There were times in recent years at which the Wisconsin Assembly couldn’t muster 91 votes to pass a resolution confirming the sun rises in the east.
Lingering bitterness over the 2011 public-employee bargaining bill, and the related recall elections that followed, widened divides that often separate Democrats and Republicans in the Legislature. Lawmakers are people, too, so there was no shortage of bruised feelings in the Capitol.
The 91-2 Assembly vote in support of a bill to create a state-leveraged venture capital program may represent the beginning of a less rancorous era (or, at least, a brief respite). Democrats and Republicans will continue to disagree on many issues – school vouchers and tax cuts being current examples – but it may now be OK to occasionally agree without penalty.
Thursday’s overwhelming vote for Assembly Bill 181 sets the stage for a $25-million state investment in a “fund-of-funds,” which would attract a 2-to-1 private match to invest in some of Wisconsin’s most promising early stage companies. The state would be a limited partner in the fund, which is modeled after similar programs in other states, meaning it would share in the profits down the road as those companies mature.
The bill would put $25 million into a fund that invests in several high-growth sectors, including agriculture, information technology, engineered products, advanced manufacturing, and medical devices and imaging. Private investors would bring at least $50 million more to the fund.
The state investment would also produce another dividend – more companies and more jobs, which Democrats and Republicans alike want to encourage over time.
That was evident during the recent floor debate, during which lawmakers disagreed over some aspects of the bill but concurred on the need for Wisconsin to support its startup economy. A recent Federal Reserve forecast ranking Wisconsin 49th among the states in economic growth only added to the sense of urgency.
Rep. Fred Clark (D-Sauk City), one of the bill’s co-authors, said the vote sends a signal the state is serious about investing in entrepreneurs. Clark said he attended the June 4-5 Wisconsin Entrepreneurs’ Conference in Middleton, which reinforced the need for the program.
“We can start out with something small and get it right,” Clark said.
Other legislators said the bill offered a chance for additional bipartisanship.
“This is one of those bills that has been kicked around, and it’s very fortunate for the state of Wisconsin that we are now realizing the value of bipartisan legislation” said Rep. Gary Hebl (D-Sun Prairie).
State Rep. Gary Tauchen (R-Bonduel) said the program is the next step for the state, which has seen growth in angel investments since the passage of Act 255, a tax credit program for early stage investors who invest in targeted companies. That program took effect in 2005.
“I think this is a tremendous opportunity for the state of Wisconsin and we should take advantage of it and move our state forward,” Tauchen said.
“What investors need are more upstream investors where they can pick up where they leave off – major investors who can handle the larger investors needed to help emerging companies go forward,” added state Rep. Gordon Hintz (D-Oshkosh).
State Rep. Mike Kuglitsch (R-New Berlin) was the bill’s GOP co-author. “On Thursday, we sent a message across the state that we are rejuvenating the entrepreneurial climate of Wisconsin,” Kuglitsch said. “It’s a bipartisan solution that will help put Wisconsin to work.”
The bill now moves to the Senate, where key Democrats and Republicans have backed the concept in the past. Let’s hope that body will now send the same bipartisan message as the Assembly.
Tom Still is president of the Wisconsin Technology Council.