Wisconsin is often dinged for being a state
with relatively low numbers of start-up companies, which is true given the mix
of start-up flavors that are counted in such surveys — from mom-and-pop stores
to lifestyle businesses to the “gazelles” that aspire to land angel
and venture capital.

If the measure is focused on fast-growing
gazelles, however, there are indications that Wisconsin is turning the corner
on producing the kind of companies that attract investors and produce
significant numbers of jobs.

That is evident in some hard data regarding
what investors call “deal flow,” meaning potential investment
targets, as well as anecdotal evidence of outsiders taking an increasingly hard
look at what Wisconsin can offer.

Let’s start close to home with two long-standing
projects of the Wisconsin Technology Council — the statewide Governor’s
Business Plan Contest and the Wisconsin Angel Network.

Read this commentary in the Milwaukee Journal Sentinel here

The business plan contest has attracted 2,905
entries since its inception in 2004, including nearly 300 in 2014 alone.

Perhaps most significant is that the top 25
finalists in the contest have collectively raised $160 million over time,
predominantly from private investors, and three-quarters of those companies
report they’re still in business. The contest is followed by investors who know
it offers a fresh supply of tech-based businesses every year.

Among the roles of the Wisconsin Angel
Network is charting angel and venture capital investments in Wisconsin, which
is done through its annual report, “The Wisconsin Portfolio.”

The report covering 2013 tracked investments
in 86 companies, up from about 75 in each of the preceding years. Overall deal
activity in 2014 appears on pace because more young companies in the pipeline
are maturing to the point that investors are interested.

A major link in that pipeline is the
Qualified New Business Venture program run by the Wisconsin Economic
Development Corp., which is the certification pathway for companies that want
to qualify potential investors for state tax credits.

Those credits have existed since 2005, but
limited numbers of companies applied for QNBV status in the mid-2000s. Those
numbers have grown sharply since 2010 and about 170 companies are listed today.

How else do investors find deal flow?

Through events and conferences such as the
Wisconsin Early Stage Symposium that attract presenting companies, through a
growing number of accelerators that offer mentoring as well as financial help,
through academic programs that are geared toward entrepreneurs — and often by
just showing up to kick a few tires on cars in the lot.

The latter is happening more frequently as
investors and others from outside Wisconsin learn more about the state’s
emerging companies.

A ready example will take place Monday, when
a private equity firm and a major health care system from the southeast United
States will meet with eight Wisconsin companies in Madison to learn more about
new health technologies. The meetings were arranged by the Tech Council and
Wisconsin Angel Network, which works with early stage investors in Wisconsin
and beyond.

Here are other examples reported this month
alone that illustrate how investors can find deal flow:

■ Madison’s Forward Festival continues
through Thursday with multiple forums that highlight young companies.

■ The Techstars Patriot Boot Camp will be
held Sept. 26-28 in Madison, expanding from annual events held in Washington,
D.C., and New York City. It focuses on veterans and active military personnel
who are launching companies.

■ Groups such as Startup Milwaukee and
Innovation in Milwaukee, or MiKE, are encouraging the area’s academic
institutions to launch a nonprofit start-up center to partner with industry.

■ The University of Wisconsin-Milwaukee’s
Student Startup Challenge selected 10 winners in its most recent competition.

■ The UW Extension and WEDC recently awarded
11 grants through the “Ideadvance” project, which is designed to help
companies ramp up quickly.

■ Seventeen projects have been chosen for the
launch of the new Discovery to Product, or D2P, program. The partnership
between UW-Madison and the Wisconsin Alumni Research Foundation is aimed at
taking promising campus inventions and helping to speed their entry into the

There’s a reason more funds are launching in
Wisconsin and why funds, accelerators and corporate investors from outside the
state are showing interest: There are strong emerging companies in a mix of
sectors, from biotechnology to software to advanced manufacturing.

Wisconsin certainly isn’t Silicon Valley or
Austin, Texas, just yet, but the start-up stars are aligning in a way that will
help the state produce more high-growth companies over time.