WED AM News: Early-stage investment activity was down in 2024, Tech Council says; Top investor says state needs to ramp up VC landscape to create high-impact companies

February 26, 2025

— Wisconsin last year had its lowest levels of venture capital activity since 2018, with less than $360 million in deals captured in an initial tally by the Wisconsin Technology Council.

Joe Kremer, director of the Tech Council’s Investor Networks, yesterday presented an early look at last year’s investment landscape during a luncheon in Madison. While the group will be adding additional deals in the next few months to its tally for the year, Kremer said he doesn’t expect the overall dollar figure to increase very much.

At latest count, the Tech Council identified 66 deals that occurred in 2024 totaling about $358 million. That’s down substantially from the recent peak of $869 million in the standout year of 2021, when the state had 140 deals, but also continues the trend of declining investment activity that’s been seen since then.

In 2022, Wisconsin saw about $640 million raised through 107 deals, which then fell to $490 million in 2023 though the number of deals was unchanged over the year.

“Numbers are down, and we’re hearing a lot of different reasons from investors, from valuations being high, some of them don’t feel that they’ve been seeing good deal flow,” Kremer said. “There’ve been other issues that we’ve seen, some investment rounds haven’t been happening.”

The total investment figure for any given year is typically driven by the “big ticket” rounds, Kremer noted. He referenced Madison-based rewards program Fetch raising $240 million in 2022 and Germantown-based software firm VBA landing $156 million in 2023.

By comparison, the largest deal of 2024 was $55 million, raised by a Madison biotech firm called Elephas.

“That being the top last year is really sort of showing that the larger rounds have not been either raising, or we don’t have entrepreneurs operating in that space and they aren’t attracting the dollars,” Kremer said.

Broadly speaking, most of the rounds Wisconsin companies are raising are around the range of $2.5 million or below, according to Kremer’s remarks. He noted the middle range, from around $3 million to $10 million, represents a funding gap for Wisconsin’s startup ecosystem.

“Seems like once a company raises around the $10 million round, they’re able to really jump out of the state and attract investors from other states so they’re able to fulfill their rounds,” he said. “But it seems like this is really the space that we need to start focusing in on.”

— One of the state’s top investors says Wisconsin needs to ramp up its venture capital landscape to create and grow high-impact companies.

John Neis, managing director of Venture Investors in Madison, spoke during yesterday’s Tech Council meeting.

“We’re playing down here in this kind of $3 million per company, and on a national basis, it’s tens of millions,” he said. “And we’ve got to be in that game. We have to be in that game, or we’re not going to create the kind of companies we really want to create here.”

Other speakers yesterday stressed the importance of attracting more companies and out-of-state investors to get involved in Wisconsin.

Shayna Hetzel, vice president of entrepreneurship and innovation for the Wisconsin Economic Development Corp., said the state can cultivate expertise and mentors through its growing pool of experienced entrepreneurs.

“In a small ecosystem, one big company threads the next [generation] of deals and founders that can then return as angels, as advisors, as founders again,” she said.

Michael Thorson, co-founder and managing director of Inventure Capital in Madison, said he’s seeing better companies arise as the state’s investment landscape matures. But he emphasized the need for more outside VC firms to play a role, arguing “we need to incent these bigger players to set up satellite offices in the state.”

Yesterday’s discussion also touched on how federal policy changes might affect VC activity in different industries, as the Trump administration’s moves send signals to investors. Neis, who’s on the board of the National Venture Capital Association, said the administration is “actively asking us” for ideas about how the United States can succeed in the AI realm.

“There’s no question, in the last three months there’s been some change in the prospects of certain sectors,” Neis said. “Hey, if you’re in crypto, you’re very happy … but clean tech? You don’t want to be in clean tech right now.”

— Wisconsin banks ended 2024 “in a strong position” as commercial and real estate lending increased over the year, according to the Wisconsin Bankers Association.

The group yesterday released its assessment of the latest federal financial figures, showing residential real estate loans at banks in the state rose “substantially” over the quarter with 17.15% growth and “slightly” over the year with 15.46% growth.

WBA points to limited inventory levels and a lack of incentive to move for existing homeowners as key factors, noting home buyers have gotten used to the current interest rate environment and higher home prices across the board.

Meanwhile, commercial lending was up 0.55% over the quarter and 3.69% over the year, the report shows.

Still, farm loans fell “significantly” over the quarter with a 20.66% decline while growing just 1.83% over the year as “farmers struggled with commodity prices, weather, and tight operational costs.”

Rose Oswald Poels, president and CEO of the WBA, says the fourth-quarter figures show “the year 2024 ended on a solid note with Wisconsin’s banks in a strong position.”

— Assembly Speaker Robin Vos says he’s happy Wisconsin hasn’t been “borrowing money” from the federal government for health care.

Wisconsin is one of 10 states that did not take the federal Medicaid expansion under the Affordable Care Act, and House Republicans were set to vote on a budget resolution last night that critics have said would lead to cuts in the program.

“Thank goodness Wisconsin never expanded Medicaid,” Vos, R-Rochester, said yesterday during a WisPolitics luncheon.

Also during the event, Vos again criticized legislation seeking to expand to 12 months Medicaid coverage for postpartum women.

The state now covers 60 days, and a Senate Health Committee last week unanimously signed off on the bill, which cleared that chamber 32-1 last session.

In his budget address, Dem Gov. Tony Evers declared, “One legislator should not be able to single-handedly obstruct a bill that’s supported by a super majority.” Vos yesterday said the bill wasn’t needed when it’s helping a category of people that already have Medicaid coverage.

See more from the luncheon at WisPolitics.

— GOP lawmakers have reintroduced legislation to bar minors from receiving gender-affirming care, making it the third bill aimed at transgender Wisconsinites this week.

It comes after Rep. Barbara Dittrich, R-Oconomowoc, re-introduced legislation this week to require transgender women and girls to play the sport that matches their sex assigned at birth at K-12 schools, tech colleges and universities.

The “Help Not Harm Act” introduced by Rep. Scott Allen, R-Waukesha, and Sen. Cory Tomczyk, R-Mosinee, would prohibit “engaging in, causing the engagement in, or making referrals for, certain medical intervention practices upon” anyone under 18 to align with a sex other than their sex assigned at birth, with limited exceptions. Those who violate the prohibition would risk having their medical license or certificate revoked.

Gov. Tony Evers vetoed the bill last session, labeling it discriminatory. He vowed to veto any bill that makes Wisconsin a less safe, inclusive and welcoming place for LGBTQ people and kids.

Allen and Tomczyk in a co-sponsorship memo argued the measure would protect children and said they “should not be the subjects of experimental treatments or operations that could leave them sterile for the rest of their life.”

And Allen in a statement said: “Children who struggle with gender identity deserve help, not harm.”

“There are too many studies that show the harm of these procedures, and there are too many stories of young people regretting their transition later. We need to help minors by giving them the inherent blessing of time,” he said.

Fair Wisconsin Executive Director Abigail Swetz in a statement opposing the bill emphasized the importance of health care for transgender youth.

“It is gender-affirming, and it is life-affirming for the youth, as well as for the families who love and support these kids and their access to this health care,” Swetz said. “Those of us who are lucky enough to have trans youth in our lives know this firsthand; I have witnessed the life-affirming impacts of this care, and I will never forget the joy I saw on those kids’ faces when they told me about something as simple as a doctor’s appointment.”

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