Lawmakers to introduce competing venture capital bills
State lawmakers have hopes a new bill can increase investments in start-up businesses and in turn, create more jobs.
A bipartisan coalition of lawmakers rolled out a measure Wednesday that would create a $25 million “fund of funds” the state would use to invest in new Wisconsin businesses.
“Very few people know what venture capitalists are,” said Sen. Alberta Darling, R-River Hills. “They have images of rich dudes who have a lot of money to invest. Well, basically they are a lot of people around the state who want to make investments in quality projects so either they or their clients make money. That’s a good thing and we want entrepreneurs and the state to make money.”
The idea is getting support from some small business owners who know the importance of angel and capital investments, like Toni Sikes, who co-founded The Art Commission in Madison. The company connects artists to architects and companies looking for large projects, and it needed help to get started.
“The first round of financing was $510,000,” said Sikes. “It was angels, all private individuals. We wouldn’t be here without it. It was absolutely critical.”
$25 million could fund just a few multimillion-dollar investments. The bill’s authors, including Darling, Rep. Mike Kuglitsch, R-New Berlin, Rep. Fred Clark, D-Sauk City, Sen. Tim Cullen, D-Janesville and Rep. Scott Suder, R-Abbotsford, call this amount allocated by Gov. Scott Walker in the next budget a start to venture capital in the state. But some say it isn’t enough to draw businesses here and want to see closer to the $200 million that was called for by a task force last year, and will introduce a competing bill.
“Clearly $25 million just doesn’t do it,” said Rep. Peter Barca, D-Kenosha. “Somewhere in between this starting point and getting to the goal we initially set up is the solution.”
Barca and Sen. Julie Lassa, D-Stevens Point will introduce a competing bill in the next week, but won’t say how much they will call for in that bill.
Sikes said the state simply needs to get something going.
“If we can prove to the state in terms of impact of people hired and companies started, I think we can prove this is an important thing for the state to do in terms of economic development,” said Sikes.
In the bill rolled out Wednesday, that investment would require a two to one match from private investors and a fund manager would be selected by the non-partisan state investment board.