Investments

Wisconsin early-stage companies must position themselves to get capital

Bank Of America Investment By Tom Still • 09/26/05

Stearns has over 20 years of experience in private capital investments in a variety of industries, capital structures and stages of development in companies located in the U.S.

Investment Opportunity Madison, Wis. - On Sand Hill Road in Menlo Park, Calif., which is the venture capital version of Wall Street, the talk these days is of a "boomlet" in deal-making. Technology firms that only a few years ago were lucky to get a meeting with a venture capitalist are now entertaining multiple offers to finance deals. The New York Times reported last week that one company, XenSource, had seven solid investment offers in three weeks.

In Wisconsin, however, where venture capital firms are all towards the end of their investment cycles, there was no significant investment activity for the third quarter. Overall, Midwestern states saw investments of $144 million, up from $119 million in the second quarter, with Minnesota and Missouri leading the way. Michigan surged to third place for the quarter driven by a single firm that raised $30 million. Overall, Minnesota, Ohio and Missouri continued to lead the region for investments in 2005.

Banc Of America Investment Most Wisconsin companies should be so lucky. While the good times may be returning to the Silicon Valley, history suggests relatively few deep-pocketed venture capitalists will find their way to the Upper Midwest.

The TAG program provides grants of up to $15, tech companies to offset costs of hiring qualified independent parties to perform professional services. tech companies with less than 100 employees that are seeking angel or other seed capital investment, to facilitate the capital search.

Banking Investment Then again, history need not be repeated if Wisconsin companies are better prepared to make the sales pitch when opportunity knocks.

1) This is the quick equation of all of the current assets subtracted by all the current Liabilities. This gives a rough working capital position which indicates the businesss ability to pay bills and shows a snapshot of the liquidity of the entity. This is where most companies struggle, and is also where most sureties will look for a weak spot. You can keep your working capital strong by staying on top of your accounts receivable, thus making them cash. In addition, company loans.

Investment Solution Strategic Policymakers have long asked why Wisconsin cannot attract more private equity investment, such as venture and angel capital. The answer from investors themselves has been relatively simple: Wisconsin is a great state for generating technology ideas, but barely average at creating tech companies with business plans that stand a chance of paying off over time.

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Investment Banking Services A lot of work has gone into changing that equation. The Legislature worked with Gov. Jim Doyle to pass a 2004 law that created 25 percent tax credits for venture and angel investors who put money into designated start-up companies. That same law led to the formation of the Wisconsin Angel Network, which is helping networks of high-net-worth investors make connections with a pipeline of deals. The Governor's Business Plan Contest has identified dozens of investment-worthy firms, more experienced CEOs are being drawn to Wisconsin, and coaching opportunities for start-up executives have grown.

Bank Investment One such forum is the Wisconsin Early Stage Symposium, to be held Oct. 19-20 in Madison. Its goal is to give start-up companies a short course in being "venture ready." (See www.wisconsintechnologycouncil.com/events/earlystage for details.)

Alternative Investment The symposium grew out of the former Wisconsin Life Sciences & Venture Conference, which worked under various names over 20 years to connect companies with investors. Venture capitalists found different ways to screen prospective investments, however, so the conference was reborn with an instructional emphasis.

Online Investment Services Up to 60 companies will be able to take part in a workshop run by VentureQuest LTD, a Denver-based firm that specializes in helping companies prepare to attract investors.

Accompany Essential Investment The firm has more than 20 years experience helping organizations commercialize technology and bring new products and services to market. Founders Courtney Price and Mack Davis have authored a dozen books on using innovation to create new revenue sources for businesses and commercializing technology. Their program has been called "the best entrepreneurship training in America" by the Kauffman Foundation in Kansas City, and they have developed customized, proprietary systems used by more than 200,000 professionals in business environments worldwide

Investment Company The program designed for the Wisconsin Early Stage Symposium is titled "Venture Readiness Tools for Commercialization Success." It details how an idea evolves into a business plan, introduces a six-step commercialization process, and includes a software-based "New Venture Readiness Assessment."

Investment Management Solution This online self-assessment tool provides entrepreneurs with a benchmark score regarding their business practices and investment readiness. It is structured so that different raters may contribute their perspectives of the venture's business practices and their effectiveness. It provides a benchmark new venture evaluation that pinpoints both strong and weak areas so entrepreneurs can better focus their efforts to become "investment ready."

Investment Management Services During the Madison conference, entrepreneurs will develop an action plan to move their new venture to the next stage of business growth based on their software score. There will also be an "Elevator Pitch Olympics," judged by investors, to see how the companies deliver their message.

Guide Investment Stock There is no Sand Hill Road in Wisconsin when it comes to venture capital. But the region has willing investors, and even more would be willing to check out the right opportunities. If investors call, early-stage companies need to be ready to tell their stories.

Investment Manual Solution Tom Still is president of the Wisconsin Technology Council and the Wisconsin Innovation Network. He is the former associate editor of the Wisconsin State Journal in Madison.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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