Gener8tor, which runs start-up training classes in Milwaukee and Madison, said Wednesday it has raised more than $2.1 million for a second fund.

Gener8tor Fund II is set up to invest in the start-ups — usually about 10 a year — that go through gener8tor’s classes. It also sends a signal that gener8tor is committed to the long-term operation of its programs, which are known as accelerators, organizers said.

“It’s positioning gener8tor for a 20-year run where we can continue to seek, obtain and close venture funds to run accelerators in the state of Wisconsin,” said Joe Kirgues, a gener8tor co-founder and a partner in the new fund.

Investors in the new fund include: CSA Partners, the venture capital fund backed by Milwaukee County Executive Chris Abele; Venture Management, Madison; and Wisconsin Investment Partners, Madison.

With the fund and other investments from partners, gener8tor will be able to offer start-ups at least $90,000 and as much as $140,000 in debt and equity investments when they complete the program, said Troy Vosseller, who is also a co-founder and partner. Gener8tor companies often go on to raise much more follow-on funding.

Since forming in 2012, gener8tor has graduated 28 start-ups that have raised a total of nearly $30 million, Kirgues said. The competition to get into the program is intense. Gener8tor had more than 450 applications for five slots in its most recent program, which finished in Milwaukee in October.

While relatively small, the $2.1 million fund gener8tor said it has raised could have big implications for Wisconsin’s start-up community, investors said.

Gener8tor Fund II has attracted a list of notable investors that includes Jeff Rusinow, a Wisconsin angel investor, and Wilson Sonsini Goodrich & Rosati, a Silicon Valley law firm known for its work with start-ups.

Some of those who put money into the new fund say they did so because gener8tor, in only about three years of existence, has produced strong results and buoyed the state’s start-up community.

Wisconsin has the beginnings of a sustainable, entrepreneurial ecosystem, and gener8tor is an important part of it, said Mark Reinstra, a partner at Wilson Sonsini.

“They get it. It isn’t about flash, but rather about substance, hard work and perseverance,” Reinstra said.

The new fund establishes gener8tor’s intent to continue raising money and running training programs in Wisconsin for the next 20 years, Kirgues said.

Kirgues, 31, and Vosseller, 30, are the people who “do the heavy lifting” at gener8tor and should share in the upside, “or you run the risk of them moving on to greener pastures,” said Rusinow, a Milwaukee entrepreneur.

The new fund represents a good way for investors to get access to the high-quality start-ups that come out of gener8tor’s programs, Rusinow said. It also puts Wisconsin on the map in terms of quality start-up training programs, he said.

“World-class incubators and accelerators have been in other parts of the country for a number of years, but now Wisconsin has a world-class, top 10 incubator right in our backyard, and the results so far have been extremely encouraging,” Rusinow said.

“There’s a reason that no other group is drawing the number and quality of applicants from all over the country,” Abele said. “It’s because they’re providing real value and the track record is good. They have outcomes.”

Gener8tor’s first fund was backed by Dan Armbrust, founder of Granite Microsystems, a Mequon original equipment manufacturer, and Dan Bader, president and chief executive officer of the Helen Bader Foundation. The amount of money in the first fund has not been disclosed.

via Gener8tor raises $2.1 million for fund to invest in start-ups.