Wisconsin’s dead last position for startup activity nationwide has impacted students looking to start their own businesses, leading some to seek opportunities outside the state.
Despite having a “rich history” of entrepreneurship, the Kauffman Foundation ranked Wisconsin last in the nation for startup activity two years in a row. While this reflects the state’s overall lack of such activity, it also shines a light on the lack of initiatives to encourage entrepreneurs.
Some activists, however, are trying to change this. U.S. Sen. Tammy Baldwin, D-Wisconsin, has introduced a bill that would help entrepreneurs in the early stages of their startups. Madison organizations like 100state are looking to give students opportunities to grow their businesses as well.
Student entrepreneurs especially face tough barriers when starting businesses. Claudia Seidenberg, co-director of MadVentures and operations manager for 100state, said students often have great ideas but do not know where to start.
Students find it hard to connect with other professionals like graphic designers and developers who can help their idea grow. There are few and often inadequate resources for such students to seek help in Wisconsin, Seidenberg said.
“There’s no great road map for how to get started as an entrepreneur in Wisconsin,” Seidenberg said.
Baldwin said access to funding for businesses was the greatest impediment to startups in Wisconsin. Through conversations with Wisconsin-based entrepreneurs, Baldwin said she found most needed this money to grow their business later on.
In the case of student entrepreneurs, Baldwin said college debt also plays a key role in access to funding. Students with high debt might find it difficult or impossible to obtain loans for their startups. Seidenberg said this is common and strongly disincentivizes students to start their own businesses.
Seidenberg, a University of Wisconsin junior, said many students make the decision to leave the state because of the lack of opportunities. She said Wisconsin needs to work on incentivizing student entrepreneurs to come to the state to start their businesses instead of leaving.
Currently, Wisconsin has only one fund that gives money to entrepreneurs in all fields except biotechnology and life sciences, Baldwin said. She said this funding source is minimal and not adequate enough to help those looking to create a startup.
“There have been some steps the state has taken but there are still major gaps in Wisconsin’s initiatives,” Baldwin said. “When we see such poor results in our state it calls for action.”
To fill this gap and meet student entrepreneurs’ needs, Baldwin proposed the Small Business Innovation Act, a federal, bipartisan bill that focuses on spurring entrepreneurship and assisting small businesses and startups in their early stages. By encouraging the growth of small businesses, the bill would stimulate job creation and grow Wisconsin’s economy, she said.
Organizations like LynxBio, Madison Region Economic Partnership, Wisconsin Technology Council and Wisconsin Innovation Network, among several others, support Baldwin’s bill.
The bill targets gaps in Wisconsin’s venture capital fund and also provides more funding options to startups. Baldwin said startups in biotechnology and life sciences fields will be able to receive capital with this bill as well.
Michelle Somes-Booher, Wisconsin Small Business Development Center director, said UW has a vibrant startup community that needs to expand to other parts of the state. She said the state should invest and take more initiatives to mold an entrepreneurial mindset at a young age.
“It’s risky and generally Midwesterners are more risk averse but we need to do this to encourage startups,” Somes-Booher said .
UW’s Small Business Development Center lends a hand to small business owners looking for growthThe University of Wisconsin School of Business mentors business owners and entrepreneurs to help local businesses grow and improve. Small Read…
Seidenberg said Madison has a lot of co-working spaces, which are offices that allow small business owners and people with startups to come and work on their ideas. UW also provides avenues like the Weinert Center for Entrepreneurship for students seeking help in starting their own businesses, Somes-Booher said.
Seidenberg said the state needs to prioritize investing in the development of these spaces and supporting student entrepreneurs.
“Going it alone is really hard and the more we can create opportunities to sustain that supported space, the more we’ll see of entrepreneurship in the state,” Seidenberg said.