Michael Gorman is a long-time investor in Twin Cities startups, but he’s known for putting far more than money into Minnesota’s entrepreneurial community.
As founding managing director at Split Rock Partners, Gorman provided capital to several successful Minneapolis-based companies, including SPS Commerce Inc., Calabrio and Minneapolis-based Code42. He’s also been a dedicated advocate for Minnesota entrepreneurs, serving as an adviser — both formally and informally — to startup leaders; speaking often at events; and serving as an early sponsor of tech organizations such as Minne*.
Split Rock’s present fund will be its last since the firm’s partners decided not to raise another one together. They’ll continue to manage and invest in their portfolio of 18 companies. Gorman hasn’t decided what will be next for him, but says he’ll remain active in the business community.
“I’m planning to continue to be engaged and participate in the entrepreneurial economy in some manner,” he said.
Gorman grew up in Rochester, where his father was a physician at Mayo Clinic. His parents came to the United States from Northern Ireland. Mayo’s high standards and reputation have inspired Gorman throughout his career.
“Mayo isn’t just a great health care system in Minnesota, it’s as good as it gets in the world. I had the opportunity to see world-class things happen here.”
Gorman attended Duke University and joined Bain & Co. after college. He entered the world of venture investing during a graduate-school internship at Harvard Management Co., which oversaw Harvard’s endowment. His role included working with the teams that made direct investments in startups.
Gorman got his first full-time job as a venture capitalist in 1995 at St. Paul Venture Capital, which at the time was part of St. Paul Cos. (now Travelers). Split Rock Partners raised its first independent fund in 2005, after St. Paul Venture Capital split into two entities. Split Rock went on to raise two funds worth $575 million.
Gorman jumped into the tech and VC world amid the dot.com boom and learned lessons from watching its bust.
“You saw business models that endured versus those that were purely a creature of the bubble environment. It was an extraordinary education.”
During his career, Gorman has watched and supported companies as they went through that cycle. He’s also learned from some of the investments he didn’t make.
Split Rock passed on investing in Compellent Technologies Inc. based partly on guidance from an outside expert. Compellent eventually went public before being sold to Dell Inc. Gorman said the experience taught him the importance of focusing on management teams, including entrepreneurs like Compellent co-founder Phil Soran.
Overall, Gorman is an entrepreneur-friendly investor and board member who’s advised some of Minnesota’s most successful founders, said Chris Heim, CEO of software company HelpSystems. Split Rock Partners has invested in several of Heim’s ventures, including HighJump Software and HelpSystems.
“He’s supportive, but he’s not a pushover,” Heim said of Gorman. “He doesn’t try and run the business, but he provides insight and asks good questions. You’d be hard pressed to come up with anyone who’s had a bigger impact on Minnesota technology.”
While venture capitalists can support startups, Gorman said those who lead startups deserve credit for success.
“The people who are the heroes in the entrepreneurial stories are always the entrepreneurs.”
MICHAEL GORMAN
Founding managing director, Split Rock Partners
Hobbies: Golf, indoor cycling, tennis, reading
Education: Bachelor’s degree, economics, Duke University; MBA and law degree, Harvard University
