By Tom Still
MADISON, Wis. – Karen Renee’s background as a professional court reporter alerted her to a recurring problem and a promising solution: Scheduling of court reporters and videographers can be a hassle for many in the justice system. Building a tech-based platform to facilitate marketing and scheduling for law firms, court reporting agencies and others would save time and money.
With that idea, eCourt Reporters was born in 2017 in Burlington, where the company has built a network that includes 1,800 vetted registrants and users in 49 of 50 states.
Continued growth means raising money, however, which Renee and co-founder Judy Gerulat have found isn’t always easy – unless they want to move from Wisconsin.
“We don’t want to go to the coasts. We want to grow here, we want to bring our staff and employees and we want them from the Midwest,” Renee said in describing how coastal investors typically ask them to uproot and move east or west.
The funding dilemma for young companies such as eCourt Reporters is not uncommon in Wisconsin, where the best and brightest can be tempted to leave because most venture capital is clustered in a few states – California, Massachusetts and New York representing about 80 percent of the U.S. total. Because venture capitalists generally like to be physically close to their investments, they often ask young companies to move in exchange for their infusion of cash.
Building on Wisconsin’s existing venture capital network to retain and grow young companies was the subject of a March 24 webinar that featured Renee and three others who discussed a proposal to create a “fund of funds” with a mix of public and private dollars.
“Something like the fund of funds would mean a world of difference,” Renee said during the webinar, which was produced by the Wisconsin Technology Council. The event also featured state Rep. Mike Kuglitsch, R-New Berlin; Sam Rikkers, the deputy secretary for the Wisconsin Economic Development Corp.; and Jason Fields, an early stage investor who recently became executive director of the Madison Area Regional Economic Partnership.
Included in the state budget bill is a proposal to invest $100 million from the state in a fund that would require a 2-to-1 private match, thus attracting more venture capital to Wisconsin. It would resemble existing funds in Indiana, Illinois and Ohio, three states that have elevated their venture capital profiles in recent years.
Because almost all net new jobs in the U.S. economy are created by companies five years old or younger, keeping those companies and the talented workers they attract is a priority.
Panelists agreed that would be a “double bottom line” for the state of Wisconsin, which could earn returns on the investment just like private investors while benefiting from the growth and retention of companies and workers, not to mention tax revenue from both down the road.
“With that growth will be the growth of jobs and our tax base,” said Rikkers, whose agency would have an oversight role under the proposal in Gov. Tony Evers’ budget plan. Rikkers emphasized it would be a privately managed fund once established, as the state does not want to get in the way of what private investors do best – size up markets, companies and returns.
While details deliberately remain to be worked out, the “Wisconsin Fund” would establish at least four and likely more recipient funds to manage investments. All state money must be invested in state companies over time. Experience in other states with similar funds indicates the private dollars often follow suit.
That is also true with a previous Wisconsin investment effort, the Badger Fund of Funds, which through Dec. 31, 2020, reported a private investment “multiplier” of more than $3 for every $1 invested by the fund itself. The Badger Fund of Funds was created in 2013 with a state investment of $25 million; it also invests only in Wisconsin companies.
Wisconsin has seen progress over time through initiatives such as investor tax credits and the growth in the number of angel networks and venture funds, but more must be done so that young companies such as eCourt Reporters can stay home. The “fund of funds” proposal can help Wisconsin build on its many assets, such as top talent, first-rate technology and a solid quality of life.
Some may ask, “Can Wisconsin afford investing in such a fund?” A better question is, “Can it afford failing to do so?”
Still is president of the Wisconsin Technology Council. He can be reached at tstill@wisconsintechnologycouncil.com
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