Third Fund Under State Program Gets $6M, To Be Based in Southern WI

A program supported in part by the state of Wisconsin that’s aimed at helping startups raise venture capital said it invested $6 million in a new fund based in the southern part of the state.

The new fund is the third launched in the past year under the program, which is known as the Badger Fund of Funds. According to a press release, the new fund is called “Rock River Capital Partners Fund I,” and will be managed by Andy Walker and Christopher Eckstrom.

The two men, who have experience in startups and investing, co-founded Rock River Capital Partners several months ago, but it was not clear until Tuesday’s announcement that the organization was to become one of the “recipient” funds under the fund-of-funds program.

The proposal for the Badger Fund of Funds submitted to the state in 2014 calls for a combination of public and private dollars to flow into both the central Badger Fund and, further downstream, its recipient funds. Both the Badger Fund (which won’t make direct investments in startups) and the recipient funds (which will) must raise outside capital to complement the taxpayer monies they’ve been given to work with, according to the proposal.

Specifically, the proposal calls for the Badger Fund to commit 40 percent of the total amount managed by each recipient fund. That means that in order for Rock River to receive $6 million from the central fund, it must raise $9 million in outside investment.

The state of Wisconsin has committed $25 million to the Badger Fund of Funds. In August, Ken Johnson, who is one of two general partners overseeing the program, said it had raised $10 million from private investors. The central fund has about $15 million left to deploy, according to a report by BizTimes Media.

One of the recipient funds named previously is the Idea Fund of La Crosse, which in February said it had raised more than $8 million from investors.

The other is the Neenah, WI-based Winnebago Seed Fund, which said it also had its “first closing” in February. However, a press release announcing the closing did not say how much the Winnebago Seed Fund had raised beyond the $4 million committed by the Badger Fund in August. Under the terms in the proposal submitted to the state, the recipient fund would need to raise $6 million from outside investors to receive $4 million from the central fund. Johnson declined to comment on the total amount the Winnebago Seed Fund has raised to date.

According to its website, Rock River Capital Partners is based in Madison, WI. (Its offices are in the same building that also houses several venture funds and startups, including Allergy Amulet and EnsoData.) However, it is not clear from Tuesday’s press release whether the new fund will also be based in Madison, or in another city.

Both of Rock River Capital Partners’s co-founders graduated from the University of Wisconsin-Madison, and returned to the Badger State to start the fund, according to the release. Walker previously served as CEO at Chicago-based Channel IQ, which was sold to Market Track last summer for an undisclosed sum. Eckstrom also moved back to Wisconsin from Chicago, where he worked in the investing arm of Macquarie Group, an investment bank headquarterd in Australia.

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

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