Wisconsin Economic Development Corp.’s newly launched public-private venture capital program, known as the Wisconsin Investment Fund, has enlisted a handful of venture capital firms to infuse an initial $100 million into Wisconsin’s startup ecosystem, with a focus on the biohealth sector. Among the selected fund managers is Venture Investors Health Fund, which received $12 million of the state’s $50 million pool to match and then invest in new startups and entrepreneurs across the state. Based in Madison and Milwaukee, Venture Investors primarily targets early-stage health care startups and innovations, particularly those developed in Midwest universities, including UW-Madison and the Medical College of Wisconsin. BizTimes associate editor Maredithe Meyer recently caught up with the firm’s chief financial officer David Arnstein and associate Jenni Le to talk about the significance of this new public-private investment effort and the future of health care innovation in Wisconsin.
Why go after this opportunity?
Arnstein: “For Venture Investors, we looked at this capital as we’ve been investing in Wisconsin for 40 years, so this program for us was the perfect fit. It’s what we do, it’s what we’re focused on and what we’re good at. …
“For us, there’s no shortage of talent in Wisconsin, and we’ve always felt that way. And we think being here is an opportunity to see proprietary deal flow, but there always has been a shortage of capital. So, this capital into the market really allows us to make larger investments and fund them to the important milestones to create value.”
Fueling momentum
Le: “I think the state recognizes that we’re at this really special moment, an inflection point in health care. When you combine that with Wisconsin being designated last year by the Economic Development Administration as a regional biohealth hub – and we could potentially get tens of millions of dollars flowing into the state … that’s just going to add fuel to the special fire starting to grow in the state. If you combine that with investment opportunity from us, we can provide capital to these early-stage companies and it kind of just feeds off of one another.
“The hope – not just for Wisconsin but for Venture Investors – is that these companies are going to create a lot of jobs and a lot of wealth in the area, and then we’re going to be able to ultimately return money to our investors. You’re also building the talent pipeline and that could lead into creating even more startups.”
Timing is right
Arnstein: “We believe that right now is a great time to be investing in health care. If you look at AI technology, computing power, precision, look at the demand for innovation in health care, the aging population. So all these things, the time is right. And we’re going to see exponential growth in medical technology in the next 10 to 15 years. Every time you look at a cycle – you look back and say, ‘I can’t believe what occurred looking back 20 years’ – well, look out 15 years from now, we expect a hugely different landscape in health care.”
