Wisconsin’s new investment fund will draw attention beyond state lines

Among the first media outlets to cover the recent news were $100 Million Wisconsin Investment Fund Announced There are two outside the state. Seattle Post-Intelligencer Washington State and US News & World ReportBoth companies broke the news within hours via the Associated Press.

As I told those gathered at Forward Biolabs in Madison for the announcement by Governor Tony Evers and others, that’s a big reason why the public-private fund isn’t the end of our state’s journey to building a more vibrant tech economy, but an important new beginning.

Wisconsin, like 49 other states, received funding through the U.S. Treasury Department’s State Small Business Credit Initiative, authorized by the American Rescue Plan Act. States were given considerable freedom to customize their programs, and Wisconsin chose to put nearly two-thirds of its allocation into a fund that required it to pay an equal amount of SSBCI funding to private venture capital firms.

The result was the largest public-private venture capital initiative in Wisconsin history, building on previous efforts and marking a milestone.

Fourteen venture companies submitted bids. Wisconsin Economic Development Corporation Five organizations have been selected to participate in the program, with a sixth private foundation pending. The first five organizations to receive a total of $45 million from the state are:

• Health X VenturesMadison, $15 million. HealthX invests primarily in the digital health space but also in other healthcare innovations.
• Venture Investors LLCMadison, $12 million. Venture Investors invests primarily in healthcare innovations such as therapeutics, medical devices, health IT and diagnostics.
• Sera VenturesChampaign, Illinois, $7 million. Serra Ventures invests nationally, particularly in the agriculture and food technology sector. Some of Serra’s past investments have been in Wisconsin companies.
• NevadaMadison, $6 million. NVNG, short for “Nothing ventured, nothing gained,” invests broadly in Wisconsin’s technology sector, including health.
• Lacrosse Ideas Fund$5 million. Badger Fund of Funds Through its network, La Crosse Ideas Fund invests broadly in the upper Midwest in sectors including information technology, health IT, data analytics, supply chain, agriculture, manufacturing and financial services.

This combination reflects the fund’s overall goal: to build on existing and emerging tech startups, as well as reach beyond traditional research hubs to find companies and entrepreneurs in underserved regions.

That’s one reason Serra Ventures is stepping in: The firm is adept at identifying strong deals in the agriculture and food technology space (it currently has 24 portfolio companies), and has a strong track record of divestitures and other “exits” that demonstrate its market knowledge.

Another focus is biohealth, which has long been a tech strength in Wisconsin in areas like Madison and Milwaukee, but increasingly in cities like Eau Claire. Last year, the U.S. Economic Development Administration recognized Wisconsin as a “regional tech hub” for personalized medicine and related technologies, which could make the state eligible for up to $75 million in federal funding to spur growth.

While the announcement was made by Senator Evers, a Democrat, it’s worth noting that efforts to build a stronger tech-based economy in Wisconsin have been bipartisan for decades.

The enactment of the Investor Tax Credit in 2005 was spearheaded by the late State Sen. Ted Canavus (R-Brookfield) and then-Secretary of Commerce Corey Nettles, an appointee of Gov. Jim Doyle, a Democrat. The creation of the Badger Fund of Funds in 2013 came with the cooperation of both parties in the Legislature during then-Gov. Scott Walker’s term. Recent changes to both the Investor Tax Credit program (the Qualified New Business Venture Credit, also administered through WEDC) and the Badger Fund also required bipartisan agreement.

In the state Legislature itself, the bipartisan, informal Tech Caucus includes Republican and Democratic leaders and members, further demonstrating that economic growth doesn’t necessarily have to be a partisan battle.

The $100 million Wisconsin Investment Fund offers no guarantees: Most startups eventually fail. But the companies that succeed often do so at a scale that spreads prosperity far beyond their own corporate walls. Investors from outside Wisconsin will take notice, and perhaps bring their own expertise and capital to the table.

Tom Still He is president of the Wisconsin Technology Council.