Wisconsin needs a new entrepreneurial spirit
The Wisconsin Idea — the concept that the knowledge and innovations from the university reach to the borders of our state and beyond — highlights the pre-eminent role that our university system plays in creating a better quality of life for citizens.
We believe the Wisconsin Idea needs to be lived as much as loved. We should all seek ways to help university innovators turn ideas into companies. We see this opportunity across the life cycle of Wisconsin businesses that our firms back. Venture Investors has backed 25 companies that have come out of the University of Wisconsin-Madison. Generation Growth is a private equity firm investing in mature industries that represent the core of Wisconsin’s economy.
Wisconsin isn’t opposed to the bold initiative, but we like the idea of others taking those actions. This is the bane of our existence. Wisconsin needs a cultural revolution, one that fosters taking risks and thinking like an entrepreneur. If we wait for others to do it we lose ground in a rapidly changing world.
There is no shortage of ideas, thanks to the strength of our university system. Interdisciplinary collaboration really happens here. You can find connectivity, resources, experts in any field, and there’s an openness to dialogue.
But living in a state that sometimes feels like a small community works to our disadvantage in other ways.
We have a density issue. Our great universities are not in commercial, population or financial centers. Boston and San Francisco are the hubs of the venture capital industry. All of the starter material is in one place.
Venture capital operates as a social network. VCs like to stay close to their projects. That’s one reason 80% of American venture capital is managed and invested in just three states: New York, Massachusetts and California.
It’s easy to blame VCs who won’t get on a plane for Wisconsin, but we have to take responsibility. We have to demonstrate our belief by seeding the opportunities and building the social network to the coasts.
The tone must be set at the top in the boardrooms and executive suites of our leading corporations and institutions. We need broader participation in capital formation, investment, collaboration and mentoring of our innovators. It would only take a few bold leaders — like Badger Meter and the Water Council in Milwaukee — to start it by serving as catalysts.
And it is more than just money. Institutional commitments are the first step in addressing our human capital challenge. We need to show that we are not limited to a conservative approach. We should demonstrate we are embracing the entrepreneurial generation and we can begin to transform brain drain into brain gain.
Participation in the entrepreneurial economy is in the self-interest of the mature companies in our leading industries. Attraction and retention of risk takers and engagement with entrepreneurs are contagious. It encourages intrapreneurship, returning these companies to the cultural roots that made them leaders.
Wisconsin’s political leadership can help with policy decisions around startups that can spur jobs and growth. For example, consider how the state could further encourage broader participation in capital formation and create opportunities for the State of Wisconsin Invest-
ment Board to increase its venture capital allocation.
WARF could play an important role in keeping innovation local by licensing new technology here or, if licensing elsewhere, encouraging commercialization in the state. Measure the return beyond royalties, such as entrepreneurial faculty retention, research collaboration, job creation, wealth creation and philanthropy.
Finally, UW-Madison has 400,000 living alumni fanned out across the globe. If we engage them as participants in the Wisconsin Idea, it will increase their philanthropy.
When you have a chance to help take something out of a lab and bring it to market, and it impacts the health of people and the economy, the rewards go way beyond finance.
This is what brings the Wisconsin Idea to life.
John Neis is executive managing director of Venture Investors LLC, an early stage venture capital firm with offices in Madison and Ann Arbor, Mich. Cory Nettles is founder and managing director of Generation Growth Capital Inc., a private equity fund with headquarters in Milwaukee.