Universities are one of the largest sources of untapped entrepreneurial potential in Wisconsin. The UW System alone has approximately 165,000 students with youthful energy, healthy curiosities and a capacity for taking risks – three characteristics often used to describe budding entrepreneurs. Furthermore, the University of Wisconsin-Madison has made the top 10 list of colleges that produce the most Fortune 500 CEOs.
In addition, many university faculty and staff hold advanced degrees or are engaged in significant research at doctoral granting campuses, making them ideal candidates to cultivate innovation among students.
However, these students need experience, connections and resources to be successful, and that’s where venture capitalists come into the picture.
Case Study: EnsoData
EnsoData, a startup founded in 2015 by three UW-Madison graduates, uses cloud-based artificial intelligence (AI) to automate data analysis and diagnose medical conditions. Its flagship product, EnsoSleep, is currently used in more than 400 sleep centers in the United States and analyzes close to 16,000 sleep studies each month.
CEO and Co-Founder Chris Fernandez cites the university ecosystem as a major factor for the company’s success.
“Being a student is a plus,” Fernandez said. “You are there to learn, and experts are generous with their time, knowledge and skills because they are invested in your education.”
Fernandez and his partners continued their education in the startup world through the YC Fellowship and gBETA Madison programs. Still, Fernandez wasn’t hesitant about seeking additional guidance. While they were biomedical students, the team reached out to Venture Investors Managing Director Scott Button, somewhat out of the blue.
Impressed with their vision, Button began providing pre-investment guidance. For example, he and members of his firm helped EnsoData develop its finance strategy, investment pitch and overall investor storyline.
“We worked closely with Chris to identify the amount of money they should raise and the milestones they should achieve with their Series A funding.” Button said. “For this round, EnsoData needed to establish itself as the market leader in sleep and validate the power of its platform to empower clinicians with medical waveform AI.”
Venture Investors ended up co-leading EnsoData’s Series A financing with Zetta Venture Partners, and Button is now a board member for the company. He has since brought in seasoned health tech entrepreneur Justin Mortara to mentor the team as the company’s Executive Chairman, and he made an introduction that led to the hiring of the current SVP of sales.
“First-time CEOs need be thoughtful and self-reflective on their strengths and weaknesses,” Button said. “With Chris, he is brilliant and eager to learn. We worked together to identify gaps and bring talent into the team.”
Fernandez also credits Button and other investors with setting up partnerships, making introductions to customers and being an experiential bridge.
“We could not be where we are today without the guidance and support from our investors, especially Scott,” Fernandez said.
To date, EnsoData has raised $11.1 million in funding over three rounds, with contributions from 10 different investors, including Wisconsin-based HealthX Ventures and Wisconsin Investment Partners.
EnsoData most recently closed a $9 million Series A financing round in June 2020. Funds will be used to launch new AI products in sleep and neurology, grow the company’s team, expand diagnostic access and partnerships and extend support for clinical trials.
