Raising Big Money Is A Common Problem For Midwest Entrepreneurs
Technology leaders in the upper Midwest say they have common problems trying to compete financially with tech hubs like Silicon Valley. But the Midwest advocates also say things are getting better in the region.
Milwaukee-area entrepreneurs often talk about local investors being cautious and perhaps conservative. But Julia Kanouse, of the Illinois Tech Association, says it's actually the Midwest region that doesn't do as well as Silicon Valley in California and Austin, Texas.
"We're somewhere near third in the number of deals when you look at the Midwest. But we are trailing in the number of dollars. We're doing more small deals and we're not getting as much dollars as those other regions," Kanouse said.
Kanouse was one of several people on a panel at the Wisconsin Entrepreneurs Conference that began in Milwaukee Tuesday.
Fellow panelist Peter Romenesko directs the Innovation Lab at Titletown Tech, a venture fund based near Lambeau Field. He says some large corporations have money to invest, and he's trying to convince them to see three potential pay-offs.
"First, innovation that can protect your core business, and you need to have that. The second is innovations that help expand your business to a new customer or current customer and you need to have those. And then the third, which is sometimes the most scary, the innovation that may never come back. It's the wild stuff that if it works is great, but it may not," Romenesko said.
The Midwest also lacks serial entrepreneurs, says Chandra Miller-Fienen. She heads Starting Block Madison, a hub or gathering place for startups. Miller-Fienen says serial entrepreneurs have just left one firm and want to largely finance their own new company or someone else's, “In which they want to take funds from an exit and pump them back into risky but innovative promising new startups.''
Miller-Fienen also says there some older wealthy families in the Midwest whose last entrepreneurs were two generations ago. She says if the so-called “old money” can be convinced to support startups, that will be a winning solution for the region.
Meanwhile, Julia Kanouse of the Illinois Tech Association says there is already some change within the Midwest. Change that is good news for Wisconsin.
"Chicago had been leading the way by a lot. Like, we had 10 times the number of investment. Now, you're starting to see that number shrink and not because the amount of money going to Chicago is getting smaller. But the amount of money going into Milwaukee and Madison and Ohio is growing," she says.
The Wisconsin Entrepreneurs Conference continues Wednesday morning.
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