Winnow Fund holds final close, raises $10.2 million

Madison-based Winnow Fund held its final close in December, raising $10.2 million two years after the fund was formed. The fund’s final close came weeks after Winnow Fund received an undisclosed investment from Wausau-based Incredible Bank, the latest investor in a series of institutional and academic partnerships established by Winnow Fund in 2020. The fund’s early-stage venture investing strategy is based on sourcing investment opportunities from Wisconsin colleges and universities. The fund was designed to invest between $6 million and $8 million in Wisconsin-based startups to build companies based on product ideas developed by students. The Winnow Fund, which accepts minimum investments of $25,000, raised its fund through 53 investors, according to a U.S. Securities and Exchange Commission filing. In December, the Winnow Fund partnered with both Concordia University and WiSys Technology Foundation, a nonprofit and the official designated technology transfer office for the UW System Comprehensive Campuses. Similar to partnerships with Concordia University and WiSys, Winnow Fund manager Richelle Martin will become a “venture capitalist in residence” for the Wausau-area startup community, which means she will have a local Winnow Fund office. The Incredible Bank partnership establishes a connection with Northern Wisconsin, increasing the geographic reach of both the Winnow Fund and the Badger Fund of Funds, said Badger Fund partner Ken Johnson. “From the Badger Fund’s viewpoint, to have a relationship with a bank up there and with Richelle having regular office hours, I believe we will find investment opportunities up there,” Johnson said. Winnow Fund is one of six Badger Fund of Funds, Wisconsin’s 7-year-old venture capital program managed by Santa Fe, New Mexico-based Sun Mountain Capital and Stoughton-based Kegonsa Capital Partners LLC. Because the Winnow Fund exceeded its fundraising target, Badger Fund of Funds increased its capital commitment to Winnow Fund to $5 million, Martin added. The Winnow Fund will make all initial investments within 5 years of its commencement close, which was held in September 2020. However, the fund can make second and third round investments in its portfolio companies after 5 years. The Winnow Fund drew investments from Incredible Bank, The Capital Times, Johnsonville Ventures, MGE Energy Inc., Concordia University, WiSys Technology Foundation, multiple individual investors and Wisconsin-based private equity firms N29 Capital Partners and Inventure Capital.