By Tom Still
Wisconsin’s start-up economy is beginning to look like its parents . . . all of them.
For years, most babies in the state’s entrepreneurial crib were named “Bio-this” or “Gen-that,” a reflection of the fact that emerging biotechnology companies were the darlings of angel and venture capitalists.
Young life science companies are still being born in Wisconsin, but the nursery is making room for start-ups that resemble other fathers and mothers in the state’s economic family. The company lineup at the upcoming Wisconsin Early Stage Symposium reflects that trend.
Among the tech-based companies selected to pitch to investors at the Nov. 13-14 conference in Madison (http://www.wisearlystage.com/) are firms that may help redefine some of Wisconsin’s iconic business sectors. They include:
Two companies that are using different technologies to help fishermen find and catch fish – and even brag about it later using social media.
A firm with web-based and mobile platforms to help parks and recreation agencies better manage everything from reservations to events to volunteers.
Another web-based company helps golfers reserve tee times, invite friends to play, track scores, establish a handicap membership, build a profile and communicate with their golfing buddies.
A company that is building a revolutionary diesel engine for light aircraft – and another that has developed software to improve how pilots train for severe weather.
A firm that builds adaptable construction and farm equipment that can perform the functions of small loaders, excavators and scissor lifts. It can replace multiple pieces of equipment with a single machine.
A company that has redesigned wheels for wheelchairs so that users endure less physical wear and tear.
A firm that has developed hardware, software and wireless technologies to help physical therapists and personal trainers monitor and instruct clients.
A company that has found a way to replace rare-earth metals commonly used in electric motors.
While the event also features emerging firms with breakthroughs in biotechnology and medical devices, the mix of companies demonstrates that innovation is taking place across a broad spectrum of Wisconsin’s economy.
Twenty-six companies will present to investors on the first day of the conference and 15 on the second. Only seven of the 26 on the first day are biotech or medical device companies. The rest represent advanced manufacturing and other sectors, predominantly information technology. The diversity on day two during the event’s Elevator Pitch Olympics is similar – lots of tools, clicks and apps and fewer biotech “bugs.”
The lineup also reflects the 2012 reality of angel and venture capital economics. Not all investors have the money or the patience to stick with a biotech company from lab to marketplace, especially when the hurdles include patents, clinical trials and federal regulatory approvals. Some prefer to invest in companies that will mature sooner, either in terms of product sales or an “exit” that will bring a return on their investments.
Angel groups and venture capital firms that were almost exclusively biotech-focused five years ago are diversifying their portfolios. It’s an investment philosophy that reduces risk and creates a portfolio with a blend of vintage years, with some companies maturing in three years or less and others taking five to seven years to ripen.
Most important, the diversity of start-ups at next week’s pitch event chips away at the perception that biotech firms are Wisconsin’s only favored sons and daughters.
Some lawmakers have resisted supporting the idea of a state-leveraged fund to increase investments in start-up companies, suggesting it would be a Madison-centric effort. As more companies emerge in sectors such as advanced manufacturing, mobile apps and recreational sports, however, it has become evident that all of Wisconsin will benefit. In fact, eight of the companies presenting in Madison are start-ups coached by BizStarts Milwaukee.
What screams “Wisconsin” more than fishing, golf, camping, engines and motors? It has taken time, but the state’s start-up economy is producing ideas and companies that build on all of its historic strengths rather than a few. For investors and state policy-makers, that’s a much safer bet.
This column first appeared Nov. 3 in the Business section of the Milwaukee Journal Sentinel.