By Tom Still

MADISON, Wis. — The second biggest year in Wisconsin’s angel and venture capital economy was 2022. Don’t expect a repeat in 2023.

That statement combines what is already known about early stage investments in Wisconsin for the past calendar year, and how national and international trends have continued a downhill track in 2023 with half of the year over.

It’s not a qualitative reflection on what attractive startup deals may be waiting to happen in Wisconsin, but a frank assessment of how potential angel and venture capitalists view the landscape over the short term. Over time, it’s likely a different picture.

Let’s start with the good news: In 2022, Wisconsin companies raised $640.2 million from angel networks, angel funds, accelerators, venture equity and venture debt funds, with a smattering of crowdfunding support. That’s according to the latest “Wisconsin Portfolio” report from the Wisconsin Technology Council, which has been collecting such data for 15 years.

It was Wisconsin’s second-best dollar total on record, eclipsed only by the $869 million invested in 2021, which was also a record-setting year nationally for such investments. The total number of deals was down in 2022, but the average investment size for Wisconsin rose and the median deal size remained at a healthy level.

A combination of factors, ranging from the lack of initial public offerings to higher interest rates, and from runaway inflation to global tensions, triggered a downturn in 2022 that caused the venture industry to recoil into its shell like a threatened turtle. This class of investors isn’t afraid to take risks, but even the most intrepid cannot buck an onslaught of market trends.

A turn may yet come in 2023, based on current market hopes for a “soft landing” versus a recession. In the meantime, Wisconsin investors and those who follow state companies from outside its borders can be expected to remain cautious.

For the longer term, angel and venture investment trends in Wisconsin look solid. Investment-worthy startups continue to be formed, although not quite at past rates — especially in the Madison area. Company valuations remain reasonable compared with what investors often see on the East and West Coasts. Investors from outside Wisconsin remain interested in the state for several reasons, including a growing corps of experienced managers. In fact, of the 107 deals charted statewide in 2022, 76 non-Wisconsin investors could be found in 32 of those transactions.

The trend line remains up. Over the eight-year period beginning in 2015, Wisconsin early stage companies have raised nearly $3.5 billion. About $2.5 billion of that total came in the last four years alone.

Average round size stood at just under $6 million in 2022, just shy of 2021’s record of $6.2 million but still the second highest on record. Sticking close to recent years, 49.5% of Wisconsin companies raised $1 million or more in 2022. In 2021, it was 50.5%; in 2020, 51%; and in 2019, 43%.

For 35% of early stage companies that secured funding, 2022 was the first year doing so while the rest received continued support. First-time funding has been in decline for several years, perhaps because the Madison startup scene has cooled. Other trends of note:

  • The Madison area declined in its share of total deals (47 deals for 43.9% compared to 50% two years earlier) while southeast Wisconsin increased (41 deals for 38.3%). Green Bay and the Fox Valley represented about 7.5%. Some other parts of Wisconsin are showing up in the data.
  • Healthcare and information technology deals represented about two-thirds of the total number of investments and 94% of all dollars invested.
  • Funding rounds led by female founders and CEOs remained low at 14%; however, when looking at management teams, women are represented in two-thirds of the companies that raised money in 2022.
  • The top 10 companies in terms of dollars raised were Fetch Rewards, SHINE Technologies, Elephas Biosciences, Moxie Health, Ensodata, Polco, Frontdesk, Synthetaic, Understory and Leo Cancer Care.

It’s already too late in 2023 to expect the year to approach Wisconsin’s 2021 record — let alone 2022. With stable markets and the right public policies, however, the state can resume its uphill climb in 2024.

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