By Tom Still

MADISON — It may not have popped up on your personal calendar, but last week was “U.S.-China Investment Week” in a handful of states that included Wisconsin.

It was also a week in which the state’s homegrown angel and early stage investors kept doing what they routinely do, which is check out young companies, invest in the most promising enterprises and help them grow. More on those angels later – but first, let’s satisfy your curiosity as to why some wealthy investors from China were kicking tires in Wisconsin.

About 20 Wisconsin companies pitched their business plans Thursday in Milwaukee and Madison to representatives of PiYi Investment Management Co., a private Chinese fund that is scouting for deals in the United States. PiYi includes a venture investment club with some 1,000 or so individuals with an average net worth of $15 million each.

It’s a prime example of “foreign direct investment,” the notion of investors from abroad putting money into American companies and other holdings. About 55 members of the PiYi group began the week in Texas at an event featuring former President George W. Bush and then split into teams that visited six states, including Wisconsin. In all, PiYi investors heard presentations from 180 companies.

The trip has been months in the making and involved extensive planning by the international team at the Wisconsin Economic Development Corp., which worked with others to select and prepare companies that fit within PiYi’s investment parameters.

While it’s too early to know for sure what, if any, Wisconsin companies will attract Chinese money, the outlook is promising. PiYi has already committed $27 million to a California biotech company and the firm’s managing director for global projects, Jay Riskind, said he expects a handful of deals to come out of the tour.

Also under discussion: PiYi may work with the state of Wisconsin to create a fund that would invest $100 million in the state over time.

It’s speculative at this point because money flows to where it finds the most opportunities, and Wisconsin had plenty of competition on the PiYi tour. However, the visit underscores what other investors and observers have been saying about Wisconsin for several years: It is home to a number of growth-ready companies.

In the parlance of investors, Wisconsin is an “inefficient market.” That means there are more potential deals here than there is money to finance them. It’s not just Wisconsin, either, but the entire Upper Midwest.

A major reason why the Upper Midwest is emerging as an investment hotspot is because homegrown investors, working with young companies, have laid the groundwork. It’s a trend that began in Wisconsin about 10 years ago with the formation of the first angel networks.

A survey released early this year showed that 15.9 percent of all angel investments nationally took place in the Upper Midwest, a share exceeded only by tech-rich California. Wisconsin itself is home to more than two-dozen angel networks, funds and other early stage groups, with total investments of more than $61 million in 2011 compared with less than $2 million in 2003.

Those investors – who have done much of the heavy lifting with selected companies in life sciences, information technology, advanced manufacturing and other sectors – are why larger investors such as the PiYi group are finding a reason to scout Wisconsin.

Two angel investors who embody that kind of risk-taking with early stage companies spoke last week in Green Bay at a meeting produced by the Wisconsin Technology Council. Charlie Goff of the NEW Capital Fund and David Ward of Angels on the Water, a group based in Oshkosh, talked about their angel funds and what goes into their investment decisions.

“There are a lot of undiscovered entrepreneurs in this region,” said Ward, an economist whose credentials include co-founding the Origin Investment Network in La Crosse in 2001. That was a sentiment echoed by Appleton’s Goff, who launched his first fund in 2006 and recently began investing out of a second fund that’s more than double the size of the first.

Both investors agreed they’re reviewing a significant number of deals – Goff has reviewed 70 business plans already this year – and that good companies can be found in a mix of business sectors. What both investors need, however, are more upstream investors who can pick up where they leave off. In other words, major investors who can afford the much larger rounds of investment needed to help emerging companies grow.

That’s why it’s important that groups such as PiYi, as well as domestic venture funds, are drawn to Wisconsin. They can provide the money and the connections to complete the investment cycle – and help homegrown angels cash out at the right time.

In Wisconsin, all types of investors are needed: Those who help at the outset and those who help small companies get big. And the healthiest approach of all is one that nurtures both.

Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.