Governor Scott Walker is proposing ways to support start up businesses in the state. Walker’s office on Thursday announced an extensive list of economic development initiatives, aimed at improving the business climate and encouraging entrepreneurship and innovation.
“The majority of jobs created in Wisconsin will come from small businesses or employers who are just getting started,” Walker told the Governor’s Conference on Economic Development meeting in Madison. He said he’d include funding for the initiatives in his upcoming state budget.
Although the governor hinted at a venture capital fund provision, Walker stopped short of confirming its presence in the budget. “Part of the reason why we didn’t announce it today is there’s still some questions as to whether the most effective route is in the budget or if it’s in a separate piece of legislation that could come up before the budget is passed,” Walker said.
The most active proponents of a venture capital fund are primarily in agreement about their wish list. The Wisconsin Technology Council, which advises the governor and legislature, wants the fund to have $200 million available over six years with $30 million available annually. The remaining $20 million would be available for direct investment into companies. Suggested firewalls include limiting the amount one business can receive and ensuring the money goes to Wisconsin companies.
The Technology Council’s Innovation Network hosted a panel last week and talked of the importance in drawing high-tech talent and investment to Wisconsin as opposed to the obvious hubs like Silicon Valley and parts of the East Coast.
Gregory Pfifer, CEO of SHINE Medical Technologies, said there is no shortage of “very bright” homegrown talent in the tech sector who want to stay in Wisconsin but find better opportunities elsewhere.
The job creation aspect was also emphasized. “Nineteen percent of Minnesota’s workforce is attributed to venture capital funding compared to three percent in Wisconsin,” said Steve Lyons of the newly formed Wisconsin Growth Capital Coalition.
Technology Council President Tom Still dispelled the myth that only Madison and Milwaukee would receive, or are interested, in the money. He emphasized there are already 12 angel networks or funds outside the state’s two largest metropolitan areas.
Venture capital legislation failed last legislative session in part because of disagreement over the role of CAPCO’s. These out-of-state financial firms aren’t expected to be a sticking point this time. Lyons, who is very active in discussions with lawmakers, said they haven’t heard anything about CAPCO’s. “I think with this session being as far along as it is, I think we would have by now.” he added.
Governor Walker confirmed Thursday there will not be a role for CAPCO’s in his budget proposal, to be released Feb. 20.
Other initiatives to be included (courtesy of Governor Walker’s office).
Seed Accelerator and Capital Catalyst Programs: Investing nearly $6 million in Seed Accelerator and Capital Catalyst Programs at the Wisconsin Economic Development Corporation. These programs support high-potential entrepreneurs and businesses as they start and grow.
Seed Accelerator Program: Aimed at increasing the number of startups in the state by providing matching funds to communities and partners to establish business model programs to assist entrepreneurs in taking ideas to company formation. These local entrepreneurship programs will provide participants with tools and guidance to start new businesses, such as mentorship, business planning, and networking with key contacts and potential investors.
Capital Catalyst Program: Provides access to financing for entrepreneurs who have successfully completed an accelerator program. WEDC has already made investments with local partners through this program, including the Innovation Fund of Western Wisconsin in Eau Claire and the Whitewater Community Development Authority, which was announced earlier this week.
Wisconsin Economic Development Corporation Marketing Program: Providing $10.9 million over the biennium to support WEDC’s marketing program promoting Wisconsin as a great place to do business. WEDC marketing focuses on attracting businesses, promoting investment opportunities in Wisconsin, and changing the negative perceptions that may still exist about doing business in Wisconsin. By increasing resources to WEDC for marketing, Wisconsin’s investment in this program will make the state more competitive among the economic development marketing programs of our peers in the Midwest.
VETransfer Grant: Providing an additional $500,000 grant to VETransfer through the Department of Veterans Affairs’s Veterans Trust Fund. VETransfer is a business accelerator for U.S. Veterans looking to start their own businesses. VETransfer must use at least $300,000 to increase the amount of seed funding available to provide grants to Wisconsin veteran-owned start-ups; VETransfer may use up to $200,000 to support other activities directly supporting the nonprofit’s mission.
Economic Development Tax Credit: Providing an additional $75 million in available credits for the Economic Development Tax Credit program. This tax credit is aimed at encouraging businesses to make capital investments, expand and retain jobs, invest in job training, and locate or retain their corporate headquarters in Wisconsin.
Angel Investment Tax Credit: Lifting the cap on this tax credit program focused on encouraging private investment in start-up companies. The budget removes the maximum cap, which is currently set at $47.5 million, but retains the annual limit, effectively allowing this program to continue into the future.
Department of Tourism: In 2011, tourism in Wisconsin had a $16 billion impact, an increase of 8 percent from 2010. Over 95 million people visited the state supporting 181,000 jobs and approximately $1.3 billion in state and local revenue.
Tourism Marketing: Expanding the Department of Tourism’s effective marketing campaign by allowing the department to keep over $1 million in funds previously contained in a budget lapse.
International Tourism Marketing: Implement strategic marketing plan to grow international travel. The Department will use $100,000 each year to support efforts to attract international visitors to Wisconsin.
Grant Programs for National Meetings, Conventions, and Sporting Events: Allocating $75,000 per year for grants to programs aimed at attracting national meetings, conventions, and sporting events.