Innovative ideas may be about to get a huge financial boost in Wisconsin. Gov. Tony Evers says he'll include in his state budget proposal a $100 million venture capital fund to jump-start the growth of startup businesses.
Matt Cordio, of the Wisconsin Startup Coalition, says he supports the plan and that access to venture capital is the lifeblood of innovation.
"Typically, these companies are in the technology sector or bio-technology sector and tend to create really high quality jobs," Cordio says. "These companies, often it's an entrepreneur with an idea, they need some time to go build that idea, and validate that it's going to work in the marketplace, and venture capital is really what underwrites that innovation. It's why you see dramatic economic growth in places where venture capital has flourished, like California and New York."
The new Wisconsin plan would be what's known as a fund of funds. Wisconsin Technology Council President Tom Still says that's an umbrella-like structure that could have four or five smaller funds underneath it.
"And what that does, I think, is increase risk mitigation. You know, it spreads the risk over more funds. And, it also spreads the possibility of investments in different sectors because fund managers tend to be experts in certain sectors,” says Still.
Still also likes that the governor wants overall to require two private dollars to be invested for every one dollar from taxpayers. The Wisconsin Economic Development Corporation would set up an oversight board for the public money. Twenty percent of the $100 million fund would have to be invested in minority or women-owned firms, or in businesses located in underserved areas.
To become law, the idea will need the support this spring of the Republican-controlled Wisconsin Legislature. Cordio says other Midwest states have been creating these innovation funds, and there was a smaller effort led by the Wisconsin GOP nearly a decade ago called the Badger Fund of Funds.
"So, I'm hopeful that this is a bipartisan issue. It's really about investing in new jobs and long-term economic growth for our state,” says Cordio.
Still says concerns about COVID-19 should not block the new fund. He says the high-tech, high-growth sector has done pretty well over the last year, while some other parts of the economy have suffered.
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