The Badger Fund of Funds has yet to make a single investment,
but it can be argued it’s already a success.

When the Wisconsin Legislature voted in 2013 to invest $25
million from the state in an early stage fund, later named the Badger Fund of
Funds, everyone knew the privately matched fund wouldn’t be big enough to solve
the state’s venture capital needs by itself.

But the fact Wisconsin lawmakers showed strong, bipartisan faith
in the state’s start-up economy sent a message to the broader angel and venture
capital community. That message was: Keep an eye on Wisconsin; something good
is cooking there.

As the Badger Fund of Funds organizes its regional network of
“recipient funds” that will eventually invest in young companies,
other early stage funds are setting up shop in Wisconsin and some familiar
players are raising new funds. It’s a sign that investors see enough deals to
go around.

Read this commentary in the Milwaukee Journal Sentinel here

“We believe the deal flow in Wisconsin is more than
sufficient,” said David Guinther, a founding member of WISC Partners, an
early stage fund launched by UW-Madison graduates who made their mark in
California’s Silicon Valley. “I’ve seen amazing changes in our ecosystem
(in Wisconsin) since I came back five years ago.”

Guinther has the credentials to know. He’s been involved in
company building, corporate turnarounds and funding rounds from angel to
initial public offerings with a variety of tech-based companies, from health
care to consumer products.

Others involved in WISC Partners include Michael Splinter, the
chairman of Applied Materials Inc., which produces precision materials used in
semiconductors, flat panel displays and solar panels.

Guinther’s assessment of young, investment-worthy Wisconsin
companies was shared by Tom Schuster, general managing partner in the Wisconsin
Super Angel Fund. Both spoke separately last week to the Wisconsin Technology
Council board of directors.

“The deal flow is accelerating here, and it’s getting
better,” said Schuster, a corporate turnaround specialist turned early
stage investor. “Many of them are the kinds of deals you can bring to the

WISC Partners has invested in one company since its founding in
2014, and the Wisconsin Super Angel Fund has invested in eight in just over two
years. Other recent additions include:

■ BrightStar Wisconsin Foundation, a venture donation program
based in Milwaukee.

■ 4490 Ventures, an information technology fund with money from
the State of Wisconsin Investment Board and the Wisconsin Alumni Research

■ CSA Partners, another Milwaukee-based fund.

■ Madison HealthX Ventures, which is expected to make its first
investments this year.

■ American Family Ventures, an example of a corporate venture
fund with state roots.

A number of angel networks, angel funds and venture capital
funds continue to work with emerging companies. Those include the Golden Angels
Investors in Milwaukee, Wisconsin Investment Partners in Madison, Chippewa
Valley Angels in Eau Claire, Capital Midwest Fund in Mequon (which is raising a
new fund), Venture Investors in Madison, the NEW Capital Fund in Appleton and
Baird Capital, a Chicago fund with offices in Wisconsin and historic roots in
the state.

The Badger Fund of Funds has deep state roots in Kegonsa Capital
Partners in Fitchburg. Its partner is Sun Mountain Capital, which is based in
Santa Fe, N.M., and which manages similar funds in other states and provinces.

Other investors outside Wisconsin have found the road map.
Recent investments have come from Great Oaks Venture Capital, Drive Capital,
Chrysalis Ventures, Arboretum Ventures, Great Point Partners, Open Prairie
Ventures, Chicago Ventures, LightBank, Hyde Park Venture Partners, Google
Capital and more.

With 180 portfolio companies, Great Oaks is based in New York.
Its Wisconsin principals, led by Waukesha County native John Philosophos, are
raising a separate Midwest-centric fund. Called Three Oaks Venture Fund, it will
invest in tech-based early stage companies located primarily in Wisconsin and
the Upper Midwest.

“The Midwest and Wisconsin in particular are under-served
by venture capital firms,” reads a portion of the pitch deck for Three
Oaks Venture Fund. The opening slide? A picture of the Wisconsin Capitol in

The early stage investing landscape in Wisconsin is greening as
spring rolls ahead. Not only do the emerging funds have expertise in different
industry sectors, they offer varied structures, terms and advisory platforms to
companies in which they may invest. That’s a healthy mix that will help grow
Wisconsin’s early stage garden.