Legislature Approves Venture Capital Fund
A venture capital bill is on its way to Gov. Scott Walker’s desk.
The measure easily passed in the Legislature on Tuesday. Some lawmakers voted for it, saying the bill is not perfect – but it’s a start.
The bill would create a $25 million taxpayer investment in a fund of funds, which would be used to help entrepreneurs get ventures off the ground. The fund also would include $50 million in private investments.
Some of the criticism of the proposal centered around an argument that the pot of money would be too small to make a big difference. Democratic Sen. Julie Lassa of Stevens Point says it would put Wisconsin at a competitive disadvantage.
“Michigan has invested $450 million in its Venture Michigan fund, Ohio started its Third Frontier fund with $473 million and recently invested another $700 million in the program. Even Iowa’s fund of funds was started with an initial investment of $100 million,” Lassa said.
Others discussing concerns included Democratic Sen. John Lehman of Racine. He says the bill would be stronger if it allowed biotech companies to be included. The money will be earmarked for companies in several fields, including agriculture, information technology and advanced manufacturing. Lehman and other Democrats accuse Republicans of excluding biotech, because of concerns over embryonic stem cell research.
“It certainly is not industry-neutral, in the way that it should be, it still involves Wisconsin Right to Life politics,” Lehman said.
Republicans say they left biotech firms out, because they wanted to focus on industries that can return investments quickly.
Meanwhile, Democrats also complained that there’s no guarantee the bill would result in the lawmakers’ number one goal: job creation. They attempted – but failed – to tie venture capital investments to the potential for creating new jobs.
Fond du Lac Republican Sen. Richard Gudex said the bipartisan proposal warranted support, even if it’s not ideal.
“This is a bill that a lot of people on both sides of the aisle have walked through and nurtured, this is something that’s been a dream of a lot of people for four years and it’s almost here as a reality, and to walk away from it and say that we’re not going to support this, I think is short-sighted,” Gudex said.
River Hills Republican Sen. Alberta Darling argued that ideally, the fund of funds would include more money. But she says what lawmakers support now, is not the final word on the program. Additional funds could be added later. And Darling argued Wisconsin badly needs venture capital. She cited a report that came out Tuesday. It indicated the state’s economy is based on old manufacturing traditions – not new areas of growth.
“We rank very high in ideas in the state, but we rank very low when it comes to transferring these ideas into the commercial marketplace. We do very poorly at supporting entrepreneurs and small business,” Darling said.
The bill now is on its way to Gov. Walker’s desk. He’s expected to sign it. Walker proposed the taxpayer funding for the program in his state budget, but left it to lawmakers to work out the details.