Wisconsin explores $100 Million for Venture Capital

Three separate public initiatives are underway in Wisconsin which could result in the availability of more than $100 million for new venture capital financing. The efforts are designed to spur venture capital investment in the state (ranked 45th in the 1998 Pricewaterhouse Coopers survey) and to increase entrepreneurial activity in the Wisconsin biotechnology community.

The fund closest to implementation, is a $50 million pool offered by the Wisconsin Department of Commerce. Scheduled for opening July 1, the program will provide grants to certified Wisconsin-based insurance companies to invest up to $10 million each. The insurance companies would then receive dollar-for-dollar tax credits for the amount of their investments over a 10-year period. The state will certify which emerging businesses are qualified to receive the venture capital. No technologies or industries are specifically targeted by the pool. Legislation has been introduced to expand the pool of eligible venture capital firms to more than insurance companies, such as banks and utility holding companies.

A second $50 million venture capital initiative is being studied by the State of Wisconsin Investment Board (SWIB), which oversees state retirement fund investments. This fund will target biotechnology businesses and technologies developed within the University of Wisconsin-Madison and the Medical College of Wisconsin. The SWIB program would be managed by an existing venture capital firm.

The third proposed state-backed venture capital program is included in the Governor's budget request for the 1999-2001 biennial budget request. The measure would support the creation of a $1 million nonprofit venture capital fund for biotechnology investments by the Wisconsin Housing and Economic Development Authority.