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WisBusiness: Conroy bullish on Wisconsin as tech sector center
2/4/2009

By WisBusiness.com staff

MADISON -- The former top exec at Third Wave Technologies warns that the recession will have a negative effect on venture capital funding, but Kevin Conroy says he's optimistic about the long-term prospects of Madison's tech sector.

"The venture capital funding situation is terrible, and it will probably remain so for quite some time," Conroy told a WisBusiness.com-Madison Magazine luncheon at the Madison Club on Feb. 2.

Conroy, who led Third Wave from December 2005 until August 2008, helped focus the company's medical testing product line and improve its bottom line to the point that it became an acquisition target of Hologic Inc. Hologic paid about $580 million for Third Wave last year.

Conroy compares the $580 million to the approximately $250 million the company raised over its history. Much of that time, the company struggled, in part because it lacked focus and was too research-oriented and had the burden of unsettled litigation hanging over its head. But under Conroy, it tried to focus on one thing well, and ended up getting traction with the test for the cervical cancer virus. Conroy says "it was the hardest thing that we could have chosen" but it was in what "we thought was the biggest market." That caught the attention of Hologic, which focuses on the women's market and has grown rapidly through acquisitions to a $2 billion-a-year company.

Conroy says the major sources of VC funding, such as big pension funds, have been hurt by the stock market tumble, thus limiting capital. And he agrees angel funding may be hard to get given that individual investors, while still rich, may be less willing to divert personal resources that likely have declined in the past six months. †Still, he's looking for another job with another young company that'll keep him in Madison. "There are a lot of great ideas out there," he says.

The former Michigan resident says Wisconsin and Madison have a lot to offer in terms of University of Wisconsin research, the arts, solid educational institutions and quality of life.

"Madison's an incredible community, and it's a great community to start a business," he said. "I'd argue it's hard to find a better city to start a business today."

He urges business leaders to tell the story. "The critical mass is getting better," he notes.

When recruiting companies to the area, "it's really important to get them here, for them to actually see Madison," he said.

"The opportunity is there," he adds, joking that for too many outside the state Wisconsin equals cheesehead. "They should ban those at the airport."
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