By Tom Still

MADISON – Would there be Major League baseball without a system of minor-league teams to nurture young talent? Not a chance. In baseball, which so often imitates life, a good “farm system” keeps the big leagues supplied with the next generation of players.


The story is much the same when it comes to venture capital investments, so often cited as the life’s blood of high-growth start-up companies. Unless there are sufficient numbers of up-and-coming deals percolating in the pipeline, venture firms won’t have ample choices in Wisconsin about where to put their money. Wisconsin’s venture capital investments won’t grow over time unless there are a sufficient number of investments taking place earlier in the game.


While there’s nothing minor-league about the investors involved or their work, angel investors in Wisconsin are the private equity equivalents of a “farm system.” Angel investors, who work either in networks or as individuals, often provide some of the first real money for start-up companies. They also offer coaching, mentoring and real-world experience that young firms otherwise might never get.


A year ago in Wisconsin, there were only six active angel networks – active being defined as a network that had made at least one investment. Today, there are 11 active networks and at least three more are poised to invest once they find deals that meet their standards and expectations.


The Wisconsin Angel Network, formed a year ago this month, has been charting angel activity statewide and helping provide infrastructure for investors and entrepreneurs alike. There are 14 members of WAN (a public-private project of the Wisconsin Technology Council) representing more than 200 investors. These are people who have enough money to invest in the right start-up company – and who often come with the right kind of expertise.


The newest member of WAN is the NEW Capital Fund LP. Technically a private equity fund rather than an angel network, the $10 million fund was raised much in the same way that angel funds get started. About 75 people, mostly from Northeast Wisconsin, have committed capital with the idea of investing in 10 to 12 deals over the next five years.


“For those of us who live in the New North, we have no doubt about the potential that exists in our region,” said general partner Charlie Goff, who announced the fund Monday in Appleton.


So far this month, there have been announcements about three major venture capital or private equity investments in Wisconsin: $14 million for TomoTherapy, $12 million for EraGen and $7 million for Each of those companies attracted angel investment dollars at some point in their development, and their growth may not have occurred without that kind of private equity infusion.


The Wisconsin Angel Network is helping provide more fertile ground of angel networks and investors by putting on training seminars (yes, there’s an art to angel investing), establishing and charting industry metrics, producing on-demand video presentations and providing other resources. The biggest tool in WAN’s kit is its online storehouse of potential deals, called the “Deal-Flow Pipeline,” which is available to accredited members at


Since June, nearly 60 company summaries have been posted on the site and another 110 companies have signaled their intent to do so. Many, but not all, of those companies have a high-tech emphasis, and they are categorized on the site within 14 business sectors (such as advanced manufacturing, biotech and information technology).


The aim of WAN’s Deal-Flow Pipeline is to give angels and other accredited investors across Wisconsin access to promising opportunities, whether they’re taking place in La Crosse, Racine or Green Bay.


There are strong signs that Wisconsin’s angel investment “farm system” is growing and producing more deals. Investment activity has doubled in the past year – the availability of new tax credits since Jan. 1, 2005, has already helped — and more networks are forming.


Wisconsin has historically lagged in attracting venture capital, but more companies will be able to play in the “big leagues” of private equity if they’re well-mentored before they get there. Angel investors are coaching tomorrow’s stars today.


Still is president of the Wisconsin Technology Council. He is the former associate editor of the WisconsinState Journal in Madison. To contact WAN director Joe Kremer, call 608-442-7557 ext. 23.