Wisconsin SSBCI venture capital, one fund of funds and five named managers

The venture program sits inside a seven-program portfolio

Wisconsin operates seven SSBCI financing programs: a capital access program, a collateral support program, two loan participation programs, a debt and equity hybrid program, and one equity and venture capital program. The Wisconsin Department of Administration is the implementing entity and contracts with the Wisconsin Housing and Economic Development Authority and with WEDC to administer them.

Treasury's portfolio table sets out the split. The WHEDA capital access program holds $3.0 million, the WHEDA collateral support program $6.0 million, the WHEDA subordinate loan participation program $6.0 million, the WEDC Capital Catalyst Fund $6.0 million, the WEDC Technology Development Fund $8.1 million, and the venture fund $50 million, for a total of $79.1 million.

The Technology Development Fund is worth knowing about because it is the closest thing Wisconsin has to a direct equity route. It provides loans matched by private capital invested as equity in Wisconsin technology companies, generally limited to 20 percent or less of an identified project or funding cycle, with the balance of the equity funding required to be available before the loan funds. Terms run five to seven years and may include conversion of a percentage of the loan to equity or a personal guaranty.

The venture fund carries two names and two published sizes

Treasury calls the program the Wisconsin Forward Venture Fund. WEDC calls it the Wisconsin Investment Fund. They are the same program, and a manager searching one name will not find the other, so both are worth knowing.

WEDC states that the fund is seeded with $50 million from SSBCI. Treasury's portfolio table agrees, listing $50 million, and the table only totals to $79.1 million with that figure. The paragraph beneath Treasury's own table says the fund provides $28 million in equity capital support, which does not reconcile with either. This page states $50 million, because two sources carry it and the arithmetic supports it, and records the $28 million line so that a reader who finds it knows it has been seen.

Treasury also states two caps on how the money may be concentrated. The program will not invest more than $15 million in a single fund, and will not contribute more than 49 percent of the total value of SSBCI and direct companion funds managed by an individual fund manager.

Five managers, published amounts, and a one-to-one match

WEDC states that fund managers raise private equity capital that matches the WEDC capital on at least a one-to-one basis, which is what turns the state's $50 million into the $100 million the program describes. Governor Evers and WEDC announced the launch on May 29, 2024, after a committee reviewed applications from 31 fund managers in a competitive process.

The announcement named five managers and the amount placed with each: HealthX Ventures at $15 million, Venture Investors Health Fund at $12 million, Serra Ventures at $7 million, NVNG Investment Advisors at $6 million, and the Idea Fund of La Crosse at $5 million. WEDC stated at the time that it was negotiating with a sixth manager for the remaining $5 million allocation.

The theses differ by manager. HealthX Ventures works in digital healthcare from Madison. Venture Investors is a healthcare-dedicated firm in Madison and Ann Arbor focused on commercialising early-stage biomedical innovation from Midwestern research universities. Serra Ventures invests in agriculture-focused technology from Champaign. NVNG Ventures is a general technology firm in Madison. The Idea Fund of La Crosse invests in software and business-to-business technology at the earliest stages.

How a company actually reaches this capital

WEDC sets out the process in four steps and is direct about where the decision sits. A company reads the manager biographies, contacts the manager that fits directly, waits through review, and then negotiates funding. WEDC states that the process from review to funding can take at least six months if a company is chosen.

In return for funding, the venture firm takes an equity stake in the startup and also receives a WEDC-paid annual fee for investing the state's capital. The state's return is reinvested into the fund, which is how the program intends to outlast its federal seed capital.

Two allocation commitments shape where the money goes. WEDC stated that at least $27 million of the state's initial investment is allocated to biohealth, following Wisconsin's designation as a Regional Technology Hub for personalised medicine and biohealth technology. The fund is also targeting significant support for diverse businesses and companies in underserved areas of investment, which WEDC describes as an SSBCI requirement rather than a state preference.

What to settle before approaching a manager

• Which of the five theses the company genuinely fits, since the state does not route companies between managers.
• Whether the manager still holds uncommitted SSBCI capital, given that the allocations were published in 2024.
• Whether a sixth manager was appointed for the remaining $5 million, which WEDC described as under negotiation rather than settled.
• How the manager treats the one-to-one private match at the deal level, which WEDC states at the fund level rather than per investment.
• Whether the Technology Development Fund is the better route, if the need is a loan matched by an equity round rather than an equity investment.