A Potential Funding Source for Startups

Although Wisconsin has seen an increase in venture capital over the past 10 years, we are still lacking compared to our neighbors. For instance, Wisconsin-based companies raised $273.1 million in 2020, which is only a fraction of the $2.8 billion raised in Illinois and the $1.8 billion raised in Minnesota, and just half of the $558 million raised in Michigan last year.

The relatively low amount raised by Wisconsin companies was not because of a lack of effort, or even a lack of startups. Instead, it’s a lack of available funding.

Startups in Small Communities

Blue Mounds, Wis.

As it has in other industries, the COVID-19 pandemic has changed the venture capital world. One positive change is that it has given VCs more opportunities to learn about innovations taking place in smaller communities.

Quality of Life in Wisconsin

While startups continue to overcrowd Silicon Valley and other trending cities on the coasts, the Midwest remains an untapped potential. Specifically, Wisconsin is ripe for entrepreneurs with a diversified economy and cities like Madison and Milwaukee attracting new talent. In 2020, Madison was named No. 1 of the 11 best untapped cities for startups by Fundera, and Milwaukee was named No. 1 as the best place for food entrepreneurs by LendingTree.

Untapping the Potential in Wisconsin’s Startup Ecosystem

Photo courtesy of University of Wisconsin-Madison

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.

Investing Locally in Wisconsin

It was not too long ago that a startup in Wisconsin had to go to the coasts to raise money. Over time, our state has seen growth in the venture capital industry, and many of the funds are striving to develop our startup ecosystem by investing in companies founded and headquartered in Wisconsin.

The Enduring Presence of Women in Wisconsin’s Venture Industry

Graphic courtesy of NVNG Investment Advisors

Much is currently being written about the lack of women in the venture capital industry, and the statistics paint a clear picture. A study by Axios showed that only nine percent of decision-makers at U.S. venture capital firms are women (an increase from seven percent in 2017).

While Wisconsin is still growing its VC industry, notable women have played important roles. Let’s take a look at a few.  

A Look at Wisconsin’s Health Tech Industry

The state is seeing a significant shift in venture capitalists investing or specializing in health tech companies. For example, Venture Investors’ latest $75 million fund will focus exclusively on healthcare deals. Other VCs and funds are focusing on the health tech sector, including Golden Angels Investors, 30 Ventures, HealthX Ventures and Winnebago Seed Fund.