07 May Milwaukee Journal Sentinel: Evers’ proposal for $100 million venture capital fund gets bipartisan support from former secretaries
When lawmakers on the Republican-controlled Joint Finance Committee began the process of retooling Gov. Tony Evers’ budget, one item that survived was a $100 million venture capital “fund of funds.”
The proposal by Evers, a Democrat, has the support of eight former secretaries of the Wisconsin Economic Development Corp. and the former state Department of Commerce. The group includes five appointed by Republican governors and three by Democratic governors.
The venture capital fund “would allow Wisconsin entrepreneurs to secure needed next-step financing from in-state sources so they don’t have to look to, or move to, the coasts for capital,” WEDC Secretary and CEO Missy Hughes said in a statement.
The former secretaries supporting the creation of the fund include:
- Reed Hall, former Wisconsin Economic Development Corporation secretary
- Mark Hogan, former Wisconsin Economic Development Corporation secretary
- Paul Jadin, former Wisconsin Economic Development Corporation secretary
- Dick Leinenkugel, former Wisconsin Department of Commerce secretary
- Brenda (Blanchard) Luckritz, former Wisconsin Department of Commerce secretary
- Bill McCoshen, former Wisconsin Department of Commerce secretary
- Cory Nettles, former Wisconsin Department of Commerce secretary
- Aaron Olver, former Wisconsin Department of Commerce secretary
“It’s clearly a good program that’s going to have benefits for our economy,” state Rep. Tip McGuire, D-Kenosha, said. “It should remain in the state budget. That said, I am optimistic if it isn’t in the final budget that we can find a way to pass it, even if it’s stand-alone legislation.”
“Other states have done this, including some that are very close to us — Michigan, Ohio, Indiana, Illinois,” Still said, adding each has done their fund of funds differently.
“They’ve been able to attract outside capital into their states.”
The state does have a similar concept with the Badger Fund of Funds, or Badger Fund, which has about $61 million and, as of December 2020, has distributed nearly $20 million to five different funds to invest in area companies. Of that $20 million, roughly $7.5 million of the Badger Fund has been paired with $24.5 million in private funding to support 24 businesses.
When asked about the fund of funds in Evers’ budget proposal, Assembly Speaker Robin Vos, R-Rochester, said in a statement he “supported legislation in previous sessions that invested state dollars to increase venture capital available to Wisconsin companies. But, before more public funding is put in, I’d like to see some concrete results from the past investment.”
According to Evers’ original proposal for the fund of funds, the state would allocate $100 million in a one-time payment to an advisory committee that would then select a fund manager who would choose several different private funds to distribute the money to businesses.
“The state would prefer not to pick winners and losers,” Still said. “They would like the market to pick those winners and losers because the market is really best suited for it … beyond that this would be trusting those private funds to do what is best for the return on investment over time. And that’s exactly how it works elsewhere.”
McGuire said the goal of the fund is to bring in outside investment to the state to support local businesses.
“In the current moment that we’re having, it would speed up our economic recovery,” McGuire said. “We know that venture-backed companies and high-tech companies and businesses like that have very good compensation, well above the median Wisconsin value.”