Last updated on February 27th, 2023 at 01:58 pm
Wisconsin is getting $80 million in American Rescue Plan Act funding which has been earmarked to help support entrepreneurs and small business.
Gov. Tony Evers and Sen. Tammy Baldwin, along with the Wisconsin Economic Development Corp. and Wisconsin Housing and Economic Development Authority, announced plans for the funding this week. The money has been approved through the State Small Business Credit Initiative, a part of ARPA
Evers’ plan for the funding, which has been approved by the U.S. Treasury Department, includes $50 million for WEDC to create the Wisconsin Investment Fund. The goal of the fund is to partner with other venture capital funds in the state that are investing in Wisconsin-based startups.
The Wisconsin Investment Fund will work with VC fund managers. Leaning on the expertise of these managers, the Wisconsin Investment Fund will select companies for investment and then match these companies’ own private investments on at least a one-to-one basis.
“Wisconsin has a strong track record of innovation and of realizing the economic potential of next-generation startup companies. While recent years have seen significant growth in venture capital investments, Wisconsin, like most states, is behind national leaders in both volume and amount of venture capital investments,” reads a request for qualifications for the fund. “The Wisconsin Investment Fund aims to close this structural gap by partnering with venture capital investors with a significant emphasis on investing in Wisconsin companies.”
Minimum and maximum investment sizes — and the amount of SSBCI funds in each eligible transaction — will be established with each fund manager based on overall investment strategy, the terms and conditions of the fund’s private funding, and other guidelines set by WEDC and SSBCI. WEDC will establish parameters with each fund manager to ensure that SSBCI funds are invested across a range of investments and not allocated to a single transaction.
WEDC will not commit more than $15 million to any single fund manager and will select five or more fund managers.
“More than 99% of Wisconsin businesses are small businesses that employ nearly half of Wisconsin workers, and we know they’re more likely to hire locally, buy supplies locally, and reinvest locally back into our communities,” said Evers in a statement. “One of our focuses in recovering from the pandemic has been ensuring our small businesses receive the resources needed to thrive. We’ve helped fuel our economic recovery by harnessing the ingenuity and homegrown talent we already have right here in Wisconsin.”
Evers will also allot $8 million of the $80 million to expand WEDC’s Technology Development Loan program. The program supports new businesses with flexible financing terms as they scale. He will also use $6 million to bolster WEDC’s Capital Catalyst program, which provides matching funds to nonprofits running small business loan programs.
Finally, the remaining $15 million will go to WHEDA to provide credit support to small businesses that receive microloans from Community Development Financial Institutions.