While Wisconsin attracted a fraction of the $29.4 billion in total U.S. venture capital invested in 2007, the state’s share is growing.
Last year, venture capitalists invested $87.6 million in Wisconsin companies, according to a MoneyTree report issued by PriceWaterhouseCoopers and the National Venture Capital Association. In 2006, VCs invested $72 million, the report states.
Potential economic slowdowns have forecasters predicting cloudy skies for many industries. However, early-stage investment might be OK this year, said Joe Kremer, director of the Wisconsin Angel Network, a division of the Wisconsin Technology Council, based in Madison.
"I’m hearing that deals are still happening," Kremer said. "Entrepreneurs are still starting companies. I have not heard any investor saying they’re pulling back because of what is happening. It’s all about perception. At this point, I’m not hearing (investors say) that the downturn will affect them."
For some sectors that attract high interest from venture capitalists, an economic downturn might not have much affect, Kremer said.
"When you’re investing in a startup that’s into a new drug discovery, it doesn’t matter what the economy is doing," he said.
The state’s VC climate also will be bolstered by Gov. Jim Doyle’s recent proposals to expand tax credit to qualified startup businesses and the Wisconsin Angel Network’s efforts to bring investors to Wisconsin from large cities in the Midwest, Kremer said.
"The nice thing with the Angel Network is that we’re trying to tie in more investors from Chicago and Minneapolis to try to expand the early stage capital that’s available," he said. "I think that’s starting to play out. Our connection to Chicago is a great solution to connecting investors in the entire IQ corridor. We have new entrepreneurs that are showing up and making pitches. And the investors are starting to get to know each other, and they’re starting to share deals."
