When launching a new business, transforming an idea into a product or service is only half the battle. The other half is having enough money to get the business off the ground.
Many startups need an infusion of capital beyond loans to make their business ideas scalable, which is where venture funding comes in. Whether it’s an angel investor, a venture fund or an investment group, the idea is the same — investing capital in an early-stage business in exchange for a stake in its ownership.
At just over a year old, TitletownTech’s $25 million venture fund has “made the most noise,” but it’s just one organization in the region helping startups, says managing director Jill Enos. The fund, which was initially launched by the Green Bay Packers and Microsoft and has since added other partners, has already made investments in multiple businesses from Green Bay-based Strive MedTech to ChemDirect, which moved from Los Angeles to Green Bay after receiving funding.
When making an investment, Enos says the team assesses how the venture fares in four areas: the founder or team around the founder and their drive to find solutions, the degree to which it’s solving a meaningful problem, growth in the market for the product, and what value staff can add to the startup.
“There are a lot of good ideas out there, but we’re focused on the ones addressing meaningful problems — such as Oculogica’s quick concussion test — that we see are worth putting the time and effort into,” Enos says. “For Oculogica, for example, there’s also a large potential market for an easy, rapid concussion test.”
When the fund invests in a startup, Enos says TitletownTech begins working with the entrepreneur and her team so the business can scale quickly and grow. “We make a lot of introductions to customers, organizations that can test run their product, a potential supplier or anyone else who can assist the business in growing in addition to the infusion of capital,” she says.
If TitletownTech cannot help an entrepreneur, Enos says, “we help them find another door.”
While TitletownTech’s venture fund is the largest in the area, it’s not the only one. Based in Neenah and just a few years old, the Winnebago Seed Fund focuses on seed investments in startup companies in Northeast Wisconsin, while Johnsonville Ventures, the venture capital arm of sausage company Johnsonville LLC in Sheboygan Falls, is more specialized, focusing on tools to help pork producers.
Investor groups and angel investors are another way startups can gain access to capital. Tundra Angels, an investor group launched over the summer as a program of the Greater Green Bay Chamber’s Startup Hub, invites its investors quarterly to listen to three or four startup pitches. The investors can ask questions and gather more information before deciding which startup they want to support. The first pitch event will be held this fall.
“We have a qualified group of investors,” says Matthew Kee, manager of Tundra Angels and the chamber’s startup development manager, adding each investor pays a $1,800 annual fee just to be in the room for the startup pitches.
Startups are already reaching out to Kee, who is well-connected to the area’s entrepreneurial community through his work with the Startup Hub as well as gBETA.
“Our investors are not only providing the capital but will also help provide connections and introduce customers,” he says. “The focus is on startups with high growth potential.”
Tundra Angels is unique since it emerged as an outflow from the Greater Green Bay Chamber’s Economic Development Strategic Plan, Kee says. Entrepreneurship is one pillar of the plan, and a vital part of growing startups is providing capital.
New North, Inc. President and CEO Barb LaMue says startups are essential to growing the region’s economy.
“Every large company we see out there started out as a startup with one or two employees. As they grow, they add more employees, which is a key part of growing a region’s economy,” she says. “That’s one reason it is vital to provide those startups with the support they need to get off the ground and grow.”
It’s not always easy for entrepreneurs to find the resources and contacts they need to be successful, which is why
New North created the NEW Launch Alliance. LaMue says the alliance seeks to provide a way to connect startups with those resources.
“When an entrepreneur starts out, he may not know where to look for capital or help in certain areas. We see the alliance as a way to connect people to each other and to services,” she says.
The NEW Launch Alliance is also in the process of implementing “Start in Wisconsin,” a web-based platform that allows entrepreneurs to look up information about services they may need, LaMue says. “If you’re looking for incubator space, you can type in your ZIP code and you’ll get access to a list of resources,” she says.