A new $30 million venture capital fund that is the result of a collaboration between the State of Wisconsin Investment Board and the Wisconsin Alumni Research Foundation will focus on information technology and software startups.
The function of the fund will be to invest in early-stage companies focused on information technologies and software, according to WARF Assistant Portfolio Manager Craig Heim.
Gov. Scott Walker expressed his enthusiasm about the venture capital fund between these two organizations in a statement Tuesday. With an initial investment of $30 million, Walker added, the fund will succeed in targeting and focusing on information technology startups in Wisconsin.
“I am excited about the prospects of this venture capital,” Walker said in the statement. “Investing in new or expanding businesses is just one of the important ways we demonstrate our shared commitment to improving the business climate in Wisconsin.”
The fund, named 4490 Ventures, is a legal partnership between WARF and SWIB, according to SWIB spokesperson Vicki Hearing.
The name of the fund comes from the 44 degrees north latitude and 90 west longitude lines at the center of the state of Wisconsin, according to a University of Wisconsin statement.
Discussions about 4490 Ventures started about 18 months ago, according to Hearing. She said the partnership stems out of the experience that both organizations have.
While it is clear WARF and SWIB are partnering to form this fund, it will be a separate standalone company, Heim said. He said WARF brings a technology perspective and SWIB brings a strong perspective of the state of Wisconsin as a whole.
“If you look at it that way, it’s a good partnership,” Heim said. “It seems like it’s a good relationship for what both organizations bring to the table.”
Historically, because investments tend to focus on the life sciences rather than software and information technology, WARF and SWIB see a good opportunity in this field, Heim said.
Most information technology and software startups, Heim said, are more capita efficient, meaning investors can do more with less with these companies versus those pertaining to life science opportunities that require more capital.
WARF and SWIB’s efforts will not be limited to the university, Heim said. He said they will have the opportunity to invest in companies across the state of Wisconsin.
Heim said both organizations consider the state to be a really good investment opportunity due to the information technology clusters within the Wisconsin, compared with the amount of venture capital in the state. Particularly, he added, because there is so little venture capital coming into the state, yet the cluster itself is reasonable.
There is a need for more venture capital funds in the state of Wisconsin, according to Hearing. She said venture capital funds are not as common in places like Chicago, Wisconsin and Minnesota as they are on the west and east coasts.
“There might be a really good idea here [in Wisconsin],” Hearing said. “But if nobody pays attention to them, then they are not going to get the money.”
