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The Minnesota business community has long prided itself on the vitality of its venture-capital industry. Venture capitalists provide money to promising start-ups. Then, if these new businesses succeed, they'll get a big payoff when the company goes public or is bought by another private investor. Nationally, venture capitalists have been a major force in fueling the high tech-driven economic expansion. But Minnesota may not be getting its fair share.

THE NUMBERS SHOW that venture capital spending in Minnesota rose sharply in the latest quarter. They also reveal a continuing decline in the state's share of the national venture capital pool.

So a lot depends on whether you're the sort of person who sees the proverbial half-full or half-empty glass of water. Optimists will cite the fact that spending more than tripled in the latest quarter, according to accounting firm PriceWaterhouseCoopers. Pessimists will note that every region in the country broke records. What's more, the state's share of the national pie has fallen to 1.6 percent from almost 3 percent in 1995.

Market players cite a number of reasons for this alarming downward trend. While Minnesota is a national leader in the medical-device industry, all the excitement, and most of the capital, is going to Internet-related businesses. And in that sector, Minnesota is only a small bit player to the Silicon Valley star.

Dan Carr is president of the Collaborative, an organization for Minnesota entrepreneurs and investors.

Carr: At the same time as the Internet has excelled, these venture-capital amounts have increased. Meanwhile, the medical-device industry, in which Minnesota has such a strong history, has been relatively depressed.

Hare: There are far many more opportunities on the west coast, so many capable venture partners who begin their careers in the Twin Cities, move to the coast to pursue those more-bountiful opportunities deals, It's understandable, there just aren't as many deals here in Minnesota, so there has been a rather considerable export of venture partners.

Almog: You have to understand what we do. We are dream merchants. People come to us with dreams, and if we share in it, we help them embark in making that dream a reality. And if people come to us with small dreams, we don't get as excited as if they come to us with big dreams.

Carr: We have a strong tradition of providers and services, bankers, accounting firms, consultants and lawyers who are very well versed in helping entrepreneurial companies succeed.

Hare: To a certain degree it's like talking about the Vikings in the Super Bowl. Minnesota has had its opportunities in the past, but hasn't seized on them, we have to be aware of our strengths we still have, in terms of companies and people and technology, and we do have levels of "vc" that can support great companies. We have not had our fair share of successes from a national standpoint.