Northeast WI Angel Investor Group Launches to Create, Fund Spinoffs

You could call Al Zeise a spin doctor, though not in the traditional sense of the term.

Throughout his career, Zeise has proven adept at corporate spinoffs. Over the past two decades, the entrepreneur has founded or co-founded at least 10 companies in the Green Bay, WI, area. Many of them have come about in the same way: identify a business problem a company is facing, create a startup to work with the existing company and solve the problem, and then commercialize the solution, potentially across the entire industry.

“Of the companies I started or helped start, every one of them fit this model or found a way to turn it into this model,” he says.

Zeise is obviously bullish on the approach, but so are 10 fellow executives based in Northeastern Wisconsin from industries including healthcare, manufacturing, logistics, and banking. Together, they’ve launched ZyQuest Ventures Foundry—“the foundry” for short—which provides a more formal framework for spinning startups out of established companies in the area.

Several foundry members will speak at Launch Wisconsin, a day-long conference for entrepreneurs and investors held at Green Bay’s Lambeau Field Oct. 7.

The new group is distinct from ZyQuest, an IT consulting firm Zeise founded in 1994 and continues to run, and ZyQuest Ventures, an investment fund he co-created early last year.

The foundry is more a collection of angel investors than an actual fund. However, when someone in the group is involved in spinning off a new company, all members will receive a portion of founder shares in the new entity, says Zeise.

“The foundry itself will often be a founder of the spinoff company,” he says. “As individuals, we invest in the startup. But the foundry will always have a piece of ownership of the companies we create.”

Jill Enos, the group’s managing director, says compared to conventional angels, foundry members want to be more hands-on with the startups in which they invest, drawing on their own knowledge and experience to grow ideas into products.

“The individuals involved want to do more than just make a cash investment in a new venture,” Enos says. “The idea is to focus on the business need and partnering with the business to say, ‘We want to develop this hand-in-hand with you and make sure it meets your needs. If it has opportunity to do more beyond just your market space, let’s take it to a larger market.’”

Zeise says another way foundry members may get involved is by appointing one or more people to lead the startup. “For the companies we actually start, we’re going to find a CEO or a champion for it,” he says.

That way, foundry members can concentrate on work at their own companies, which the group expects to be a key source of ideas for spinoffs.

Zeise says he expects most investments will range from $250,000 to $1.5 million, and that foundry members will together make multiple investments per year in startups the group helps found.

The foundry is “pretty close to rounded out” but may later add a new member or two, says Enos.

Enos says a big, entrenched company can be ill-equipped to address specific  … Next Page »

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

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