Following through on a promise from the campaign trail, Gov. Scott Walker signed a bipartisan bill last week that aims to grow Wisconsin’s private sector with the help of state funding.
The bill passed July 18 with widespread bipartisan support in the Wisconsin Legislature, with a vote of 29-3 in the Senate and 91-2 in the Assembly. The legislation will create a venture capital investment program to distribute $25 million to venture capital funds, which businesses can draw from, in order to fuel economic expansion and encourage businesses to stay in Wisconsin.
Sen. Tim Cullen, D-Janesville, one of authors of the bill, commended Walker for signing the bill in a statement.
“Today marks the beginning of a more accepting environment for entrepreneurs in Wisconsin,” Cullen said. “Today also marks the end of the Legislature’s involvement in the process, which will ensure the state’s venture capital program is not influenced by elected officials in Madison.”
Cullen added new companies create most new jobs and the new program will help encourage this trend.
Steve Lyons, president of the Wisconsin Growth Capital Coalition, said the benefits to Wisconsin businesses are extensive under the policy.
“The goal is to help start-up companies. Many of these companies grow fast and have great ideas, but they need to be able to fund these thing,” Lyons said. “What you see is that they grow, grow, grow and then they leave.”
The bill, authored by Cullen, Rep. Fred Clark, D-Sauk City, Sen. Alberta Darling, R-River Hills and Rep. Mike Kuglitsch, R-New Berlin, also looks to create enough of an incentive to keep innovation in business in the state.
The $25 million allocated for the program will need to be matched two-to-one by private businesses and the individual “investment manager” selected to distribute the funds will also have to contribute some of their own money, according to a report from the Legislative Reference Bureau.
The total amount of funds injected into the state economy could be upwards of $80 million. In addition, of the original $25 million, the maximum amount a single entity can receive is $10 million, the LRB report said.
A strong feature of the bill is the bipartisan support it received in both the state Senate and Assembly, according to Lyons. He said only one legislator testified against the bill in the Assembly because of an objection that the allotted $25 million was too low.
While the bill was met with support on both sides of the aisle, Sen. Glenn Grothman, R-West Bend, opposed the bill because it did not address start-up businesses.
“For years, when venture capital is discussed, it is referring to start-up businesses,” Grothman said. “The bill says nothing about start-up business ventures.”
Grothman also voiced concerns the goals of the bill are already met by a section of Wisconsin’s statutes, which refers to “business development credit corporations.”
Despite a 2010 report from the National Venture Capital Association ranking Wisconsin 21st in the nation for overall capital investment, Lyons remains optimistic.
“We’re behind, but we’re not out of the game,” Lyons said.
