By Tom Still
What do Spinback, Silver Spring Network, Study Blue and SLIL Biomedical all have in common (other than names that all begin with “s”)?
They are companies born in Wisconsin but which felt compelled to move away, or largely so, primarily because they couldn’t find enough capital to grow here.
Now, what do Logistics Health Inc., TomoTherapy and Pinstripe have in common?
These are companies that attracted venture capital – sometimes from outside Wisconsin – that allowed them to grow and add hundreds of jobs here.
The list of success stories goes on, of course, but so does the list of lost opportunities.
Read this commentary in the Milwaukee Journal Sentinel here.
That message was at the core of two recent events surrounding the introduction of Assembly Bill 181, which will create a state-leveraged fund to invest over time in promising companies with innovations in advanced manufacturing, agriculture, engineered products, information technology, medical devices and medical imaging.
Entrepreneurs from a broad spectrum of Wisconsin’s startup economy told their stories at a news conference announcing bipartisan agreement on the bill, which would match $25 million in state dollars with private investment, and at a public hearing a week later. An Assembly committee is expected to vote on the proposal next week.
“It’s kind of like having a great baseball team: You develop the players and risk losing them to the New York Yankees,” said Todd Asmuth, chief executive officer of AquaMost, a company that cleans water used in hydraulic fracturing, or “fracking,” as well as other settings.
AquaMost, which is emblematic of Wisconsin’s emerging water technology industry, has raised money from investors in Wisconsin. As Asmuth explained, however, not every company has been as fortunate – and many could be tempted to move elsewhere.
Shoban Thakkar, part of the management team at Gristmill Studios, a gaming startup in Madison, echoed that concern.
“Frankly, we would love for the money to come from Wisconsin, but if it doesn’t, we will look elsewhere because we need the money,” Thakkar said.
Toni Sikes is a serial entrepreneur whose latest startup, The Art Commission, has grown to 15 employees in 15 months. Other Wisconsin startups could do the same, she said, if more capital was available. Sikes has raised tens of millions of dollars in venture capital on the East and West coasts over time, but said she wishes more capital could be found closer to home.
Ryan Shepherd, the CEO of Phyllotech, told lawmakers how he was preparing to move his lab when he got word about some desperately needed funding. Shepherd, who moved his company from Kentucky to Wisconsin, would prefer not to cut it that close again.
“Where I see this funding source being used is not only as the fertilizer to help grow companies, but it can also be used to allow companies to survive while they’re developing a technology,” Shepherd said.
Janet Phillips, CEO of Vector Surgical, has worked to expand her company’s business in 48 states, Canada and northern Europe since winning the Governor’s Business Plan Contest in 2007. She said a state-leveraged fund would help build upon existing state and private resources that will help others do the same.
The recurring message: If Wisconsin wants to keep more of its homegrown ideas, talent and companies at home, it needs to invest in its future.
Assembly Bill 181 can help. It will send a message to the investment community from coast-to-coast that Wisconsin has an impressive supply of high-growth companies and that it wants to create more.
It will tell the nation that Wisconsin is ready to compete for its fair share of a $50-billion-per-year angel and venture capital industry that has been clustered in a relatively few states for too long.
It will tell other states – more than 30 that have some kind of investment program – that Wisconsin is ready to join them in the competition to create a more vibrant economy.
It will tell our communities and parents that Wisconsin understands the need to build the kind of economy that will stop “brain drain” and keep our best and brightest kids at home.
It will build on a solid foundation of angel-backed companies that basically didn’t exist 10 years ago, and upon an entrepreneurial culture that is emerging across the state.
Perhaps most important, it will tell our homegrown entrepreneurs that there is hope for them and their companies.
That’s not because every young company will attract an investment from the fund this bill will create – that’s simply not possible with the size of the investment – but because it signals the state cares about what they mean to the state’s future.
Wisconsin has ideas, intellectual property and talent. It even has a start on the capital. Passage of Assembly Bill 181 will help build on that foundation – and signal that Wisconsin is in the company creation game to win.