Venture Capital in Wisconsin – There Is Good News

This post started as an email to a group of friends who encouraged me to post the data, which I was prepared to ignore since I had something else in mind for this week. Then I read a post by Bruce Booth from Atlas Venture about the early stage biotech funding environment reflecting optimism that is being overshadowed by gloomy headlines and felt perhaps I should share.

There has been a lot of noise over the last few days as PricewaterhouseCoopers and the National Venture Capital Association released the venture capital (VC) investment numbers for 2011. Overall, the numbers are positive: $28.4 billion was invested across 3,673 deals, which is an increase of 22 percent in dollars and a 4 percent rise in deals over 2010. If you were reading this news in Wisconsin, you were much more likely to read about a decrease in VC dollars flowing to the state, from $112 in 2010 to $72M last year (here and here).

My first thought wasn’t that the sky is falling in Wisconsin – it was that the VC investment in Wisconsin in 2010 was probably an outlier. The 2010 story was stuck in my mind because I wrote a post about the need to distinguish between private equity and VC.

Two of the 2010 investments account for $87M of the $112M and involved a lot of individual and corporate partner dollars. Backing out these two investments leaves $25M of VC invested in WI in 2010. Looking back to 2009, only $23.9M of VC flowed to the state, a near all time low. Based on the graph below, the $72M in VC in 2011 is probably a victory – putting Wisconsin back to pre-2007 territory.

(The VC investment data comes from Thomson Reuters and is provided on the PWC website going back to 1995. The graphs here are all based on those spreadsheets.)

Now you might wonder (as I did), that last statement is true – is the uptick from $23.9M in 2009 to $72M in 2011 representative of the national VC investment environment?  A large caution in looking at the next graph is that there is a massive difference in scale between the primary y axis (VC investments) and secondary y axis (Wisconsin VC investments). With that out of the way, the national trend appears to generally be mirrored in the Wisconsin experience.


Since my day job is in biotechnology, I felt compelled to break out the data for that sector. (Biotechnology and medical devices are separate categories.) Again, note the difference in scales of the two y axes. Other than potentially being on an upswing after the low of 2009, I don’t think the numbers lend themselves to much further analysis.


Wisconsin doesn’t get a significant share of VC dollars and that is often the source of angst for folks wanting to build and scale businesses here. While we need to continue to pursue a variety of approaches to gain greater access to capital to grow our businesses in Wisconsin, we shouldn’t sell the state short on what appears to be a victory, although somewhat bittersweet.



  1. What do quarterly VC numbers tell us? | The Next Element - April 23, 2012

    […] Using the same approach as above, I compiled the Wisconsin data. I’ve suggested previously there are perils in looking at annual VC data when the numbers are small and I think the WI quarterly data emphasizes that point. Since the start of 2002, VC investment in […]

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