Spring 2007 Newsletter

Happy Spring from the members of the Dakota Venture Group! In case you haven’t heard, the Dakota Venture Group (DVG) is a University of North Dakota student managed venture capital fund that was founded in September of 2006 by a donation from Bart and Lynn Holaday through the Dakota Foundation. DVG is one of only a few student managed venture capital funds in the United States. DVG is unique because it is currently the only fund where students complete all due diligence, make the final investment decision, and negotiate the deal’s term structure. By participating in the Dakota Venture Group, UND students receive an unheard of opportunity for experiential learning in the field of venture capital and angel investing. The investment strategy of DVG includes making investments in high-growth ventures started by entrepreneurs in Minnesota and North Dakota. DVG also has a priority to invest in companies started by UND students and alumni. All investments are made with the goal of fostering regional economic growth. Inside this issue: Future goals of DVG are to involve 25 additional UND students in the managing and funding process as well as offer students internships in finance, entrepreneurship and marketing, a final goal is to raise a total of $5 million to be invested through the fund. Meet the DVG 2 Board Members DVG New Members Portfolio Addition DVG Advisor Spotlight Sponsors 2

Volume 1, Issue 1 May 2007

“My wife Lynn and I want to give students the opportunity for hands‐on  learning from investing in startup ventures to train both aspiring venture  capitalists and emerging entrepreneurs who need to know what it takes to  attract equity investments.” ‐ Bart Holaday, Founding Benefactor 

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Announcing the DVG For-Profit Fund
This spring DVG will be seeking investors for its new for-profit venture capital fund. DVG was founded as a non-profit evergreen fund that would grow based on donations from benefactors and returns on investments. After several inquiries and requests from potential investors DVG has decided to create an additional for-profit fund for accredited investors. As Ben Olson, DVG managing director explained, “It’s exciting and scary to have a for-profit fund; if we invest in a venture and suffer a loss, it’s going to be our necks on the line.” For information on becoming a DVG investor or benefactor contact Lee Groeschl at lgroeschl@dakotaventuregroup.com.

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Meet the DVG Managing Board of Directors
The managing directors of DVG come from a variety of academic backgrounds and were recommended by UND faculty to found and organize DVG in October 2006. Each director utilizes their entrepreneurial and investment experiences to contribute to the overall success of the fund. Lee Groeschl, President, is an MBA student at UND, focusing his studies on entrepreneurial finance. Originally from Fond du Lac, WI, Lee is a finance and investment consultant at the Center for Innovation who is currently working to start his own venture. Amy Indridason, VP of IT and Operations, is an MBA student at UND, where she also received a BBA in Information Systems. Amy has a passion for growth within the region which was fostered by growing up in rural Cavalier, ND. Will Kusler, VP of Finance is an MBA student, focusing his studies on risk management and real options. Will was raised in Kulm, ND, which has led to his desire for economic regional growth. Will also received a BBA in Financial Management from UND. Ben Olson, VP of Business Development, is a senior accounting and entrepreneurship student at UND. Ben is from Apple Valley, MN and is currently working on starting a company, which allows him to understand the perspective of entrepreneurs seeking funding. Shannon Pearson, VP of Marketing, is an MBA student who will be focusing her studies on creating a new valuation model for ND companies. Growing up in an entrepreneurial family in
Front L to R: Shannon Pearson, Amy Indridason Back L to R: Ben Olson, Will Kusler, Lee Groeschl

Minot, ND has allowed her to naturally be drawn to the opportunities associated with entrepreneurship.

Dakota Venture Group Introduces New Members
As a UND student organization it is important that DVG has a plan for succession and growth. Throughout the past three weeks DVG interviewed 15 UND student applicants. The applicants included Engineering, Law School, and CoBPA Graduate and Undergraduate students. In the end the following students were invited to join the Dakota Venture Group:

Mark Giese, Investments Nate Kenner, Entrepreneurship Grant Marquardt, Marketing and Management Matt Maurer, Entrepreneurship and Marketing Morgan Simonson, Entrepreneurship Kristine Svensoy, Entrepreneurship Martin Tatom, Management

Marcus Tibesar, Entrepreneurship Chris Virta, Law School Dan Waind, Marketing and Combined MBA Sterling Wiggins, Investments
The new members will gain first hand experience investing in start up ventures. Two of the students will also be completing an Entrepreneurship internship through DVG.
Spring 2007

