Wisconsin venture capital investments take a dive

Deal flow also fell overall in Q1

Money

Venture capital investments took a sharp dive statewide in the first quarter, according to the most recent Wisconsin Deal Flow Snapshot released this week by the Wisconsin Economic Development Corp.

That’s coming off a strong venture capital deal flow for all of 2015, according to the WEDC.

Wisconsin companies brought in $31 million of total investments in 20 deals in the first quarter, down significantly from $76 million invested in 40 deals in the first quarter of 2015.

Only $13.5 million of venture capital was invested in just four deals in the most recent quarter, down from $55.1 million in 17 deals in the first quarter of 2015.

Fourteen of the first quarter 2016 deals were completed through angel or seed funding, totaling $15.3 million, compared with 14 deals totaling $15 million in the same period last year.

In the most recent quarter, one grant accounted for $2.2 million, down from three grants totaling $5.9 million in the first quarter of 2015. And one accelerator investment accounted for $40,000 in the first quarter, down from six accelerator investments totaling $120,000 in the same period a year ago.

The median transaction size was $1.08 million, up slightly from the first quarter of 2015. The WEDC also points out that the funds invested increased 67 percent from 2014, when investments totaled $22.2 million, to 2015.

“It’s possible that was an abnormally large increase, and that conditions for 2016 are returning to a more normal growth pattern of 15 to 25 percent,” the report says.

Nationally, there was $12.1 billion of venture capital invested in 969 deals in the first quarter, according to an April MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association using data from Thomson Reuters.

Venture dollars and the number of deals were down 11 percent nationally when compared with the first quarter of 2015, according to MoneyTree.

“Of the decline that we did experience, most of that can be attributed to nontraditional investors scaling back their investment activity and refocusing on their core businesses,” said Bobby Franklin, president and chief executive officer of the NVCA, in a release about that report. “After a string of strong quarters for fundraising, venture investors will continue to be busy putting risk capital to work by finding and funding innovative ideas and growing them into the next generation of great American companies.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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