Investors have committed more than $3.5 million to a new, female-led Wisconsin venture capital fund called the “Winnow Fund,” according to documents filed Wednesday with the federal Securities and Exchange Commission.
The Winnow Fund, managed by managing director Richelle Martin, will invest in pre-revenue startups and build new companies around innovative products created by college students throughout Wisconsin.
The Badger Fund of Funds is the lead investor and contributed 40% of the Winnow Fund, with private investors composing the remainder of the fund. The Winnow Fund will ultimately invest $8 million into creating and investing in new Wisconsin-based startups, according to a press release.
The Winnow Fund is designed to create companies based on product ideas developed by students rather than technologies obtained through the patenting and licensing offices. The fund hopes to take advantage of student interest in entrepreneurship, which is growing and also supported by entrepreneurship clubs and startup programs on campuses across the state, according to a press release.
Martin will visit Wisconsin college campuses to not only find ideas, but also provide students with access to a professionally managed Wisconsin-based venture capital fund – a concept she has dubbed the “Venture Capitalist in Residence” program.
After Martin graduated from UW-Milwaukee and obtained a law degree from UW-Madison, she spent six and half years negotiating research contracts at UW-Madison. In this position, Martin saw first hand the creative ideas that students produced, but also recognized that student entrepreneurs needed help navigating the world of VC.
“So, kind of like an entrepreneur in residence were students have access to someone with that background, I thought of the venture capitalist in residence program,” Martin said. “It’s also putting it in front of students as a potential career opportunity because right now, there is no educational track for venture capitalists.”
Martin’s fund will be the only Wisconsin-based and woman-led venture fund that is actively investing in Wisconsin, said Ken Johnson, Wisconsin-based partner of Sun Mountain Kegonsa, which manages the Badger Fund of Funds.
“In a state where there is a lot of corporate brand building and talk around diversity, there has been a surprising lack of commitment to diversifying our venture capital ecosystem,” Johnson said. “From a national perspective, the number of female venture partners dropped to 6% in 2014, from 14% in 1999; the Winnow Fund provides Wisconsin with an opportunity to be a national VC ecosystem leader.”
As the only female-led venture fund in the state, Martin said the experience is “exciting,” but also “daunting” with challenges she didn’t expect, and that others may not immediately think of, she added.
Martin noticed, for example, that when she’s pitching to potential investors with her support team, the attention is often diverted away from her, she said. Martin said it’s not that she feels the shift of attention is intentional, but rather that some people have a stereotype for what a venture capitalist looks like.
“So, when you’re engaging in these conversations and I’m introducing myself to people, I feel like that’s kind of an initial hurdle we have to get over,” Martin said. “I have to sort of set this baseline of establishing some credibility, talking about my background and getting them comfortable enough to listen to me and to have confidence in what I’m saying.”
Despite the hurdles, Martin considers herself fortunate because Wisconsin’s VC culture in general has been supportive, she said.
“I really do think that it’s very exciting and I do have to say that I’m very lucky,” Martin said. “Because you hear about things that woman in tech and woman in venture face in places like Silicon Valley and I just think that I am so lucky because we don’t have that here.”