Gov. Tony Evers has announced a $100 million effort to back startup businesses, which he called “the biggest public-private investment in Wisconsin startups and entrepreneurs in our state’s history.”
Evers announced the Wisconsin Investment Fund yesterday at Forward BIOLABS in Madison, a company that offers lab and office space for startups, along with WEDC Secretary and CEO Missy Hughes and officials from five venture capital firms selected for funding.
Evers said the $100 million “is only the beginning” and that he expects the fund to grow significantly.
“As the businesses that receive these investments start to grow, the value of the fund will grow with them, and this will create new opportunities to help even more businesses expand,” Evers said. “In fact, over time, we expect the value of this fund to grow exponentially with a 10-to-one private-public investment ratio.”
The money will be used to invest in companies working in several areas, including technology, health care, agriculture and manufacturing. Hughes praised the investment, saying it will send a message to entrepreneurs that the state will support them.
“The Wisconsin Investment Fund is literally planting a flag in the ground and saying ‘We want to support entrepreneurs who want to start here, who want to grow here, and most importantly, who want to stay here,’” Hughes said.
Cardamom Health CEO Vivek Swaminathan, whose company will be among the first to receive Wisconsin Investment Fund money, said access to capital is critical for startups.
“Oftentimes, we’re trying to make decisions when we can finally afford to make them instead of when it’s really right for our business,” Swaminathan said. “And so we plan to use this kind of capital to hire employees, to improve our solutions and add more, whether it’s product or technology, and to continue to take care of our customers. And if we can do all of that, then we can grow our business and ultimately make a greater impact.”
The venture capital firms will invest at least $1 into startup companies for each dollar of public money they invest. The returns will then be reinvested into the fund to help it grow. The U.S. Treasury’s State Small Business Credit Initiative will provide the $50 million that makes up the state’s portion of the $100 million.
The largest allocation, $15 million, is going to Madison-based HealthX Ventures, led by veteran entrepreneur Mark Bakken.
Bakken, the firm’s founder and managing partner, launched the VC firm in 2015 and has since grown it to 36 portfolio companies with more than $4.3 billion in market value, according to his Linkedin page. HealthX Ventures is focused on startups driving health care innovation with digital products, with joint headquarters in Madison and San Francisco.
“We are proud to be a part of WEDC’s Wisconsin Investment Fund,” Bakken said in a statement. “Wisconsin has a strong healthcare ecosystem, and this fund will provide great opportunities for health-related startups in Wisconsin seeking to build off of it.”
Committee members for the Wisconsin Investment Fund reviewed applications from 31 fund managers before making their selections, according to a release. Other recipient funds include:
*Venture Investors Health Fund, with $12 million. Based in Madison and Milwaukee, this firm invests in early-stage health care innovations coming out of Midwest research universities such as UW-Madison and the Medical College of Wisconsin. It’s focused on medical devices, therapeutics, digital health, and diagnostics.
Managing Director David Arnstein says the fund’s goal is to “invest in the most promising healthcare investment opportunities in Wisconsin that will have a profound impact on human health.”
*Serra Ventures of Champaign, Ill., with $7 million. This firm invests in early-stage, emerging and growth-stage tech companies in the Midwest region, though Evers’ release specifies the WIF dollars will only be used in Wisconsin. It has launched multiple funds focused on agriculture and food innovation.
CEO and Managing Partner Tim Hoerr highlights the state’s “long and storied history in ag and food,” calling it a perfect fit for the firm’s latest fund, the Serra-Grondex Ag & Food Tech Fund II.
“Our team at Serra looks forward to finding and funding the very best Wisconsin companies in the ag and food sector,” Hoerr said.
*NVNG Investment Advisors, with $6 million. Standing for “nothing ventured, nothing gained,” the firm is co-founded by Carrie Thome and Grady Buchanan and has a presence in Madison and Milwaukee.
“WEDC’s Wisconsin Investment Fund aligns very well with our vision of making Wisconsin’s entrepreneurial ecosystem globally competitive, and we’re looking forward to making meaningful investments in promising startups across the state,” Thome said in a statement.
*Idea Fund of La Crosse, with $5 million. With a focus on pre-revenue and early-stage tech companies across Wisconsin, Minnesota and Iowa, the firm targets software startups and has invested in 15 portfolio companies so far.
Jon Horne, the firm’s managing director, says startup founders in the region can “succeed at the highest levels” with the right resources and opportunities.
“This investment will help us drive more startup growth and success right here in Wisconsin,” he said.
The Wisconsin Economic Development Corp. is currently negotiating with a sixth fund manager for the final $5 million allocation, according to the release.
Listen to a recent podcast with Horne.
