Last year, Wisconsin placed dead last in the Ewing Marion Kauffman Foundation ranking for startup activity. The Milwaukee metro area and the state’s entrepreneurial business growth rankings also fell significantly in the foundation’s latest report.
Those rankings are a huge concern for the state, since most job creation and job growth comes from new businesses. If we want to improve the state’s economy and create more job opportunities, we must create an environment in the state that leads to robust business creation.
To shine a light on the importance of this issue, BizTimes Media presented Milwaukee-based gener8tor, one of the top accelerator firms in the nation, with its annual Regional Spirit Award. In addition, George and Julie Mosher, the founders of Milwaukee-based National Business Furniture, were honored by BizTimes with a Lifetime Achievement Award. George now mentors and invests in early stage companies in Wisconsin and has invested about $30 million in 240 firms.
The Moshers and gener8tor were recognized at the Bravo! Entrepreneur & I.Q. (Innovation Quotient) Awards, as part of our annual BizExpo event.
The awards program also included a panel discussion, which I moderated, with local young entrepreneurs who own rapidly-growing companies. They included: gener8tor co-founder Joe Kirgues, RentCollegePads.com founder Dominic Anzalone, Scanalytics co-founder Joe Scanlin and Bright Cellars co-founder Richard Yau.
I asked these young entrepreneurs what could be done to improve the startup environment in Wisconsin.
“We think a lot of the ecosystem is designed around investing in things other than people,” Kirgues said. “If you’ve ever seen a university official talk about a building blueprint, their eyes just light up. We want to see that same excitement, but when they are talking about how they invest in their people…We have a gap in our infrastructure around investing in people.”
Funding remains a problem for Milwaukee-area startup firms trying to get to the next level.
“We think Milwaukee and the region generally is strong on angel financing,” Kirgues said. “But we have trouble with the $1 million to $2 million checks. There’s angel money here. (But) there’s a gap at the next stage…and there’s a gap at the $10 million check stage.”
“There is a lot of available angel money in town,” Anzalone said. “If you have a good business and put together a business that can scale, I think it won’t be the most difficult thing to raise capital for. But I would agree once you get past the seed round and go to the series A round for over $1 million, it gets difficult.”
“We’ve got corporations, very big ones, that sit in our backyard that for the same (amount of money) that they write for a corporate outing lunch check, that could transform three, four, five startups and arguably launch them into an area that would allow them to get (more) funding and bring attention back to the region,” Scanlin said.
“Bigger picture, if I had to tell you what we wish we saw more of, I wish we saw more companies growing at a pace that justified that financing,” Kirgues said. “I suspect if there were more of those, we would see more financings.”