While attending the 2013 Wisconsin Early Stage Symposium in November, PitchBook TV had the opportunity to sit down with Lisa Johnson, the vice president of entrepreneurship and innovation at the Wisconsin Economic Development Corporation (WEDC). In the interview, Johnson discussed Wisconsin’s startup scene, WEDC’s involvement in the space, which industries are on the rise and ways the WEDC helps support Wisconsin entrepreneurs, both now and in the future.
Full Interview Transcript
Q: Lisa, tell us a little bit about what you do?
A: I lead the entrepreneurship and innovation division within the Wisconsin Economic Development Corporation. We’re focused on getting more startups going in the state as well as looking for ways to support getting more investment capital into the state. We also support our entrepreneurs in those efforts, as well as foster industry and entrepreneurial connections, collaborations and with the university sector. So it’s that broad range of interactions, collaborations between the university industry and our entrepreneurs.
So far I’ve been hearing a lot about how the whole startup ecosystem is starting to develop a little bit more, where universities are producing students and research, and there’s a little bit more investment coming in. Could you elaborate on whether that’s the case and what you see going forward for Wisconsin?
I definitely see it. I see it in different sectors. Because I came out of the biotech sector, I think there was a strong startup community, at least here in Madison, because it’s such a strong research university. The University of Wisconsin- Madison is in the top three of major research universities, getting over a billion dollars of research. What tends to be happening then is that obviously that funnels into the life science area, which has created an environment in which a lot of life science companies have started. But now we’re seeing this shift of even the IT sector taking off. This is one of the strongest computer science schools also in the nation. Then a separate part is you have a company such as Epic, that is growing by 1,000 employees every year. Well what happens with that is now you’ve got this consolidation in healthcare IT, and a lot of energy and a lot of experience coming out of Epic, if people are even leaving that company, and they’re starting companies. So what we’re seeing is, and Brad Feld just spoke about that [at the Early Stage Symposium], is entrepreneurs are starting to lead this movement. It started in the life science area and now we’re seeing it in the IT sector, healthcare/IT, and it’s not just happening in Madison. We’re starting to see this really take off in Milwaukee. Same kind of sectors, less so on the life science I would say, but now we’re seeing it in water. They’re becoming a leader in the water technology area and entrepreneurs are coming here and starting their companies because you have such powerful private industries sitting here. So we’re just seeing this real dynamic of this energy with startups starting to occur here because they’re seeing its possible, and they see the strengths that we have, again from the different industry sectors, really based in Madison, Milwaukee, as well as up through the Fox Valley, which is your Appleton, Oshkosh, Greenbay areas with the whole manufacturing sector. Wisconsin is one of the leading manufacturing states. So you’re also seeing entrepreneurial activity starting to happen in that space also.
Another component that I think a lot of our viewers would be interested in is the venture capital and private equity investment in the state and how that can help spur on that ecosystem. I was wondering if you could talk a little bit about how Wisconsin fairs in attracting capital and what benefits that brings?
I think if you have good investments, the VCs or angels, they find it. They’re going to come here. They’re going to invest. They’re looking for good deals, good valuations. I think it just depends what stages the companies are. I think at that early, seed stage, we’ve recognized that we need more seed capital. A VC is certainly not going to take a company at an idea stage, before revenue. Same thing even with angels, that’s highly risky. So how can we seed some of those ventures? We certainly have seed accelerators; we’ve also developed a fund called Capital Catalyst. It’s a seed fund where we do matching with other entities to seed these early stage companies. So that’s one of our first priorities. Let’s get a number of companies going, finding ways to seed them at the earliest stages so we can get them down the line so they become more attractive for your VCs and your angels. So that middle area, we have some really good angels in this state. We’re still at the early stages in Wisconsin, still seeing that flow and turn-around and getting those reinvestments. We are definitely starting to see more VCs coming in from the coast. It’s just becoming an awareness that there’s actually activity here in Wisconsin. That our good valuations attract VCs into the state, so we’re always still looking and we need to continue to market, do a better job on that, and link our Badgers that are out there. There are a lot of UW-Madison Badgers all over the place that are wanting to invest back into the state, so it’s just finding opportunities for them to do so.
Do you have anything else to add?
What we’re really pumped about in Wisconsin is we do see this energy starting to happen in the state, and I do feel these entrepreneurs are really leading it. It happened in Colorado, it happens in other states. We’re really seeing it especially in Madison and Milwaukee, that there is this movement of startup activity, especially in some of these specific sectors that I’ve already talked about, and we’re just finding ways to follow behind that. What are the best ways? Whether it’s the university, the state government that I’m a part of, what ways can we best support that activity? And I’m seeing that starting to happen. We are very aware that no one will notice that maybe next year or two years from now, what they hoped and what my goal would be, is five years, 10 years from now, they’re gonna say wow, in 2011, 2012, 2013, Wisconsin really started to change the dynamic of who they were and recognizing that this could be a really powerful startup community. I think that’s what we’re seeing in the state and we’re really excited about it.
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