As part of his 2013-15 budget, Gov. Scott Walker will allocate $25 million for a “fund of funds” that will seek to create jobs by making investments into start-up and emerging companies. “We need to show we’re serious about growing the economy in Wisconsin by ensuring startups have access to capital,” Walker said in a release.
Currently, Wisconsin holds 2.11% of the nation’s patent filings (12th in the nation) and has 2.15% of the nation’s academic research spending (13th in the nation), yet the state receives only 0.36% of the country’s venture capital investments.
In the fund of funds, money from the state and other entities would be combined and typically managed by a fund manager. State money would go only to the general fund and not to individual companies. Investors would get a proportionate share of the return on investment, perhaps on a 2-to-1 match basis (e.g., private venture funds would put up $50 million to the state’s $25 million) as recommended by the Wisconsin Capital Growth Coalition.
Until a program is firmly established, the $25 million would likely be held by the Department of Administration, since legislators are reluctant right now to funnel money to the Wisconsin Economic Development Corp. after recent mismanagement issues.
