Program Goal:

The goal of the Capital Catalyst program is to incent capital formation and investment in startups and emerging growth companies in the state of Wisconsin.

The program primarily supports the following WEDC Strategic Pillar and Focus Area:

Business Development: Entrepreneurship and Innovation

Program Description:

The program provides matching grants to seed funds managed by local communities and other eligible entities to provide capital to high-growth startups and emerging growth companies.

The program increases the availability of capital to startups and emerging growth companies to support growth and attract additional private investment.

Eligibility Requirements:

Applicants for Capital Catalyst funds must demonstrate organizational capability and the availability of entrepreneurial support to achieve the goals of their program. Capital Catalyst fund recipients may include units of government, educational institutions, foundations, other nonprofit entities, or investment holding entities established by otherwise eligible entities.

Applicants should have an established investment/selection committee, investment/funding criteria, application process, and intended use of returns. Eligibility for the program requires a 1:1 match of the amount of funding provided by WEDC. This match must be documented prior to the disbursement of funds.

Investment/funding decisions will focus on assistance to companies in industry sectors including but not limited to advanced manufacturing, agriculture or food processing, information systems or software, medical devices, biosciences and energy.

Use of Funds:

Capital Catalyst recipients are required to make grants, debt, royalty-based investments and/or equity investments in startups, early stage and emerging growth companies that are located in or will locate in Wisconsin. Recipients will agree to utilize a segregated account to receive direct grant funding from WEDC that may include the recipient’s matching funds.

Funds may not be used to support expenses related to the relocation of a business between communities in Wisconsin.

Returns on loans and/or investments to the fund capitalized by WEDC and matching funds may be used for additional awards to eligible businesses, direct administrative expenses of the recipient, distribution to WEDC and applicant organization in proportion to the initial match, and/or other purposes approved by WEDC.

Incentives and Available Funding (FY19): $1,500,000

The program provides grants to approved Capital Catalyst recipients that establish seed funds and meet the eligibility requirements of the program.

Activities and Expected Outcomes:

Award five organizations to support the financing of 30 startup and emerging growth companies. Recipients will maintain an average co-investment ratio of 1:1, and companies financed by local seed funds will achieve a 3:1 leverage of other investment.

Performance Reporting:

Recipients will be required to periodically submit a performance report documenting the number of organizations assisted, as well as any other contract deliverable.

WEDC may impose additional reporting requirements to evaluate project performance and to ensure compliance with contract deliverables.

Application and Awards Process:

Capital Catalyst has a continuous application process. Applicants for a Capital Catalyst grant should complete an application through an account manager. The completed application will be assigned to an underwriter and go through the award review process.

Applicants for Capital Catalyst Program funding are required to provide to WEDC, in writing, information on the applicant organization, investment fund management and strategies, and the process for approving awards made from the fund.

For more information on application review, internal process and award distribution, please refer to WEDC’s award administration policies and procedures.