A venture capital pioneer in Wisconsin

Richelle Martin is one of relatively few female venture capital fund directors in Wisconsin
Richelle Martin
Photo by Nikki Hansen

Richelle Martin is one of Wisconsin’s few active female directors of a venture capital fund, the Madison-based Winnow Fund whose goal is to raise $8 million. In a state with 55 venture and angel funds and networks, this is depressing news, if you ask me. I won’t waste precious column inches defending why diverse decision-makers matter, but consider this: 88% of all U.S. venture capital dollars go to companies with male CEOs. Do we really believe men account for 88% of our best, most bankable ideas?

“That’s part of why I [got into VC], because there weren’t [many] women, and representation is really important,” Martin says. Nationwide, only 12% of venture and angel groups have women in decision-making roles — even though female entrepreneurship has doubled in the last 20 years. Here in Wisconsin, according to the Wisconsin Tech Council’s 2019 Portfolio report, only 14% of the 121 Wisconsin companies backed by venture capital were woman-led or -owned. Female VCs are twice as likely to invest in female founders, so Martin’s role could make a big difference.

Winnow is one of the six funds selected for Badger Fund of Funds, a group established to grow $25 million of Wisconsin taxpayer dollars by investing only in Wisconsin companies. That 2013 mandate came in the wake of yet another abysmal Kauffman Foundation report, the premier index that consistently ranks Wisconsin dead last in the nation for entrepreneurial activity. Martin isn’t seeking out women — Winnow Fund is focused on pre-seed investments in innovative products developed by Wisconsin college students, regardless of gender. “But what I would love is if a woman walked into a room to pitch my fund, she’s not the only woman there.”

Martin likely never would have gotten into VC if not for a chance meeting with Ken Johnson, whose Kegonsa Capital Fund directs the Badger Fund of Funds with Santa Fe’s Sun Mountain Capital. Johnson and Martin got to talking while volunteering at a charity event. She was intrigued and he was thrilled. “He said, ‘I didn’t think someone like you existed,’ ” recalls Martin, who was more than qualified. As a University of Wisconsin–Madison Law School student, she negotiated research contracts and helped students start companies in the Law and Entrepreneurship Clinic, but she’d never considered a career in VC.

“There is no educational track for venture,” Martin says. For two years, she spent nights and weekends in Johnson’s office learning about analysis projections, due diligence, compliance and best practices, and she got training at Sun Mountain Capital in Santa Fe. It was a whirlwind education, one she hopes to pass on to others who might feel more comfortable approaching a young woman. She also aims to attract more female investors, which would strengthen her portfolio companies and produce bigger returns. That return is what matters most, which means companies need to be as strong as they can be.

“There’s data that says when women are involved in boards, companies do better. That women CEOs can do more with less,” says Martin, adding that one of the hallmarks of VC is investment in exchange for ownership stake and board seats. “Having women investors also gives me a pool from which to pick women I want to put on boards of our portfolio companies.”

There are certainly women working in VC and angel networks statewide, and we shouldn’t be dismissive of their efforts. But clearly we’re missing something.

I find the Kaufmann rankings astonishing given our world-class, multibillion-dollar research university;
Madison’s young but thriving entrepreneurial ecosystem rife with incubators, accelerators and experienced investors; a local chamber of commerce taking the somewhat rare stance of championing startups; and Dane County’s wealth of innovators, spinoffs and mentors. We have so many programs designed to support diversity in our startups, but we still don’t have diversity in our funders.

Let’s hope Martin’s leadership is a sign of things to come.

Maggie Ginsberg is a monthly columnist and senior contributing writer for Madison Magazine.