Wisconsin’s investment landscape is restricted by an overall lack of capital, according to a panel of investors.But they said the higher capital efficiency of investing in the Midwest is drawing the attention of larger coastal funds.
Allos Venture Managing Director David Kerr noted the cost of housing and hiring talent are much lower in the Midwest than the Bay Area or elsewhere, calling it “one of the greatest opportunities” of investing in the region.
“If somebody raises a round, those dollars are going to go much further,” he said yesterday at the Early Stage Symposium.
But at the same time, he said Wisconsin and the surrounding area lacks experienced entrepreneurs that have taken companies past the $100 million mark.
“We don’t have a lot of talent in those areas to go around,” he said.
Another Midwest investor panelist, Laurence Hayward, pushed back on the notion of a talent gap, saying “there’s as much talent here as anywhere.”
Hayward is the founding partner of Independence Equity, an early-stage venture fund, and co-founder of Cornerstone Angels, which has invested in over 60 companies in the past 13 years. He argued the Midwest has no shortage of raw talent, though he acknowledged a gap in experience.
Still, he said “a lot of the most successful entrepreneurs are first-time entrepreneurs.”
Ryan Weber, founder of a Midwest venture fund called Great North Labs, says other fund managers in the region are starting to see more investors from the coasts travel to the Midwest for deals.
“If you were to ask me five or 10 years ago, did you have to leave the Midwest? It was absolutely yes,” Weber said. “Now, I think we’re starting to see that change a little bit.”