early-stage investments in Medical Alley. Eight Medical Alley companies that originally benefitted from the AITC raised additional rounds in Q1 that exceeded $15M. These companies include 2016 MN Cup winner StemoniX, Ambent Clinical Analytics, Hennepin Life Sciences and POPS! Diabetes Care. Since the AITC’s 2012 inception, 115 Medical Alley health technology companies have participated and have generated more than $335M in investment. Unfortunately, the future of Minnesota’s Angel Investment Tax Credit remains uncertain. At publication, neither the Minnesota House nor the Minnesota Senate has included AITC in its funding bills for 2018.