By Tom Still

MADISON, Wis. – There’s no single reason why early stage financing in Wisconsin soared to new heights in 2021. Instead, a combination of factors led to a record year for angel and venture capital investment in some of the state’s promising young companies.

Here are trends that pushed angel, venture and venture debt financing from a record $483.6 million in 2020 to $810.8 million spread over 111 reported deals in 2021, a total that will only climb higher once state tax-credit information is finalized this spring.

Wisconsin wasn’t alone. Much of the U.S. economy was awash in cash in 2021, interest rates were at historic lows and money was looking for potentially profitable places to land. Venture and angel capital were one such asset class, and many states and regions have reported banner years.

The Midwest, in general, is overcoming its historic “flyover” status. Venture capital has been primarily a coastal state sport for decades, with California, New York and Massachusetts alone accounting for $3 out of every $4 invested. Those are still the nation’s venture hubs, but investors are increasingly finding strong deals in the Heartland.

“The Wisconsin deal and dollar numbers are consistent with a 2021 surge in such investments nationwide, and representative of the rise in early stage investing in the Midwest, in particular,” said Bobby Franklin, president and CEO of the National Venture Capital Association. “With its great research base, diverse technology and company leadership, the NVCA is not surprised that Wisconsin continues to make progress.”

As young companies mature, they tend to raise more money. Sixteen deals out of 111 charted by the Wisconsin Technology Council accounted for $655 million of the $810.8 million, ranging from $210.7 million raised by Fetch Rewards and $150 million by SHINE Medical Technologies through a handful of deals in the $10 million to $15 million range. Not so long ago, a big Wisconsin deal was in the $5 million to $10 million range. The 2021 average was $7.3 million, up sharply from $4.2 million in 2020 and $1.6 million in 2015.

Even with more big deals, there were no shortage of smaller raises. The median, or frequency midpoint, for all 2021 deals remained at $1 million – the same as 2020. The means there were significant numbers of young companies raising angel and venture capital in smaller amounts, often for the first time. Half of all deals were $1 million or more; the other half were less than $1 million.

It’s not just a Madison phenomenon anymore. While Dane County companies still see more angel and venture investments than any other place in the state, southeast Wisconsin and the Fox Valley and Green Bay regions are on the rise. Fifty of the 111 deals involved companies based in those regions.

Investors outside Wisconsin have “discovered” the state. There was a time when Silicon Valley investors never ventured more than a few miles, even blocks, from their offices. Plenty of potential deals were within easy grasp. Not that most VCs don’t still stick close to home, but many are looking farther afield when the technology, management and valuation are right. Seventy-three investors from outside Wisconsin were involved in 37 Wisconsin deals in 2021.

Meanwhile, there are more Wisconsin investors, some with “repeat” funds. Twenty years ago, Wisconsin angels and VCs were almost as rare as hodags in Rhinelander, with just a half-dozen organized groups or funds. Today, there are about 40 such groups, including some corporate investors.

The overall infrastructure keeps getting stronger. Along with more investors, there are more support paths for entrepreneurs and young companies. They come in the form of accelerators, co-working spaces, regional economic development groups, statewide efforts and more. Bipartisan public policy led to the enactment of investor tax credits to reduce risk exposure (enacted in 2005 and modified several times since) and efforts such as the Badger Fund of Funds. The latest proposed changes to the tax credits law are awaiting action in the Wisconsin Legislature.

It’s often said that success has many fathers and mothers. In 2021, multiple parents helped finance a vintage brood of deals.

Still is president of the Wisconsin Technology Council. He can be reached at