More information on the WI Venture Center policy initiative

2007-08-20T08:24:00.000-07:00

Below please find some talking points on Governor Doyle's Wisconsin Venture Policy initiative that was included in his version of the budget.

Status; The initiative was removed as policy by the chairs of the Joint Committee on Finance and was not added back into the budget by either house.

Wisconsin Venture Center:

Helping Wisconsin Companies Grow With Venture Capital.

Summary: The Governor’s bill originally provided a $2 million grant to start-up the Wisconsin Venture Center, a nonstock nonprofit, that will assist Wisconsin’s emerging industry companies attract venture capital.

REASONS TO SUPPORT THE WISCONSIN VENTURE CENTER

1. The Wisconsin Venture Center builds on the successful angel investing initiatives put in place by the Governor and Legislature, including the Technology Council, Wisconsin Angel Network, Wisconsin’s Entrepreneur’s Network, and Act 255 tax credits for angel and Qualified New Business Ventures.

2. Although Wisconsin has grown its angel investments, Wisconsin still trails its neighbors in attracting venture capital (the next stage in capitalizing growing companies). In 2006, Wisconsin was ranked 33^rd in venture capital with a total of $58 million in venture capital investments. In comparison, Minnesota received $322 million and Illinois received $409 million in venture capital in 2006.

3. The Wisconsin Venture Center seeks to increase the amount of total capital invested into Wisconsin companies to $100 million a year for the next five years by connecting entrepreneurs to venture capital firms from all over the country, particularly in the Midwest and the coasts.

4. Wisconsin’s technology companies need increased venture capital to succeed and grow. 92% of all biotech revenues in 2005 were from venture-backed biotech companies. Venture capital fueled the growth of Apple, Cisco, Google, eBay, FedEx, Home Depot, Intel, and Starbucks. Wisconsin has great start-up companies that with venture capital could be the next Apple or Intel. TomoTherapy’s recent IPO is a great example of angel & venture investing.

5. Venture capital means more jobs, higher revenue, more quickly. Businesses that receive venture capital investments add more jobs more quickly and have higher revenues than businesses that do not receive venture capital investments.^{^[1]}

6. The Wisconsin Venture Center is based on a proven successful model. In 2001, Ohio provided $4m as start up funds for a collaborative effort, the BioEnterprise Initiative, to assist health care companies in attracting venture capital. Since July 2002, the BioEnterprise Initiative has helped over 50 companies attract more than $500 million in new funding. Between 2001-03, Ohio led the nation in the relative growth of total venture capital invested in biotech. The Wisconsin Venture Center can do the same or better for Wisconsin’s companies.

7. The Wisconsin Venture Center will be state-wide non-competitive private-public collaboration between the State, ITAW, the Wisconsin Medical Device & BioTechnology Association, WARF, UW, Wisconsin Technology Council, and private industry.

8. The Wisconsin Venture Center will also connect Wisconsin’s entrepreneurs to management and mentors skilled in capitalizing businesses.

9. Over 85% of the Venture Center funding comes from out-of-state securities agents who are licensed to sell securities in Wisconsin; brokers will directly benefit from increased venture capital which can result in IPOs; brokerage firms in our state support the creation of the Wisconsin Venture Center.

Recommendation for CWI as a whole is to combat the “brain drain” theory

2007-08-14T12:37:00.000-07:00

The Committee yesterday recommended that we address the "brain drain" issue as an organization and how it has been proven through research to not be actually taking place. I am still tracking down the work done by UW-Milwaukee professor Sammis White on the topic, it is not on the WPRI site.

However, in the research that UW-Madison professor Karl Scholz and doctoral student Yeri Lopez conducted for CWI, they found that the net migration of college graduates from Wisconsin was about 7,000 between 1995-2000, significantly less than the 18,000 that left between 1985-1990.

They concluded that this “not an alarmingly high number, but a cause for some concern.”
Here is a link to the research they conducted; http://www.lafollette.wisc.edu/publications/workingpapers/scholz2007-007.pdf

CWI Health Committee

More information on the WI Venture Center policy initiative

Recommendation for CWI as a whole is to combat the “brain drain” theory