Five Exits, One Partnership: The Playbook Behind Minnesota’s Quiet Power Duo

Scaling a business to exit is rare. It’s even less common to do it twice, let alone a third, fourth, and fifth time, all with the same founding team. Unless you’re Scott Litman and Dan Mallin.  

The story of these two Minnesota entrepreneurs begins with a bit of serendipity. There are three clear moments in time that the duo can point to where they should have met. Same office, same friend group, even the same rooms. Despite all of these near encounters, Dan and Scott didn’t actually connect for another 10 years.  

At the time Dan was working at 3M, and Scott was building 3M’s first website. They describe their first partnership days as accidental. There wasn’t an official “Do you want to be my co-founder?” conversation; it just seemed to happen.  

Since they joined forces in 1994, Mallin and Litman have started and exited five companies together. Those ventures span multiple generations of technology: Imaginet, first acquired by Imation, a 3M spinoff, then re-acquired and relaunched by Mallin and Litman before being sold again to WPP plc; Spot Buy Spot, acquired by Comcast; Magnet 360, acquired by Mindtree; and Lucy, acquired by Capacity. Different markets, different moments in time, but a remarkably consistent way of building.

Their rare and impressive track record raises a set of questions: what drove that repeat success, why they chose to build in Minnesota, and how the Midwest ecosystem has evolved over the course of five ventures.  

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The Partnership Advantage

A consistent theme in their repeat success is people.

The pair attributes part of their success to their founding partnership, or as they like to joke, their second marriage. Mallin and Litman describe their relationship as a perfect yin and yang, opposites across nearly every dimension. Each brings different strengths to the table, and they’ve built a strong sense of trust that allows them to hand over projects or situations better suited for the other. This strong sense of trust also allows them to fully commit to one another’s ideas. Whatever decision is made, they go with it, for better or for worse.  

As Litman put it, once a decision is made, “there’s no scorecard.” They don’t revisit who was right or wrong. If it works, they both win. If it doesn’t, they both own it.

Another key component of success were their mentors, especially in the early days of their startups. They mentioned Ken Gudorf and Skip Gage being two influential mentors in their businesses.  

Both Mallin and Litman also listed their teams over the years as contributors to their success. They made it a point to hire early-career, entrepreneurial, and high-agency individuals.  

As Mallin put it, they didn’t create great people, they hired them because they were already great, then helped make them better through mentorship and experience.

Not only were their employees an ingredient of their success, they’re also one of the things they’re most proud of.

Many of Mallin and Litman’s former employees have gone on to start their own businesses. Collectively, alumni from their companies have generated over $500M in exits, including sales to companies like Samsung, Dell, and Salesforce.  

Over time, that emphasis on talent has created a ripple effect across Minnesota’s entrepreneurial ecosystem. The companies founded by their former employees are now producing the next generation of founders. What began within a handful of ventures has compounded into a broader network of builders shaping the region.

The Midwest Edge

The choice to build in Minnesota was a practical one. The lower cost of living and strong local talent made the decision to stay in the Midwest easy. Access to local Fortune 500 companies was also a contributing factor.  

Being in the region allowed them to position themselves as the best in their own backyard and win against national competitors.  

Mallin also described the “farm team” mentality and work ethic as a big advantage to building in the Midwest. The term comes from the broader farm culture in Minnesota: people work hard, figure out how to make things work, and keep moving forward. This “figure it out” mentality not only helped their internal team succeed; it also helped them beat coastal competitors for projects.  

That mindset, they argue, is not just about effort but resourcefulness. “Sometimes it’s bailing wire and duct tape,” Mallin noted, “it comes out working.”

Over the years, the pair was given the opportunity to leave the state many times but always made the choice to stay. “Aside from Silicon Valley, which is a unique example, Minneapolis is as good an entrepreneurial environment as any,” said Litman.

Despite less available capital in the region, particularly in the late 1990s and early 2000s, they raised most of their funding locally, primarily from angels and family offices, with some later participation from out-of-state investors.

That constraint shaped their approach. Rather than relying on large early rounds, they built capital-efficient businesses and leaned heavily on local networks.

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Minnesota’s Entrepreneurial Evolution

Despite the rich talent and access to customers in the region, the ecosystem itself looked very different 20 years ago than it does now. At the time, Minnesota lacked accelerator programs, early-stage venture capital money, pitch competitions and most of the main resources that come to mind when you think of Minnesota’s current entrepreneurial ecosystem.  

“It’s not that things weren’t happening in the ecosystem. There was activity; it just wasn’t as focused,” said Mallin.

Instead of fleeing to the coast to find these kinds of opportunities, they decided to build them for other local entrepreneurs. In 2005, Mallin and Litman founded the Minnesota Cup, now the country’s largest statewide startup competition. Over the last 21 years, the competition has helped over 30,000 entrepreneurs, and its alumni have raised over $1.2B in capital. Notable past participants include Sezzle, Johnny Pops and When I Work. The competition helps boost early-stage companies in a variety of ways, including providing mentorship pairing, non-dilutive prize money, and publicity.  

Beyond elevating startups that are already building in Minnesota, they seek to attract investors and bring national attention to the region. In the early days of the Minnesota Cup, they brought in voices like Guy Kawaski, one of Apple’s earliest employees, to speak at an event, bringing further legitimacy and excitement to the competition.

Their thesis was simple: capital follows opportunity. If Minnesota could surface high-quality startups, investors would come, regardless of geography.

In addition to the innovation brought by the Minnesota Cup, the overall resource pool has grown in Minnesota over the last 20 years. Litman cited this as the biggest change he’s seen in Minnesota’s ecosystem. Events like Startup Week, Enterprise Rising, groups like Entrepreneurs Organization, programs like Beta, Gener8tor and Techstars, and investors like Traction Capital, Matchstick, Groove, Bread and Butter have all emerged over the last 2 decades.  

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Building Beyond Themselves

What stands out about Mallin and Litman is not just the number of companies they’ve built; it's the consistency of how they’ve built them. Their approach, grounded in trust, talent development, and disciplined decision-making, has proven durable across decades of technological and market change.

Just as notable is their decision to build that track record in Minnesota. Rather than chasing established ecosystems, they helped shape one. In doing so, they demonstrate a broader point: enduring startup success is less about geography and more about people, culture, and the willingness to commit fully to the decisions you make.

Today, neither has interest in starting from scratch again; both remain deeply involved in the ecosystem. Their next phase is focused on lifting the next generation of entrepreneurs in the region. Mallin works as an Entrepreneurial Operating Systems (EOS) implementer, helping companies add structure as they scale. Both serve as Strategic Growth Partners at Traction Capital, mentoring and coaching early-stage founders; they have brought a national program to Minnesota – Birthing of Giants, and continue to support the Minnesota Cup as judges.

For a region still defining its place in the national startup landscape, their story offers both proof and a playbook.

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About the Author:

Ellie Pigott is an Associate at Traction Capital, a Minneapolis-based venture capital and private equity firm focused on growing businesses across Minnesota and the surrounding region. She's active in the local startup community, mentoring students at local universities and advising early-stage founders as well as part of Minnesota’s Emerging Venture Capital network, supporting the next generation of investors and operators. She holds a degree in Entrepreneurship from the University of St. Thomas.