Tuesday, June 28, 2011
Gov. Scott Walker Tuesday opened Wisconsin's pavilion at the world's largest gathering of biotechnology companies by announcing that Wisconsin was going to continue efforts to raise the venture capital needed to build and grow new technology companies.
With BIO television cameras rolling, Walker told the BIO International Convention in Washington that one of his top priorities this fall will be a bipartisan bill that would create a state-supported venture capital fund to help small, start-up companies grow into successful commercial enterprises.
Walker told the crowd at the ribbon cutting for the Wisconsin Pavilion that creating new biotechnology companies is an essential part of the goal of creating 250,000 new jobs in the next four years - 10,000 of them from newly created small businesses.
And a large, healthy venture capital system "is essential in order for Wisconsin to create those new businesses,'' he told the crowd.
Wisconsin has all the components for a much larger biotechnology industry, he noted. What the state is severely lacking is the venture capital needed to take start-up companies and turn them into commercial companies.
"We have a number of companies that are caught in what is often described as the financing 'valley of death' for start-up companies,'' noted Tom Still, president of the Wisconsin Technology Council. "These companies have attracted angel financing in many cases, but generally need to raise $2 million to $5 million to take their companies to the next level.
"This is a critical issue for our industry - and this new fund would make a huge difference."
A $400-million bill to increase the level of venture capital in Wisconsin was introduced in May but bogged down because of questions about $200 million in certified capital company investments, which critics described as too expensive and driving unnecessary subsidies to out-of-state fund managers.
At least three bills are now circulating in the Legislature that would create a venture capital fund of $250 million to $500 million that would leverage an equal amount of private venture capital. Walker said he wanted to work with both political parties on a final bill that could pass with bipartisan support in the fall.
Part of the reason this can succeed, he added, is that the fund could be managed by the new Wisconsin Economic Development Corporation, which will have the flexibility to become involved in economic development in ways that the former Department of Commerce could not as a state agency.
"People focus on the restructuring,'' Walker said. "The real story is that we will now have the funds to make a significant difference -- and we'll have the flexibility and creativity to do the job."