Assemblyman Wants State-Run Venture Capital Investment Fund

A bipartisan group of lawmakers has introduced a plan that would set up a state-run venture capital fund.

The bill introduced today by Rep. Mike Kuglitsch (R-New Berlin) lays the groundwork for a fund that is paid for by $25 million in the state budget. Kuglitsch says the biggest hurdle for a young entrepreneur to overcome is capital: “So it only makes sense that an economic development strategy for a state should include investment capital.”

At least a few Democrats support the bill, including Rep. Fred Clark (D-Baraboo), who says the two parties do not agree on much these days:

“So when a solid proposal that promises to create jobs has been developed by a legislator of any party, it’s time for us to step up to the plate.”

The fund would be run by a manager picked by the State of Wisconsin Investment Board. It would require $2 in private investments for every $1 invested by the state. All investors – the state included – would share in the risks and rewards, meaning that if companies do well the fund could grow. When investments fail, the fund could shrink.

Sen. Julie Lassa (D-Stevens Point) supports the idea of a fund, but says that without a bigger up-front investment this fund could fail:

“Because the money wasn’t deployed fast enough, that we weren’t able to create in the private sector jobs fast enough, that the legislature will walk away.”

Lassa and Assembly Minority Leader Peter Barca (D-Kenosha) say they will push for a larger fund that could be paid for by tax dollars, bonding or some combination of both.