BizNews FEATURE
Cordio
Still
Sikes
Chapman
Wisconsin Startup Coalition, Tech Council tout their different approaches to advancing state’s entrepreneurial ecosystem By Brandon Anderegg, staff writer TWO TECH-ORIENTED groups were quick to endorse Gov. Tony Evers’ plan for a $100 million state-backed venture capital fund when he first pitched the proposal in February. One was the Wisconsin Technology Council, which has been the state’s leading voice on startup policy for more than 20 years. The other was the Wisconsin Startup Coalition, a group formed last year that is focused on advocating for entrepreneurs and the state’s early-stage ecosystem. Both groups applauded Evers’ proposal to create a fund of funds venture capital program to support Wisconsin-based startups, saying it would make the state more competitive among its neighbors, who have historically outpaced the state in a variety of metrics, including deal flow and secured investments. While both organizations want to see increased VC and startup activity in the state, each says it takes a distinct approach in doing so. WSC is a nonprofit advocacy organization founded by Matt Cordio, who is a co-founder of Skills Pipeline and Startup Milwaukee, 10 / BizTimes Milwaukee MARCH 8, 2021
and Peter Welch, chief operating officer of Madison-based government relations firm The Welch Group. The Wisconsin Technology Council is a nonprofit member organization formed in 2001 to be a policy advisor to the governor, the Legislature and related state agencies and an educational and networking resource for entrepreneurs and high-growth firms. Over the past two decades, the Tech Council has put its support behind Wisconsin’s investor tax credits program (Act 255) and the creation of the Badger Fund of Funds, a state-backed venture capital fund; organized state-wide programming like the Wisconsin Entrepreneurs’ Conference; and published the Wisconsin Portfolio to chart venture investment in the state and produced other publications. Wisconsin startup leaders also give the Tech Council credit for influencing the new $100 million fund of funds proposal and other entrepreneur-friendly aspects of the governor’s recent budget proposal. Since November, WSC has grown to include more than 60
members, about 70% of whom are startup founders, Cordio said. His goal is to double the number of annual first fundings over the next five years in Wisconsin. It was 52 in 2019, up from 32 in 2018. WSC is proposing policy recommendations that focus on access to capital and talent. At this point, its recommendations are generally broad, such as incentivizing early-stage investment by increasing the state Qualified New Business Venture Program’s 25% tax credit and working with the Department of Workforce Development on programming to address shortages in the highskilled technology workforce. One clear initiative: WSC came out of the gate lobbying state legislators to support bills that would prevent small businesses from having to pay millions in state income tax liability on Paycheck Protection Program loans, despite those loans being tax-free at the federal level. Wisconsin’s policy environment and startup ecosystem “hasn’t really seen change” in the past three decades, said Cordio, pointing to the state’s persistent lack of
venture capital. WSC’s success in recruiting startup representatives as members indicates they want their voices to be amplified, he added. “We have dozens of startup founders and if you look at who’s engaged in the Tech Council, I think our membership doesn’t really overlap,” Cordio said. “If you look at our board and who’s on theirs, it’s a very different group of people.” WSC’s board members include founders of startups such as Fiveable, FrontDesk and gener8tor. The Tech Council’s 50-plus member board includes executives from large legacy companies such as GE Healthcare, Rockwell Automation and AT&T, and representatives of universities, venture funds and economic development groups. While Cordio believes both organizations are beneficial to the state’s overall ecosystem, WSC’s niche is to advocate for the interests of startup founders and investor groups, whereas the Tech Council focuses on a broader portfolio of issues, he said. “We’re not competing against another organization. We’re competing against the status quo of what’s happening to support entrepreneurs and innovators in Wisconsin,” Cordio said. Tech Council president Tom Still agrees Wisconsin needs more venture capital, especially for maturing companies raising Series A funding to scale and grow. He and former Tech Council chairwoman Toni Sikes, who is the co-founder and CEO of Madison-based CODAworx, say the proposed $100 million VC fund would help close the gap. The culture and business climate of the state in the early 2000s led to a slow start for Wisconsin’s startup ecosystem relative to its neighbors, Still said, adding that the state did not recognize the benefits of young companies and their ability to produce jobs at the time. The state’s Legislature has historically been cautious in its financial support of startups,
