Northeastern Wisconsin’s nascent startup culture will get a much-needed boost next year.
A $10 million boost, to be more specific. Maybe more.
The Winnebago Seed Fund wants to raise at least that much money to invest in 10 to 14 startup companies over the next four years beginning in 2017, fund manager David Trotter said. The Badger Fund of Funds, a $25 million venture capital fund started by the state of Wisconsin, will contribute $4 million toward the Winnebago Seed Fund leaving Trotter to raise at least $6 million locally. To date, he’s more than halfway there.
“From an investor standpoint, a lot of people in the region want to help start businesses, but there’s no formal group doing it right now,” Trotter said. “The fund will focus on funding seed level companies. That’s really where the need is and I think entrepreneurs in the area see that, too.”
Startup capital is just one of several things local entrepreneurs said are vital to build and sustain entrepreneurship in the region. Trotter said the seed fund’s investments should give startups enough first-year funding to develop their ideas and get the business off the ground.
The Winnebago Seed Fund won’t focus on a specific region or industry, but Trotter said it’s his intent to target northeastern Wisconsin businesses. He said that of the 200-plus business funded through in state’s Qualified New Business Ventures Program more than 100 were in Dane County and more than 70 were in the Milwaukee area. He said only four businesses in Winnebago, Outagamie and Brown counties were funded through the program, which entitles investors to a 25 percent state tax credit.
“With the businesses and colleges and universities in the region, we should be seeing more startups,” Trotter said. “The missing part of the formula is seed-stage capital. I see an under-served part of the state where no one’s focused on the seed stage yet.”
The Winnebago Seed Fund launched this spring, around the same time The Idea Fund of La Crosse kicked off in western Wisconsin. Trotter said the goal will be to launch more startup funds like these two with a hope of turning them into self-sustaining venture capital funds in the future.