Data shows Wisconsin making progress in attracting venture capital

Last year was a milestone in the U.S. for venture capital (VC) funds, which topped $100 billion for the first time ever. That’s according to the National Venture Capital Association’s latest report on VC activity…


Last year was a milestone in the U.S. for venture capital (VC) funds, which topped $100 billion for the first time ever. That’s according to the National Venture Capital Association’s latest report on VC activity across the country in 2021.

On the heels of several years of strong VC fundraising, assets under management (AUM) for the U.S. VC industry reached $995 billion at the end of 2021.

Wisconsin angel and venture capital firms also saw a sizable jump in their amount of assets under management in 2021. The state had $2.15 billion in AUM in 2021, a jump from $1.27 billion in 2020.

Tom Still, president of the Wisconsin Technology Council, said the organization also puts out a yearly VC activity report and that they are deep into their research for 2021.

The organization has so far uncovered 119 angel and venture debt deals that took place in Wisconsin in 2021.

“The impressive thing was the dollar amounts in those deals. Collectively, thus far, $852.4 million (was invested). That was a record by $368 million over the previous year,” Still said. “2020 had also been a record over 2019, so the trend line there is very good. It doesn’t mean that 2022 will continue to be as positive, but it should continue to be a good year.”

Tom Still

Still said there were a few big deals in Wisconsin during 2021 that led the way to the $852.4 million grand total for the state, which is a good thing because that means companies are maturing. There were still several deals within the $1 million and below range as well.

“Some of these companies are maturing and attracting the big dollars, like Shine (Medical) and Fetch (Rewards), but we’re still getting a pipeline of emerging deals. We certainly feel good about that,” Still said.

While this data does reveal some positive news for Wisconsin, the state is still quite a way behind other Midwest states of similar size and population. Still pointed to Minnesota, a state he said has been hovering around $1.3 billion worth of VC investments the last three years. Minnesota also saw two times the number of deals Wisconsin did in 2021.

One other key stat from the WTC shows at least 90 out-of-state investors put some amount of money into Wisconsin in 2021, an increase from 55 out-of-state investors in 2020.

“The word is slowly but surely getting out that Wisconsin has the kind of early-stage deals that can be attractive to money from anywhere,” Still said.

National Venture Capital Association’s 2021 report also shows there were 25 companies in Wisconsin that received VC funding and 29 Wisconsin venture firms were actively raising money.

This shows Wisconsin is slowly catching up with other states in garnering funding for startups, an ongoing issue highlighted in a recent Wisconsin Policy Forum report.

That report showed that despite having a sizable pool of workers in industries typically associated with innovation, such as scientists and engineers, the Milwaukee area continues to fall behind its peers in attracting the venture capital investments needed to support local startups.

Matt Cordio, Skills Pipeline owner and Wisconsin Startup Coalition co-founder, said while it is good the state saw increases to the amount of VC invested and assets under management, this trend is not unique to Wisconsin. Almost all states saw a record increase in 2021 when it comes to total VC invested, which Cordio attributes to a low interest rate environment.

Matt Cordio
Matt Cordio

“Is the eco-system here in Wisconsin growing? Yes, and that’s positive. Are we at parity with other states in the Great Lakes region? No, we still lag,” Cordio said. “If we go out west to Utah, which is a smaller state with 2 million fewer residents, they saw five times the amount of capital in their state’s startups.”

He added that seeing an AUM increase in Wisconsin is good to a certain point.

“Just because we’re growing assets under management by VC funds here in Wisconsin, doesn’t necessarily mean we’re going to see a rapid increase in funding events. It’s really based off if there are entrepreneurs in Wisconsin building scalable ideas,” Cordio said.

Joe Peterangelo, senior researcher with the Wisconsin Policy Forum, agreed with Still in his opinion that it is still too soon to tell whether or not 2021 was an anomaly for the state.

“Seeing such a big jump in 2021 (total VC investment numbers) is definitely a positive thing. The numbers can be pretty volatile so that’s one thing to keep in mind. Any one year could have one big deal happen which makes it just a blip, so it’s hard to know how big of a deal this is until we see more years of data,” Peterangelo said.

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