By Tom Still

MILWAUKEE, Wis. – At the lakeside unveiling of a $100-million corporate venture fund, the chairman of the Foxconn Technology Group said he was pleased, as the “new kid on the block,” to be a part of a team that included Advocate Aurora, Johnson Controls and Northwestern Mutual.

The truth be known, Foxconn founder Terry Gou and his team of “new kids” are pushing the older crowd to do more.

Wisconsin and especially the Milwaukee region have always boasted a cadre of national and global companies. Few of those companies, however, have elected to invest in the venture capital asset class most likely to spark young companies.

It took the arrival of Foxconn, the world’s leading contract manufacturer of consumer electronics, to open more homegrown corporate eyes to taking on more risk by making technology investments at home and abroad.

The $100-million fund announced at Discovery World in Milwaukee won’t be bound by geography – few private venture funds are restricted in that way – and it can be expected to invest in strong tech deals in the region, the United States and beyond.

Still, the nature of venture capital is the same everywhere: Many investors prefer to invest closer to home because they can better watch over their own deals, providing advice, management help and money as the company grows.

Wisconsin’s existing Badger Fund of Funds is a different model for several reasons, starting with state government’s decision some years ago to invest on the same basic terms as private investors. That state investment means the Badger Fund of Funds is confined to Wisconsin companies, or young out-of-state companies it can persuade to move here.

The Badger Fund is also built to target the youngest companies, many at the “seed stage,” versus the full range of investments the Wisconn Valley Venture Fund could take on.

Both models can work together. The Wisconn Valley fund will eventually help many of Wisconsin’s existing funds and angel networks by providing another potential partner. It remains to be seen exactly how the Foxconn-led fund will be structured, however, and whether it will invest only directly in companies or through other funds, as well. Many observers would prefer the latter because existing funds provide experienced feet on the ground.

The Foxconn-led fund was one of two major announcements within two days, the first being its plan to invest $100-million in the UW-Madison College of Engineering for interdisciplinary research. The university will match that amount over time.

There have been grumbles for years that not enough Wisconsin companies have invested in the state’s academic research and development partners, sometimes turning to other major universities first for their research needs.

Foxconn, the “new kid,” is sticking close to its new home as it partners with UW System schools, tech colleges and private universities. Ideally, UW-Madison and other campuses should attract private partners on a regular basis – a phenomenon to be welcomed, not scorned.

Both developments have been criticized by those who still don’t believe Foxconn will be a permanent fixture in Wisconsin or that the company is merely recycling state tax credits to pay for other endeavors.

Combined with previous announcements about opening innovation centers in Green Bay and Eau Claire; the creation of a statewide “smart cities” competition for college and university students, faculty and staff; and the construction of the massive Racine County plant itself with almost all Wisconsin contractors; it’s hard to characterize Foxconn as a hobo passing through the state.

State tax credits won’t be paid until there is economic activity to justify them, as spelled out by the state contract. That activity will be measured by jobs created and dollars invested on a schedule that all policymakers will closely monitor.

Wisconsin’s “new kid” is still an outsider to some who don’t think the cost is worth making the state economy more globally connected and tech-savvy. That view may change as the company and its investments produce jobs and opportunities that help keep young people at home.

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