• A 1987 legislative special session helped Minnesota retain homegrown giants, and today the Twin Cities rank No. 1 per capita for Fortune 500 HQs, creating a deep managerial bench and a dense market of enterprise customers for startups.
• The Nasdaq Entrepreneurial Center’s ARIE report flags MSP as a top performer for producing high-growth entrepreneurs relative to size, with “procurement-as-capital” as a standout strength.
• The next step is expanding pre-seed checks and small-ticket lending, pairing cash with procurement “sandboxes” that speed pilots, and fast-tracking translational funding and spinouts.
On June 25, 1987, Minnesota’s governor convened a one-day special session, called at the request of a Minneapolis retailer, to respond to what state leaders described as an emerging crisis: a wave of hostile takeovers sweeping corporate America.
Lawmakers moved quickly, passing legislation inspired by recent neighboring state bills that stymied further consolidation. Critics called the bill anti-business, and argued that Minnesota’s economy would fall behind if corporate consolidation was made more difficult.
Nearly 40 years later, the Minneapolis–St. Paul region has more Fortune 500 companies per capita than any other large metro area in the country.
The Twin Cities’ “headquarters economy” has contributed to a flourishing of experienced managerial talent, maintained a high number of big enterprise customers for local startups and served as a case study for economic development leaders to continue to prioritize homegrown entrepreneurship.
New research makes that clear. A November 2025 report published by the Nasdaq Entrepreneurial Center featuring analysis by Heartland Forward marked the Twin Cities region as one of the country’s highest performers for developing high-growth entrepreneurs relative to size. One of the region’s particular strengths is, as the report puts it, “procurement as capital.”
Current landscape: Strong capital access, with early stage as the pinch point
Greater MSP, the region’s primary economic development organization, tracks economic conditions with a pro-entrepreneurship regional dashboard. It mirrors much of what the new national report spots. The region has a prosperous, highly educated labor market and progress in startup activity growth. But there are also signs that new-firm formation and tech job growth require ongoing commitment. Ecosystem efforts have worked, but risk defaulting to big-company incumbency.
This fall’s Advancing Regional Innovation Economies (ARIE) framework from the Nasdaq Entrepreneurial Center emphasizes how mid-sized regions win: by knitting universities, corporate anchors and founder communities into inclusive capital pipelines.
That’s the playbook local economic leaders in the Twin Cities have demonstrated, from inclusive monthly organizer calls to to talent initiatives — but the data suggests there’s room to press on the gas.
Some of the strengths and challenges highlighted by the research:
- Human capital depth: Median household income is about $95k, about 14% higher than the national average. Labor force participation tops 70% (8 points above average), and employment rates for women and people born outside the US are No. 1 among peers.
- A platform for durable firms: Nearly 46% of adults hold a bachelor’s degree or higher; that’s 20% above the national rate. Five-year business survivorship sits above 54%, about 2.5 points higher than the US average.
- Innovation + corporate scale: The region logs nearly 5 patents per 1,000 workers, $22B in exports and $1.47B in annual venture capital — a sign of R&D depth and late-stage capital access.
- Slower new-firm and tech growth: New establishments per 1,000 residents and yearly tech-job growth rank near the bottom of peers. Bank lending to sub-$1M-revenue firms lags, too. These are signals that earliest-stage dynamism is the pinch point.
Next steps: Weave corporate R&D with startup formation and market the region’s inclusivity
This region already acts like a coalition city; universities, philanthropy and corporate anchors convene well. The next step is aiming that coordination squarely at the first mile of company creation: pre-seed checks that de-risk early hires, procurement “sandboxes” that speed pilots, and translational funding where the region is strongest (medtech, food/ag, advanced manufacturing).
Economic development boosters should track time-to-pilot, number of enterprise-startup deals and angel participation as closely as jobs.
There’s a cultural note here, too. The Twin Cities don’t trade in swagger; they trade in throughput. For founders, that can be an advantage. It means buyers who know what problem they want solved and leaders who’ve shipped at scale. It also makes for a perception gap where the startup scene looks quieter than it is. The Nasdaq Entrepreneurial Center ARIE report suggests publishing stories about wins, not just intentions, as a way to elevate the region.
Some specific steps leaders can take, from the report:
- Double-down on founder pathways, not just talent attraction. The data implies that the region does a good job converting educated talent into jobs, but is less so at translating that education into new companies. To change that, expand pre-seed capital and lending for sub-$1M-revenue firms, and pair the cash with procurement pilots so first customers come faster.
- Leverage cluster efforts to spawn spinouts. Tie university labs and corporate R&D more tightly to startup formation in medtech, food/ag and advanced manufacturing. The region already has a few strong models, including Forge North and MBOLD.
- Market the region’s inclusion edge as a growth asset. With leading employment rates for women and foreign-born workers, the region can brand itself as the place where diverse founders build durable companies, and back that with inclusive capital programs.
The overall takeaway is simple: The same long-term instinct that kept companies rooted in Minneapolis–St. Paul four decades ago can power a more visible, faster startup flywheel today, IF enterprise demand is treated like capital and IF early-stage finance is made easy to navigate.
That anonymous 1987 retailer that called for Minnesota state action to thwart a hostile takeover? It’s the company that grew into Target, the $40 billion retail giant.
Most of the region’s giants are homegrown, not poached. And that shows why it’s important to prioritize startups and small firms when they don’t yet matter on a grand scale. Given time and the right on-ramps, they will become the next anchors of a headquarters economy.
Four decades after that special session, the charge is familiar: adapt quickly, execute well, and let today’s founders become tomorrow’s Fortune 500s.
Download the report to see more of the metrics and actions that can make this path possible.
