Connecticut launched the nation’s first state-leveraged venture capital program 35 years ago. Today, more than 30 states have similar funds, including many of Wisconsin’s neighbors and peers.

The story of Connecticut’s success in building its supply of venture capital is among the reasons why Wisconsin should also embrace a bipartisan approach to developing sources of capital for its high-growth, early stage companies.

Connecticut has nearly 3.6 million people versus Wisconsin’s 5.7 million, but it routinely outperforms Wisconsin when it comes to landing its proportional share of venture capital. Since roughly the time Connecticut created the “Connecticut Product Development Corp.” to leverage private investments, about $6.6 billion has been invested in 502 in-state companies. Over that same period, $1.2 billion in venture capital has been invested in 166 Wisconsin companies.

Sure, Connecticut is wedged between New York and Massachusetts, two venture capital leaders, but Wisconsin is located between Illinois and Minnesota, which also perform well in venture financing. So, what’s the real difference? About 45 percent of Connecticut’s venture capital investments have come from home-grown VC firms, compared to 5 percent of Wisconsin’s investments.

Expanding the amount of venture capital under management in Wisconsin is one of the recommendations of “Building Capital & Jobs: The case for a venture capital program in Wisconsin.” The report was released Sept. 14 by the Wisconsin Growth Capital Coalition.

Wisconsin has 1.84 percent of the nation’s population but roughly one-half of 1 percent of U.S. venture capital investments, based on five-year averages. Worse yet, it has about one-tenth of 1 percent of all venture capital under management. That’s mostly because there are so few venture firms in Wisconsin, which otherwise has all the ingredients for success.

The state’s assets include a strong tradition of entrepreneurship, above-average research and development investment, high production of patents and other intellectual property, and a skilled work force created, in large part, by the state’s education system. Wisconsin also has one of the strongest angel capital foundations in the country. But it lacks venture capital, which is often needed to bring young companies to the next stage.

Why is this capital important? Venture-backed companies in the United States represent 21 percent of GDP – at an investment rate of about .2 percent. That’s a huge return. Those companies also represent 11 percent of the nation’s private employment. That’s 11.87 million jobs.

If Wisconsin had received its proportional share of venture capital over time, that would mean 259,215 jobs today versus the 60,156 venture-rooted jobs created over time.

The Wisconsin Growth Capital Coalition, a broad coalition of companies, organizations and angel networks and venture funds, examined Wisconsin’s standing versus peer states, neighboring states, U.S. population and other factors, and concluded Wisconsin could absorb nearly four times the investment dollars it receives today. Its report recommends the state:


  • Create a state-leveraged “master” fund, called a fund-of-funds, which would invest in 14 to 20 venture capital funds over time. These recipient funds will raise an additional $350 million to $1.05 billion and commit to offices, staff and investments in Wisconsin.
  • Catalyze the development of indigenous Wisconsin funds by committing a minimum of one-third ($117 million at the target of $350 million) to certified Wisconsin funds. These “home-grown” funds have existing structures, network connections and deal-flow pipelines, a portion of the money can be put to work quickly.
  • Incent additional Wisconsin angel investment through the creation of accelerator funds. These smaller, targeted funds would co-investment with the angel networks and funds that are closest to the entrepreneurial action in Wisconsin. This would also enhance deal flow for venture funds later in the capital continuum.
  • Invest across the full capital continuum, from seed stage to growth stages.
  • Construct the program in a way that mitigates taxpayer risk and pays back the taxpayer’s investment.
  • Competitively select professional fund management to bring experience, national perspective and existing co-investment relationships to Wisconsin’s table.
  • Target industry clusters with high-growth, high-wage job creation potential.

The Wisconsin Legislature has returned for a brief floor period this fall. Job creation and economic growth are likely to dominate the agenda. Lawmakers on both sides of the aisle and Gov. Scott Walker appear committed to getting something done.

One of the best ways lawmakers can help on both of these related fronts is to create a state-leveraged capital program for Wisconsin.

 Still is president of the Wisconsin Technology Council and is the former associate editor of the Wisconsin State Journal. An online version of the report is available at: