18 May Public-private venture capital “fund of funds” under consideration for creation in Wisconsin
For a long time, in some cases years, economic development groups including the Wisconsin Technology Council and the Wisconsin Startup Coalition have advocated for the creation of a large public-private fund of funds to attract venture capital for Wisconsin’s growing tech industry.
According to a PwC MoneyTree report cited in Governor Tony Evers’ 2021-23 Budget in Brief, Wisconsin’s share of venture capital investment over the past 20 years has been one of the lowest in the country, averaging between 0.01% and 0.5% of the national total.
“We have been trailing our neighbors. We’ve been leaving money on the table,” says WEDC Deputy Secretary Sam Rikkers. “We have just as good, if not better, businesses. We have just as good, if not better, universities to attract those dollars. So let’s bring it here.”
State legislators on both sides of the aisle agree that growing Wisconsin’s entrepreneurial environment is vital to the state’s economic success, and that this growth requires venture capital investment.
The $25 million Badger Fund of Funds was created in 2013 as one way of addressing this deficit. Since then, its portfolio of venture capital funds has leveraged an average of $3.30 in private investment for every dollar they’ve invested.
Pointing to the success of the Badger Fund of Funds, Governor Evers’ 2021-23 proposed budget includes the creation of a larger, $100 million venture capital fund of funds. This proposed Wisconsin Fund would be similar to public-private venture capital initiatives launched in Indiana, Ohio, Michigan and Illinois in recent years to attract outside investment.