Zach Brandon, president of the Greater Madison Chamber of Commerce, sees Wisconsin's historic entrepreneurial spirit lagging in recent decades. Despite a legacy with businesses such as Harley Davidson, Briggs & Stratton, and Kohler, Wisconsin has fallen behind other states in job growth and new business start-ups, he says.
"As a state we're under-performing our peers and our potential," says Brandon, who moved to Madison as an entrepreneur, working on three start-ups including Laundry 101, and serving as the director of the Wisconsin Angel Network, which helps pair startups with capital.
That's why Brandon -- also a former deputy secretary of the Wisconsin Department of Commerce under Gov. Jim Doyle -- and business leaders around Wisconsin are happy to see that state lawmakers have introduced a new venture capital bill (AB 181), which taps $25 million set aside in Walker's 2013-15 budget. Madison may well benefit from the bill that also calls for $50 million in private investments.
The bill's sponsors include Rep. Mike Kuglitsch (R-New Berlin) and Sen. Alberta Darling (R-River Hills) along with Democrats Rep. Robb Kahl (D-Monona) and Sen. Tim Cullen (D-Janesville). The bill calls on the Wisconsin Economic Development Corporation (WEDC) and the State of Wisconsin Investment Board (SWIB) to create a committee and select a manager to oversee the pot of $75 million to be distributed among Wisconsin start-ups.
In light of the recent audit of the WEDC, which found the agency failed to track money it awarded and follow other statutory requirements, Kahl says that accountability will be an important part of the legislation.
"What we just learned from WEDC is not acceptable," says Kahl, noting that under the venture capital bill oversight would be provided by the Joint Finance committee and awards could be tracked on a public website. "You don't just write a check without follow-up," he says.
Kahl and Brandon agree the bill could use more funding and a larger scope, but both laud the bill as a welcome first step, injecting capital into worthy endeavors and doing what other states did years ago.
Assembly Minority Leader Peter Barca (D-Kenosha) and Sen. Julie Lassa (D-Stevens Point), however, have said they intend to draft their own bill because the one that has been introduced is too short-sighted. Barca and Lassa were members of the Venture Capital Commission, the governor's task force on venture capital.
"One of the things members of the Venture Capital Commission agreed on was that we wanted to fix the long-term problem of Wisconsin's shortage of investment capital," Lassa said in a statement. "While I appreciate that some elements of the Commission's work are reflected in this proposal, I believe this bill is too small to have the long-term effect Wisconsin needs."
Brandon says the bill makes an important statement, demonstrating that the legislature understands what it takes to make and grow a business.
While entrepreneurs supply the ideas, "what we need is the fuel to ignite it, and that's money. Access to capital is an issue for every business."
Focusing on start-ups, he says, will add new net jobs to the economy. And when the government provides investment capital, it not only stimulates the economy, but often sparks a return or possible increase on the initial investment.
The bill identifies five target industries for funding: technology, engineering, agriculture, medical devices and advanced manufacturing. Pointing to Epic Systems as a leader in the tech industry, Brandon notes that Madison is a statewide -- and in some cases national -- hub for these industries.
"Madison is well poised to benefit in every sector in the bill," says Brandon. "It's a bill that will help Madison directly and quickly."
Kahl and Brandon say that the University of Wisconsin's flagship school and other factors make Madison a magnet for innovation.
"As Madison becomes more recognized as a place where start-ups can take root," says Brandon, "we have to make sure the money is there to commercialize those ideas."