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Evers’ proposed $100 million VC fund an important step to support Wisconsin startups, supporters say By Brandon Anderegg, staff writer Gov. Tony Evers is proposing a $100 million venture capital fund to boost the state’s startup ecosystem as part of his 2021-‘23 budget. The proposed Wisconsin Fund would follow a fund of funds model, which means $100 million would be allocated to a minimum of four existing recipient funds that in turn would invest those
dollars into Wisconsin-based companies. At least 20% of the individual companies receiving an investment from a recipient fund must be women- or minority-led and rooted in underserved communities, an aspect of Wisconsin’s model that is unique among other state-backed funds in the country, said Missy Hughes, Wisconsin
BY THE NUMBERS Exports by Wisconsin companies fell by nearly
1.2 BILLION $
in 2020, a 5.4% decline from 2019 and the lowest annual total since 2010.
Economic Development Corp. secretary and chief executive officer. “The taxpayers would agree that now is the time to be bold,” Hughes said. “Now is the time to think about what it’s going to take for Wisconsin to have a full and strong recovery and a recovery that includes all of our communities and all of the vulnerable people that have been impacted by the pandemic.” Under the proposal, Wisconsin would become an investor alongside private investors, who must match the $100 million state investment with $200 million in collective investments of their own. Evers’ proposal also calls for the WEDC to establish an oversight board for the new fund. The Wisconsin Fund would make an investment of no more than $25 million in each fund. The idea behind multiple recipient funds is to spread risk while supporting multiple fund managers who have varying expertise and the ability to reach different communities, said Tom Still, Wisconsin
Technology Council president. Securing capital for new businesses has long been a challenge for Wisconsin, which is why a fund of this size is critical for entrepreneurial growth in the state, its supporters say. Early-stage companies may be able to raise a first round of funding from family, friends or angel investors, but it’s the next stage of funding that has historically served as a barrier for startups, Still said. “The promise of this fund is that it will continue a maturation process for young companies as they move along to truly become revenue producing, profitable and job creating,” Still said. Evers’ budget proposal also includes $200 million for small businesses impacted by the COVID-19 pandemic and more than $29 million for workforce development initiatives, including $8 million that would be awarded to organizations focused on local or regional economic development. Evers’ VC fund proposal has been met with support from Wisconsin’s broader startup ecosystem, including the Wisconsin Startup Coalition. “It’s a smart investment to make now to ensure Wisconsin emerges stronger from the COVID-19 pandemic,” said Matt Cordio, co-founder of the Wisconsin Startup Coalition. n biztimes.com / 5
