Lisa Johnson, the Madison entrepreneur who is vice president of innovation for the Wisconsin Economic Development Corp., had a front row seat at a recent gathering of angel investors from across the United States and beyond.

Her takeaway: Many of those investors envy what Wisconsin has done to stimulate angel investing over time.

“There was no question that we’re viewed as being an innovative state when it came to (investor tax credits) and other programs related to angel investing,” said Johnson, who attended the March conference of the Angel Capital Association. “At the same time, there’s so much more we can do to improve our programs and to help more startups.”

Johnson, who was an executive at Semba Biosciences and Novagen, knows what early stage companies need to grow – and that often involves angel and venture capital. She brings that experience to her new chair at WEDC, the successor agency to the state Department of Commerce, where the importance of startups in Wisconsin’s economy is an everyday topic.

The angel conference, attended by investors from 49 states and more than 20 countries, provided the backdrop for a sneak preview of an annual report on Wisconsin’s investment climate. Formerly released Wednesday, the 2012 Wisconsin Portfolio charted angel capital deals for 2011 as well as venture capital rounds for the same year.

Wisconsin firms raised more than $152 million in early stage funding in 2011, reflecting a record year for angel investments but a decline in venture capital financing from 2010 totals. The total showed venture capital investments at $91.7 million – down about 30 percent. Angel investments, including angel groups and individual “super-angels,” increased to $61.1 million, up about 20 percent.

Total early stage investments charted by the Wisconsin Angel Network for 2010 were $180.9 million, with $130.7 million in venture capital investments and $50.2 million in angel group and individual investments.

The number of venture deals in Wisconsin stayed fairly steady in 2011 with 22 transactions, compared to 24 in 2010, while the number of reported angel deals increased from 54 to 63. Because some companies attracted both angel and venture financing, there were 76 Wisconsin companies that received some type of early stage financing.

Since 2003, when angel network-only investments were pegged at $1.74 million, there has been a 35-fold increase in angel group and individual investments reported through WAN, which is part of the Wisconsin Technology Council. During that same period, the number of angel groups grew from five to 27, one of the highest per capita totals in the nation.

Other states are catching up, however. Minnesota and Nebraska essentially copied Wisconsin’s investor tax credits law, which took effect in January 2005, and took it one step further by allowing out-of-state investors to collect credits. About 30 states have created state-leveraged venture capital funds, which are focused on investments that follow angel rounds.

This session of the Wisconsin Legislature will end without action on major venture capital legislation, which would have allowed the state to create a “fund-of-funds” to attract private capital from outside Wisconsin while spurring new venture funds at home.

Venture capital is vital to a startup economy because angel groups and individual investors can only take most companies so far. Venture capital is often required to accelerate company growth – and to create more jobs. Unless angels can pass the baton to venture capitalists or find other exits for their investments, companies can stall out or move to other states in search of additional capital.

“The meteoric growth of angel investment in Wisconsin proves we are doing a lot of things right,” said Tim Keane, managing director of the Golden Angels, one of Wisconsin’s largest angel networks. “Sustaining this growth will require the concerted effort of investors, entrepreneurs and state policymakers. We are especially concerned about our follow-on capacity for these companies – an issue we need to address.”

Wisconsin’s support for its homegrown angel investors is a nationally recognized success story. After the smoke clears from the state’s political fires, perhaps Democrats and Republicans alike will come together to build on that success – and keep Wisconsin in the lead.

Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal. To read the full report, visit