Investors Reboot Wisconsin Venture Capital Association

The Wisconsin Venture Capital Association, a nonprofit trade group that was formed in 2002 but has been dormant since 2008, is springing back to life, according to key figures in the state’s venture industry.

The revival, first reported by the Milwaukee Journal Sentinel, was confirmed Wednesday by two Madison-based investors.

Scott Button, managing director at Madison, WI-based Venture Investors, says that discussions about reconstituting the WVCA first took place about two years ago, and it has since gotten 20-plus membership commitments. Some of them came from other VC funds, groups of individual “angel” investors, and corporate venture arms, he says.

The group will convene for the first time in years on March 31 in Madison, Button says.

Venture Investors was part of the WVCA during the years it was active, and has played a key role in the effort to revitalize the consortium.

About a decade ago, the number of funds and individuals in Wisconsin that were putting capital into startups was on the decline, Button says. As a result, the WVCA was meeting less often than it had in the past. Another factor was that some board members retired.

Part of what led to the decision to reboot the WVCA is that Venture Investors has an office in Ann Arbor, MI, and one member of its team there, Jim Adox, is on the board of the Michigan Venture Capital Association.

Adox, who also is a past chairman of the MVCA, says it serves as “the voice of the investment community in Michigan.”

“Some of our goals are to increase the availability of capital and provide high-quality networking [opportunities] with entrepreneurs, venture capitalists, and research institutions,” Adox says.

He adds that another part of the MVCA’s mission is advocating for pro-investment legislation and making Michigan a more friendly place to do business for early-stage companies and venture capital investors.

According to a document that outlines the purpose and functions of the WVCA, the group “will serve as a united voice to policymakers on behalf of the accelerators, angels, venture capitalists, and institutional investors in Wisconsin’s entrepreneurial ecosystem … and mobilize legislative outreach from across the state.”

Some members of Wisconsin’s early-stage business community have pointed to tax incentives, employee noncompete agreements, and higher education funding as areas where policy changes could improve the Badger State’s last-place finish in the Kauffman Foundation’s closely watched ranking for startup activity.

Wisconsin-based companies raised just over $223 million in 2016, according to data from the National Venture Capital Association and PitchBook, a Seattle-based firm that monitors investment trends. That marked a decrease of about 2 percent from the previous year, and represents only a sliver of the $69.1 billion startups raised nationally.

Some new VC funds have formed in Wisconsin over the past few years, such as 4490 Ventures and HealthX Ventures. Both of those funds are based in Madison.

Moreover, large companies with a core focus on insurance and financial services have recently shared details on their corporate VC arms. In the past six months, Northwestern Mutual and CUNA Mutual—based in Milwaukee and Madison, respectively—each said they planned to continue investing in early-stage companies over the next several years.

Button says 82 percent of the venture capital dollars currently under management are in three states: California, Massachusetts, and New York. Establishing, or re-establishing, structures aimed at fostering more interactions between investors who live in the same city or region might help “break that pattern,” he says.

“This is a relationship business,” Button says. “Part of goal here was really to make sure that all the players in this state know each other, and what kinds of deals we’re interested in.”

Wisconsin Venture Capital Association flier by Jeff Buchanan on Scribd

Jeff Buchanan is the editor of Xconomy Wisconsin. Email: jbuchanan@xconomy.com Follow @_jeffbuchanan

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