The proposed $100 million Wisconsin fund of funds may make the final state budget that's working its way through the Republican-led legislature, but it could look different than what Gov. Tony Evers originally proposed, according to legislators and advocacy groups.
The governor's proposed venture capital fund has bipartisan support but it lacks detail and is unlikely to pass in its original form, said Matt Cordio, co-founder of the Wisconsin Startup Coalition, an advocacy group representing startup founders that has been meeting with members of the legislature and other stakeholders.
"We’re optimistic that some sort of compromise could be reached," Cordio said Wednesday. "I think everyone agrees we need to invest in Wisconsin’s startup ecosystem."
Although the fund has bipartisan support — including from a group of eight former Wisconsin Economic Development Corp. and Wisconsin Department of Commerce secretaries — it still remains to be seen whether it will make the final 2021-2023 state budget.
"I haven't heard definitively whether the Republican majority will maintain the funding," Rep. Evan Goyke (D-Milwaukee), a member of the state legislature joint committee on finance, said in an emailed statement on Wednesday. "While a few initial conversations have seemed supportive, I fear the final number will be less than the mark the Governor has set."
The proposed $100 million venture capital program would be run by the Wisconsin Economic Development Corp. and would invest in other venture funds to provide capital to early-stage Wisconsin startups, according to Evers' budget proposal. Venture funds receiving investment from the program would have to commit to investing that amount in Wisconsin and secure at least a one-to-one match from private sources.
Supporters of the new fund of funds, which are represented by the Wisconsin Technology Council's Wisconsin Fund Coalition led by Cory Nettles and Mark Bugher, say it would bolster local startups with both public and private capital, and that large-scale fund of funds are a proven tool used by neighboring states, including Michigan, Indiana, Illinois and Minnesota.
However, Wisconsin Assembly Speaker Robin Vos (R-Rochester), expressed hesitancy about the fund.
"I supported legislation in previous sessions that invested state dollars to increase venture capital available to Wisconsin companies," Vos said in an emailed statement. "But, before more public funding is put in, I'd like to see some concrete results from our past investment."
That previous legislation created the $25 million Badger Fund of Funds in 2013 under former Gov. Scott Walker. Every state dollar invested in the Badger Fund of Funds has been matched 3.3 times by private investments in Wisconsin-based companies, according to the most recent quarterly report from the Badger Fund of Funds.
"This model has worked before, and you couldn’t find a better time to be investing in Wisconsin-grown businesses and ideas," Rep. Greta Neubauer (D-Racine) said in an emailed statement Thursday. "I know this is one area where Republicans and Democrats share common ground, and the support from so many former WEDC secretaries highlights this provision’s importance as we work to bounce back from Covid-19."
