MADISON – Improving access to capital for Wisconsin
entrepreneurs, building the supply of human capital, enhancing the startup and
business climate, and improving tech development, delivery and transfer are
four major themes of the Wisconsin Technology Council’s 2015 “white papers”
report.
The Tech Council is the bipartisan, non-profit science and
technology policy adviser to the governor and the Legislature, and a catalyst for
tech-based development in Wisconsin. The Tech Council periodically issues
“white papers” and special reports to assist those policymakers.
“The ideas offered in the Tech Council’s 2015 white papers
are intended to set the table for a renewed public discussion about improving
the state’s tech-based economy,” said Toni Sikes, chairwoman of the Tech
Council. “As the state weighs its budget priorities for the next biennium,
policymakers deserve to hear ideas that will focus on the creation of
next-generation jobs for Wisconsin – and keeping our best and brightest young
people at home.”
Here are highlights of the 2015 report, “Investing in
Next-Generation Jobs”:
Increasing access to capital for Wisconsin
entrepreneurs:
There are eight recommendations in this category.
1. Raise
the $8 million cap on credit-eligible investments in an Act 255 firm, unchanged
since 2005, to $12 million.
2. Raise
the credit from 25 percent to 40 percent for the first $1 million in eligible
investments.
3. Increase
Wisconsin’s investment in venture capital over time to help fuel the state’s
entrepreneurial growth.
4. Eliminate
state capital-gains taxes on investments held, three years or longer, in a
Wisconsin business.
5. End
tax on capital raised by C corps deemed “foreign corporations” making sure
changes are targeted to firms of a certain size, age and other factors.
6. Establish
a process to leverage unused Act 255 credits via legislative approval for WEDC
to handle as a direct matching fund to privately vetted investments.
7. Create
and sustain a Wisconsin follow-on platform to federal SBIR Program.
8. Grow
the next generation of Wisconsin early stage capital professionals akin to the
state of Michigan model.
Improve technology development, delivery and transfer: There are four
recommendations in this category.
1. Build
upon interdisciplinary clusters and “centers of excellence” first highlighted
in 2002 through the Tech Council’s “Vision 2020: A Model Wisconsin Economy.”
2. Support
the creation of enhanced cyberstructure in Wisconsin.
3. Work
with the state’s congressional delegation to identify ways Wisconsin companies
and institutions can help meet national science and technology priorities
(National Academy of Sciences).
4. Encourage
the state not to enact laws or rules that put the state at a competitive
disadvantage in terms of technology research and development.
Build Wisconsin’s
supply of human capital: There are three recommendations in this category.
1. Support
state funding for the Youth Options and Course Options programs, which enable
students to earn college credits while still in high school.
2. Make
student financial aid more broadly available.
3. Encourage
support from the Department of Workforce Development for creation of an
“information assurance” training program to ensure that Wisconsin have trained
professionals in cybersecurity and related fields.
Enhance Wisconsin’s startup and business climate: There are seven
recommendations in his category.
1. Create
a merger and acquisition “strike force” or “welcome wagon” to work with
companies that acquire Wisconsin-based companies and help them acclimate to the
state.
2. Adopt
a benefit corporation as a new corporate legal entity in Wisconsin.
3. Revise
legislative requirements for “schedule of expenditure” reports that place extra
costs and administrative burdens for startup companies.
4. Review
unemployment compensation/workers compensation taxes on small businesses.
5. Continue
to focus on the need for enhanced broadband connectivity in Wisconsin.
6. Enhance
access to out-of-state power.
7. Make
it easier for Wisconsin to participate in the “sharing economy.”
In addition to recommendations to state policymakers, ideas
for Wisconsin’s congressional delegation include:
- Keep
the existing “accredited investor” threshold currently being reviewed by the
Securities and Exchange Commission (individual income exceeding $200,000 or
joint income with a spouse exceeding $300,000 and/or $1 million net worth). - Support
for the HALOs Act, or “Helping Angels Lead Our Startups Act,” which provides
clearer definition of what constitutes “general solicitation” and clearly
exempting demo fairs, pitch conferences and angel group presentations. - Create
a federal tax credit, similar to Wisconsin’s Act 255 tax credit program that
would incentivize investing in technology startups. - Create
new visas for U.S.-educated students and entrepreneurs. - Eliminate
artificial per-country caps for employment based immigrant visas.
“Our board is made up of people who understand Wisconsin’s
tech economy from a variety of angles – as company founders and executives,
researchers, investors, educators and service professionals who work with
emerging companies every day,” said Tom Still, president of the Tech Council.
“Their ideas, along with those contributed by our members across the state,
form the foundation for this report.”
Still noted that past white papers have contributed to a
number of executive and legislative branch actions, including:
1. Passage
of the Badger “Fund-of-Funds” in 2013. This $25 million investment by the state
will be matched by private dollars on a 2-to-1 basis as the venture capital
fund becomes established in 2015;
2. Passage
of AB-729 in 2014, which allows the UW System to pursue classified research
projects through a mechanism that allows for faculty governance with regular
reporting to the Legislature;
3. Passage
of the Act 255 investor tax credits (2004) and revisions to the nationally
recognized program (2009 and 2013);
4. Creation
of the Wisconsin Angel Network, which has expanded from five networks and angel
groups in early 2005 to two-dozen early stage groups today;
5. Expansion
of the scope of allowable bonding projects for the Wisconsin Health and
Educational Facilities Authority;
6. Repeal
of the shareholder wage lien law, which discouraged investment in Wisconsin
startup companies;
7. Improvements
in laws governing entrepreneurial activity by University of Wisconsin faculty;
8. Improvements
in processes and regulations vital to expanding broadband availability,
especially in rural Wisconsin;
9. Extension
of the “single-sales factor” sales apportionment for corporate income to
technology and service firms in Wisconsin;
10. Enactment
of an Education Tax Credit to assist employers in hiring and training workers;
11. Support
for the “Emerging Technology Centers” concept within the UW System, which was
first envisioned as Centers of Excellence in the Tech Council’s Vision 2020
report; Support for an Interdisciplinary Research Center, also through Vision
2020, which was consistent with the Wisconsin Institutes for Discovery and
Morgridge Institute for Research, which opened in December 2010;
12. Broader
recognition of the economic value of academic research and development in
Wisconsin, which attract nearly $1.3 billion in sponsored research each year;
13. Creation
of the I-Q Corridor branding concept and support for multi-state relationships;
14. Extension
of funding for the WiSys Technology Foundation, which assists UW System
campuses in transferring technology to the marketplace.
To learn more, visit: http://www.wisconsintechnologycouncil.com/publications/white_papers/
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