Although Milwaukee fell one spot this year to rank 13th in the Midwest+startups report that measures the strength of venture capital ecosystems in the Midwest, proponents of the report say a dropped ranking does not rule out the overall improvement of a city’s startup environment.
The annual report attempts to understand how micro-environments among 59 Midwest cities are performing relative to one another. Each city is compared in terms of startup activity, access to resources and business climate. The rankings measure “a core based statistical area’s relative rank as an ecosystem for a start up to launch, grow and scale,” according to the report.
“A city can still absolutely improve while its rank stays constant or falls,” the report states. “In fact, due to the strong macroeconomic tech/VC market and the rising tide throughout the Midwest region, it is very likely that the vast majority of these ecosystems grew since last year.”
While Milwaukee remains on the fringe of top 10 cities in the Midwest, Madison is ranked #8 with Green Bay ranked #36. Beloit and Eau Claire were the only other Wisconsin cities on the list and ranked #38 and #40 respectively.
Data found in the report suggests Milwaukee’s venture capital ecosystem still has a lot of upside. In “startup momentum,” a category that measures the percent change in the number of startups from 2015 to 2020, Milwaukee ranked #10, according to the report.
In the same category, Madison ranked #21 while Green Bay ranked #5. Peer cities like Cincinnati and Cleveland, which ranked #9 and #11 overall, were placed at #7 and #20 respectively for startup momentum. Also considered to be a peer city is Indianapolis, which ranked #4 overall and #4 for startup momentum.
The Milwaukee VC ecosystem also finds strength in its angel network, available accelerators and incubators, government programs, small business loan access, growth domestic product per capita and number of large companies, all categories of which Milwaukee ranked in the top 10.
In fact, Milwaukee ranks #1 for employee loyalty, a measure of the average tenure of developers in the city’s metropolitan statistical area including Washington, Ozaukee and Waukesha counties.
However, Milwaukee still lags in a few key categories including startup density (#33) and average number of venture capital deals (#32). The city has a middle of the pack placement at #27 for percentage of startups that exited, according to the report.
Molly Dill, director of gener8tor’s gBeta program, noted Milwaukee’s relative growth this year, but said when compared to peer cities like Minneapolis (#2) and Detroit (#9), it is harder to be excited.
“It would be beneficial for Milwaukee to look to the Midwest leaders on this list for guidance on how to improve in the rankings,” Dill said.
Although Milwaukee scored pretty well in terms of access to resources, Dill sees a lot of untapped opportunity, particularly with universities and large companies in the area, she said.
“Universities (in Milwaukee) are not spinning out as many startups as those in other cities, and I have a feeling there is lots of unharnessed, innovative research in Milwaukee labs,” Dill said. “…One other factor that stuck out to me is Milwaukee has a score of 22.5 for its number of Fortune 500/1000 companies (Milwaukee ranks 6th in that category), so it ranks pretty high compared to peers, but doesn’t seem like we have fully leveraged those resources to help startups.”
For Milwaukee to crack into the top 10 of startup rankings for Midwest cities, the city would need more venture-backed startups, said Matt Cordio, president of Skills Pipeline and Startup Milwaukee.
“The report indicates that Milwaukee lags behind other Midwest cities in terms of quantity of startups and density of startup activity,” Cordio said. “The business community must be laser focused on venture funds and accelerator programs that seed new venture-backed companies and policies that incentivize more private investment into promising companies in the region.”
