Given our belief in rankings — and the most recent Ewing Marion Kauffman Foundation startup index from 2017 is as credible a source as any — Wisconsin is a black hole for startups.

Ranking dead last in the nation in startup activity for three straight years is a black eye for the Badger State, but it’s not as if good ideas aren’t being born in Wisconsin every day. Those ideas just need a little more nurturing before they can take root and become growing companies.

State officials know this, which is why the Badger Fund of Funds was created five years ago as a limited partnership to invest in Wisconsin-based venture capital funds that will in turn invest in Wisconsin-based new ventures. New businesses account for nearly all net new job creation, so fostering homegrown entrepreneurs stands to benefit everyone in Wisconsin.

Five years is a good, round length of time at which to examine the progress of the Badger Fund of Funds, although as it turns out, much of the Badger Fund’s work remains ahead of it. That’s because, while the state committed $25 million to the fund when it was created, fund managers were tasked to raise additional capital from the private sector themselves prior to any early-stage investment actually taking place. That’s a lengthy, arduous process that has only recently begun to yield fruit, notes Ken Johnson, managing director of Kegonsa Capital Partners, the Madison-based venture capital management firm that along with Sun Mountain Capital, a New Mexico-based investment firm, was pegged by the state to run manage the Badger Fund of Funds as Sun Mountain Kegonsa.

“The fly in the tale is the time it takes to raise additional capital,” Johnson explains. “As a Wisconsin taxpayer, state monies should prime the pump, not be the only water in the bucket. The Badger Fund team has worked hard to significantly increase the private sector match to the state’s priming.”

In Johnson’s Wisconsin fund-raising experience, it takes a month to raise $1 million from the private sector, and while raising money the fund manager is not paid. Each Badger Fund manager — there are seven — can spend 12 to 18 months raising matching private-sector capital. “Take it from someone who has done fundraising a number of times — it’s a very tough and ugly job,” says Johnson. Read the full story here.