The state Assembly on Thursday passed a bill that would allow taxpayer money as well as private funds to be invested in startup companies.
The measure passed overwhelmingly on a vote of 91-2.
Under the bill, the Department of Administration would oversee the fund.
It’s Wisconsin’s first foray into venture capitalism. The fund would contain $25 million from the state and at least $50 million in private money.
Republican Rep. John Klenke called the plan a good start.
“Last session we were thinking of borrowing $400 million from the state of Wisconsin to give to a fund of fund. It would have been the most expensive way for us to fund this project. Instead, the governor was wise, put $25 million in cash, it’s a low cost option, it’s a balanced way to begin,” Klenke says.
The bill would invest money in five sectors, including agriculture, engineering and advanced manufacturing.
Democrats introduced an amendment to include bioscience companies. Democratic Rep. Robb Kahl of Monona believes the biotech industry has the greatest potential for job creation.
“We all know somebody who’s been afflicted by muscular dystrophy, any of these diseases like autism or Parkinson’s, we can help these folks by making this investment. This is a good business decision and it’s also the humane and right thing to do,” Kahl says.
Despite Kahl’s argument, the motion failed.
Some have speculated Republicans did not include bioscience because of stem cell research. The author of the bill, Republican Rep. Mike Kuglitsch of New Berlin, says the five sectors that were chosen would produce quicker results.
“With biotechnology, the runway from idea to job averages seven to ten years. These chambers don’t have the patience or the appetite to wait seven to ten years to see any type of results. The five sectors that we picked have anywhere from 12 months to 40 months where it goes from idea to job,” Kuglitsch says.
Both Republicans and Democrats expressed hope the initiative would be expanded further down the road. The measure now goes to the state Senate.