A bill that would create a state-leveraged “fund of funds” to invest in some of Wisconsin’s most promising early stage companies was introduced today by a bipartisan group of state legislators.
The Investment Capital legislation will set the stage for a $25 million state investment in a fund that would require a 2-to-1 private investment match over time.
“Wisconsin has the basic ingredients needed to create a more vibrant startup economy – ideas, innovation, intellectual property and talent,” said Rep. Mike Kuglitsch (R-New Berlin), the bill’s lead author in the Assembly. “What’s needed now is more capital targeted to companies that are likely to grow and create jobs over time.”
Modeled after similar funds in other states, the fund will spur company creation and job growth while building safeguards to protect the interests of taxpayers.
Wisconsin State Journal:
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Milwaukee Journal Sentinel:
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WisBusiness.com:
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BizTimes.com:
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Wisconsin Radio Network:
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The Northwestern:
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“This legislation will help make sure good ideas stay in Wisconsin,” State Senator Darling (R-River Hills) said. “It also makes sure taxpayers are protected by providing accountability and transparency.”
The fund would add to Wisconsin’s successful Act 255 investor tax credit program, which was launched with bipartisan support in 2005, and which has sparked company and job creation in Wisconsin while serving as a national model.
“I am very pleased that this bill requires the non-partisan State of Wisconsin Investment Board play a majority role in selecting a funds manager,” said Cullen (D-Janesville). “I think SWIB’s role will go a long way in ensuring a firewall between investment decisions and politics.”
The bill follows up on actions by Gov. Scott Walker, who earmarked $25 million for a state fund-of-funds in his 2013-15 state budget bill and invited legislators to craft language to create the program. Walker’s budget also proposes to lift a cap on total angel investment tax credits available through the Act 255 program, which helped to create 1,500 Wisconsin jobs in 2010 and 2011 alone.
“This is an important opportunity for statewide job creation that is being achieved in a bipartisan manner”, said Majority Leader Scott Suder (R-Abbotsford). “We needed a bill towards investing in more entrepreneurs who are turning great ideas into great companies.”
The Ewing Marion Kauffman Foundation, the world’s largest foundation devoted to entrepreneurship, has reported that all net new jobs in the United States are created by young companies – usually five years old or younger. In its 2012 Index of Entrepreneurial Activity, Kauffman reported that entrepreneurial activity in Wisconsin remains relatively low compared to the U.S. average.
“The lack of investment capital in Wisconsin is a drag on our economy and it thwarts business start-ups”, said Rep. Fred Clark (D-Sauk City). “Attracting jobs should be a Wisconsin issue, not a Republican or Democrat issue, and I look forward to continue working with legislators from both parties helping to open the doors to entrepreneurs and job creators in Wisconsin.”
Targeted growth sectors:
· Agriculture – Examples are food processing; packaging and safety; urban agriculture; sustainable production; field surveillance and crop management.
· Information Technology – Examples are software; mobile applications; computing systems; internet networking; electronic health records and medical informatics.
· Engineered Products – Examples are nanotechnology; materials science; controls, circuits and processors; energy generation and conservation; natural resource management.
· Advanced Manufacturing – Examples are product and process design and improvement; robotics; automated systems; composite materials; power systems; RFID and supply chain integration.
· Medical Devices and Imaging – Examples are devices include instruments, implants and apparatus used to diagnose, prevent or treat disease or other conditions. Imaging includes techniques and processes (such as X-rays, MRIs and CAT scans) used to create images of the human body, or its parts and functions, to reveal diagnose or examine disease.
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