Brian Berseth, Electrical Engineering
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Portfolio Update
The members of the Dakota Venture Group are proud to introduce the newest addition to the DVG portfolio: TheWineStandard.com, which was launched earlier this month by recent UND CoBPA graduate Tommy Leikas. Leikas graduated in December 2006 with a degree in entrepreneurship. Starting a company is a new direction for the former UND basketball player, who decided to give up his basketball career to develop a new venture. TheWineStandard.com is essentially a one-stop shop for wine accessories. Leikas currently offers about 200 items online and hopes to grow his product line to more than 2,000 items. The site specializes in high-end products such as wine openers, decanters and vacuum pumps. Featuring popular brands such as Bottega del Vino, Ravenscroft, Riedel, Waterford, Houdini, Rabbit, Screwpull and several others. But Leikas' plans don't specifically revolve around wine. He is entering the world of Internet marketing and a process called Search Engine Optimization, or SEO. Lekias originally researched more than 100 different markets, but settled on wine accessories because the topic is frequently searched on web sites such as Yahoo! and Google. "A major strength of the Internet is its ability to amplify the power of niche marketing," Leikas said. "Niche sites allow marketers to define themselves as experts in specific fields." ing a way to get the Web site a high ranking when those terms are used in an online search. "There's a real science as far as how your site ranks," he said. Leikas is following the footsteps of another UND graduate, Dan Thralow, CEO of Thralow Inc, who operates a number of Internet specialty stores that generated more than $26 million last year. He began with one Web site, Binoculars.com, in 2001. Visit www.TheWineStandard.com, The Source for Everything Wine. Tommy Leikas can be reached at 1-888-8782942.

In those specific fields, business success is related to ranking on search engines. For Leikas, the goal is to get TheWineStandard.com on the first page of Google when people type in specific keywords - an accomplishment he hopes will spark increased customer traffic on his Web site. "Customers don't find you unless you're on the first page of Google," he added. In order to get there, Leikas is currently studying SEO principles and applying them to his business. SEO involves identifying specific keywords and phrases related to a Web site and find-

DVG Advisor Spotlight
The student members of Dakota Venture Group are in a constant state of experiential learning, that learning is supported primarily in part by a strong base of advisors who boast several successes in starting new ventures, managing investments, angel investing, finance, and venture capital. Dr. Jeffery Stamp Dr. Stamp is an Assistant Professor and the Endowed Chair of Entrepreneurship and Innovation
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within the UND College of Business and Public Administration. He is an asset to the DVG students sharing his wealth of real world knowledge that has been developed through various entrepreneurial endeavors. In corporate life at Pepsi Co, Dr. Stamp was the inventor, creator, and brand manager of Frito Lay’s “Baked Lays.” He also has extensive experience in consulting, angel investing, marketing, and teaching. Dr. Stamp currently has several of the DVG students in an Entrepre-

neurial Finance course where the ins and outs of venture financials and venture capital are explored. Dr. Stamp’s infectious passion for business and creativity make this class a favorite of several students and his personality contributes to him being a highly sought after key-note speaker. Dr. Stamp is currently working with the DVG students to help them gain a stronger understanding on venture valuation methods.
Spring 2007

The Dakota Venture Group is one of the only venture capital organizations in the United States to be managed by students. DVG’s mission is to invest in start-up and early stage ventures throughout North Dakota and Minnesota with the ultimate goal of fostering economic growth throughout the Plains.

Center for Innovation 4200 James Ray Drive Grand Forks, ND 58203 Phone: 701.777.6053

We’re on the Web
www.DakotaVentureGroup.com

Sponsors
The members of DVG would like to welcome two new sponsors: First State Bank and State Farm Insurance Agent, Sharon Opdahl. DVG sponsors are a showcase of the region’s most esteemed businesses. Sponsor contributions are used to fund DVG administrative and operating expenses. Sharon Opdahl, an NDSU alumni, has been a State Farm Agent since 1989, she has qualified and received several
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awards including the National Quality Award. And she is a member of the National Association of Insurance & Financial Advisors. Sharon can be reached through the DVG website sponsors link or at www.sharonopdahl.com.

It also strives to offer all of the convenient and innovative banking services that today’s customers demand. Learn additional information about First State Bank at www.firststatebanks.com. DVG’s sponsors are also given substantial exposure to our portfolio companies in order to develop relationships and potential clientele. If you are interested in becoming a sponsor of Dakota Venture Group please contact Shannon Pearson at spearson@dakotaventuregroup.com.

First State Bank has been a part of the Red River Valley since 1885, with locations in Buxton, Thompson, and Grand Forks. First State Bank has made its mark as an agricultural bank, and still supports farmers today.

Spring 2007