Tom Still: Early stage capital scene in Wisconsin benefiting from more players (2024)

There was a time not long ago when early stage investors in Wisconsin could meet in a studio apartment kitchen or a telephone booth (back when there were still telephone booths).

Today, such a gathering of angel and venture capitalists requires much more elbow room — especially when the meeting includes out-of-state investors who like what they’re seeing in Wisconsin.

That conclusion could safely be drawn from the Nov. 13-14 Wisconsin Early Stage Symposium in Madison, where nearly 60 investors from 35 angel networks, angel funds, venture funds and corporate or family funds were among the 450 people who attended. Hailing from California, New York, Minnesota and Illinois as well as Wisconsin, these investors were drawn to see young tech-based companies pitch on-stage or in one-on-one meetings.

With more than 50 such companies taking part in three conference tracks, those investors weren’t left unfulfilled.

Early stage investing has yet to bounce back from 2021 dollar highs nationally and in Wisconsin, but the turnout represented a possible turning of the tide. It also reflected the fact young companies in the tech space are offering business plans that better identify problems and offer solutions in ways that can disrupt the market.

Mentoring of those young companies has also improved statewide — and college campuses are doing a better job of offering pathways for students and faculty alike. Also, Wisconsin investors are getting better at syndicating potential “deals” to spread the risk and the opportunity.

This year’s Early Stage Symposium — the 20th annual under that name — featured a chance for many young companies to compete for a spot in the “Startup World Cup,” a global competition organized through Pegasus Tech Ventures, a California fund. The Madison conference will be one of about 100 regional qualifying events to be held around the world. Selected to advance by independent judges was Phoenix-Aid, an Oshkosh life sciences company that will compete next fall for a $1 million prize.

Through a process called “Investor Intros,” investors from most of the 35 funds held 275 individual “speed dates” with many of the young companies present.

In addition to working with investors outside the state, homegrown investors are paying attention to innovation they can find close to home. Some of that attention comes from institutional investors who have become more active in recent years.

An example is WARF Ventures, part of the Wisconsin Alumni Research Foundation. Founded in 1925 by a group of professors in the Madison campus to patent and license their inventions, WARF has expanded its original mission to invest in some of its most promising companies and products.

In fact, as WARF’s chief executive officer told conference attendees in a keynote address, its venture arm has invested about $50 million in the last six years alone matched by another $800 million in outside investment. The WARF board recently approved another $50 million in early stage investment with the possibility of $50 million more depending on how well the latest round goes. About two-thirds of WARF’s venture portfolio is made up of life science companies.

“Our board is doubling down on our venture investment activities,” Iverson said. “Our future is really bright, and our board is seeing that and we’re executing as best we can with world-class professionals at work to carry out impactful investing.”

Other recent initiatives also aim to build on Wisconsin’s supply of early stage companies. Announced in late spring by the state’s quasi-public economic development corporation, the Wisconsin Innovation Fund will match federal dollars granted through the State Small Business Credit Initiative with money from five private funds with diverse tech-sector interests.

Wisconsin is definitely not Silicon Valley — and doesn’t aspire to be — but there is growing awareness among investors of the potential for attractive deals in the Badger State. It didn’t happen overnight, but word is spreading.