Networking and Support Fuel Wisconsin’s Entrepreneurial Landscape
NOVEMBER 15, 2012
(Editor’s Note: This is the first of a multi-part series on innovation and entrepreneurial activity in Wisconsin. This article focuses on the importance of developing a culture of creativity and exploration, and the two groups who are providing the support and resources entrepreneurs need in central and western Wisconsin. Future articles will highlight new programs in other areas and the push for state-supported investment funding.)
Ed Marron and Dan Forss discuss innovations at the Annual I&E Club Rendezvous, which brings together seven regional clubs.
It probably won’t surprise most people that Wisconsin, or the Midwest for that matter, is not a hot-bed of startup activity. According to the Kaufmann Foundation, which studies and promotes entrepreneurship, Wisconsin ranked #40 in 2011.
However, while it may not be mainstream, a sub-culture of creativity and innovation exists that may be surprising. Throughout the state, entrepreneurs are developing networks, pooling resources and using Wisconsin’s business assets to stimulate new business development.
And it’s not just in Milwaukee or Madison either.
Creating an entrepreneurial culture
“Wisconsin has this entrepreneur ecosystem: inventors, risk-takers, mentors to other entrepreneurs, and investors laying the foundation for early-stage investment and stimulating more business creation,” says Lisa Johnson, WEDC’s vice president of entrepreneurship and innovation. “These activities are critical to creating a culture where you can start a company and take your ideas to company formation.”
“We need to establish high-growth companies that will fuel all other parts of our economy,” Johnson adds. “We’ve seen industry pockets that have achieved global recognition, like biosciences, manufacturing, gaming/software companies, energy and health care.”
However, Johnson says the state needs to do much more to support innovation and commercialize the research coming out of our universities. Several challenges exist, including our conservative culture, lack of startup funding, and the identified “brain drain” of young talent leaving the state for other opportunities.
“We need to invest in entrepreneurial pursuits knowing that some of the startups will fail but recognizing that a small startup today may be a company that’s growing by 20–25 employees per year down the road,” Johnson says. “Getting more startups in the pipeline will benefit our economy not only through business and job creation but also through wealth creation and entrepreneurial experience.”
“As companies are sold, that wealth and experience come back into the state to stimulate more investments and company creation. That recirculation of money, talent and acceptance of risk and failure has made a startup mecca like Silicon Valley what it is today.”
Johnson adds that one of these startups could turn into the region’s next Epic, referring to the Verona medical software giant that started in a basement office in Madison in 1979 and now employs more than 5,000 employees and expects to add another 1,000 within the next year. (Read more about Epic here.)
Research about the link between startups and overall job creation demonstrates the importance of investing in startups to boost the economy. According to analysis by the Kauffman Foundation and data from the U.S. Census Bureau, startups and companies less than five years old account for nearly all net job creation in the United States.
WEDC programs fill key need
Because of the critical need for funding, in October 2012 WEDC launched its Capital Catalyst program. Through the program, WEDC partners with existing organizations already working with entrepreneurs that can identify local needs and serve as the conduit for business creation.
The Capital Catalyst matching fund program offers seed grants for activities like prototype development and customer analysis, which are needed for a business to get started but often can’t be funded through bank loans.
“We hear from entrepreneurs that they need more capital to create more business,” Johnson says. “We’re attacking that problem by investing in both regional startup activity and sector-based growth, through direct assistance like the QNBV (Qualified New Business Venture) program and indirect funding like Capital Catalyst.”
Johnson adds, “There are great things happening in our state, and we’re focused not on driving business creation but on supporting and sustaining it.”
And given that entrepreneurs are mavericks by definition, lending a hand rather than paving the way sounds like a good model for state-supported programs.
For more information
Inventors & Entrepreneurs Club of Juneau County
Wisconsin Economic Development Corporation