After a competitive process that had entailed requests for far more capital, Wisconsin has selected several venture capital firms to administer a new $100 million public-private fund that will invest in local startups.
The Wisconsin Investment Fund was established last year with $50 million in public dollars the state received from the State Small Business Credit Initiative (SSBCI) under the American Rescue Plan Act. Each venture capital firm must match the state's investment at least one-to-one with private dollars, bringing the total fund amount to $100 million.
These are the recipients, according to a Wednesday announcement from Wisconsin Gov. Tony Evers:
- Madison-based HealthX Ventures is receiving $15 million
- Venture Investors Health Fund in Madison and Milwaukee is receiving $12 million
- Serra Ventures in Champaign, Illinois, is receiving $7 million
- NVNG Investment Advisors in Madison and Milwaukee is getting $6 million
- Idea Fund of La Crosse is getting $6 million
The Wisconsin Economic Development Corp. (WEDC), which is overseeing the fund, is negotiating with a sixth capital management firm that would receive $5 million, according to the announcement.
As part of a highly competitive process, a total of 31 fund managers applied for around $500 million in capital for the Wisconsin Investment Fund.
The fund will invest in Wisconsin companies in sectors including technology, health care, agriculture and manufacturing. A portion of the money will go toward diverse businesses and companies located in underserved areas of investment, according to the announcement.
More than half of the state's initial investment — $27 million — will be allocated to companies in the biohealth sector.
Last year, Wisconsin was designated as a U.S. regional biohealth hub, making it eligible for up to $75 million in federal funding from the U.S. CHIPS and Science Act. A decision about whether it will actually receive that funding is expected this summer.
The state's returns from the Wisconsin Investment Fund will be reinvested in the fund. The WEDC said it anticipates at least $500 million in total economic impact from the companies selected by the fund.
"As the businesses that receive these investments start to grow, the value of the fund will grow with them, creating new opportunities to help even more businesses expand,” Evers said in a Wednesday statement. “Over time, we expect the value of this fund to grow exponentially — with a 10-to-one private-public investment ratio."
Evers called the Wisconsin Investment Fund "the biggest public-private investment in Wisconsin startups and entrepreneurs in our state’s history."
About a decade ago under former Wisconsin Gov. Scott Walker, the state approved $25 million in spending for another public-private venture capital program known as the Badger Fund of Funds. That program launched five new venture capital funds in the state, including the Idea Fund of La Crosse and Gateway Capital Partners in Milwaukee.
The state budget approved last year expanded the Badger Fund by another $25 million.
