Wisconsin Economic Development Corporation COO Ryan Murray encouraged local entrepreneurs to support the early stage capital program being proposed in the state legislature at a meeting of the Wisconsin Innovation Network-Milwaukee last week.
The venture capital bill would fund an investment of about $200 million to be distributed by a state fund manager among private early stage firms over the course of four to six years.
Gov. Scott Walker has asked the WEDC to lead the way in developing an effective state venture capital program that everybody can get behind, Murray said.
Venture capitalists don’t make the best cheerleaders for the legislation, but entrepreneurs provide a concrete example of how the funding would help startups, he said.
“It was really about trying to build a community of advocates around an idea,” Murray said.
Providing early stage capital would be a better return on investment for the state than its current loan program, he said. Only two of every 10 businesses pay back the loans the state is giving out now, with about 2 percent interest.
A public early stage capital investment would also put Wisconsin out ahead of other states, since most haven’t approached the idea yet, Murray said.
The WEDC plans to allot about $20 million of the early stage capital to direct investment by the fund manager. As soon as a fund manager is identified, direct investment could begin using the semi-private state entity’s reserves, he said.
The remaining $180 million would come from the legislature, if the bill is passed. It would be distributed through an indirect fund-of-funds setup.
Read more about the bill in a recent issue of BizTimes Milwaukee here.