Panelists representing some of the state’s largest corporate VC funds spoke yesterday at the Wisconsin Entrepreneurs’ Conference in Milwaukee.
“I have a small team, but I can tap into the vast resources of my company,” said Craig Schedler, venture partner with Northwestern Mutual Future Ventures.
The fund is one of several created in the state in recent years. According to the Wisconsin Technology Council, which puts on the conference, corporate venture capital has more than doubled in the past five years, reaching an all-time high in 2018.
Schedler says Northwestern Mutual has entire divisions of experts in various subject matters such as cybersecurity and medicine that he can call and get answers.
“I think it’s a no-brainer, right?” said Jed White, managing director for TASC Ventures. “You get access to a lot more expertise a lot more easily … If you’ve got a company that knows the industry, and they must because they’re willing to invest, that can add value to your company immediately.”
Brian Kaas is managing director CMFG Ventures, the VC arm of CUNA Mutual Group. Through the larger company, he says the fund has relationships with around 5,600 credit unions and 1,400 banks. He calls it “the holy grail” for companies seeking investment from the fund, which has access to a large sales force.
“For certain companies, we have full sale distribution deals, where we’re selling the company’s platform into banks and credit unions,” Kaas said. “A lot of times they might have a sales force of one or two, and when they can have access to 300, that provides incredible value.”
According to White, the benefits of a traditional VC fund have “always been” operational experience and access to more capital. He said corporate funds cover both of those areas in excess.
“The benefit of a startup company is not just a new idea,” White said. “There are lots of smart people that work in our companies that have new ideas all the time. The benefit of a startup company is their ability to get that idea into the world and innovate on it really quickly. That’s what bigger companies aren’t good at.”
As corporate venture capital funding has been trending up, Wisconsin’s corporate VC funds have been looking around the country for complementary startups.
“I think all of us spend a fair amount of time on the road,” White said. “The fact is, we’re all here in Wisconsin. … We would love to do more deals in Wisconsin; all of us would love to do more deals in our backyard. But you know, if they’re not there, they’re not there. And you’ve got to go where the deals are.”
Kaas said CMFG Ventures has a strategic focus for its investments, and looks mostly at companies working in financial technology.
“There have been very few companies that have emerged in that space,” he said. “But we certainly are looking forward to the day that we’re able to invest in Wisconsin.”
The Wisconsin Entrepreneurs’ Conference was in Milwaukee June 4th and 5th. See event details: https://wisconsintechnologycouncil.com/entrepreneurs-conference/