Money for Minnows: An Example for Wisconsin
Many States such as the State of Wisconsin lack a venture capital ecosystem relative to states like California and Massachusetts. California and Massachusetts tend to have high new company formation, an aggressive angel investment network and an established venture capital eco system.
In 2005 Wisconsin passed ACT255 that provides state tax incentives to angel investors. In addition the Wisconsin Technology Council, in conjunction with the Wisconsin Angel Network, have increased angel investing in new Wisconsin companies by an order of magnitude. But Wisconsin is in the bottom five states nationwide in new company formation, the bottom third in venture capital investment on a per capita basis and lacks a venture capital eco system. Where there is an “unmet need” there is an opportunity for investment return by meeting that unmet need.
Money for Minnows is an investment strategy that has been employed by Kegonsa Capital Partners in their management of Wisconsin based venture capital funds. Sun Mountain Capital manages the New Mexico state fund of funds that has successfully built a venture capital eco system that now has 29 venture capital funds based in the state of New Mexico.
The projections in this paper are based on actual performance of Wisconsin-based venture capital funds that employ the Money for Minnows investment strategy and the actual results of the New Mexico venture capital eco system.
|Click to download and share a PDF white paper about the Money for Minnows strategy.|
Money for Minnows Fund of Funds Expectations
- Creation of six to ten Wisconsin based venture capital funds
- Match the national average return for the investment segment
- Politically neutral