By Jason Smathers
Gov. Scott Walker today proposed a $100 million compromise for a new venture capital program and halted further meetings of the working group he put together to craft a bill, even as some members say there are more details to work out.
The proposed venture capital fund would create a “fund-of-funds,” which is designed to raise capital to be invested along with other venture capital funds. It would be funded by $100 million in bonding backed by non-refundable tax credits and would set aside $5 million to be used solely for co-investments in “angel networks.”
The investments would be overseen by a nine-person board appointed by the governor and Legislature. All money must be invested in Wisconsin businesses.
Walker said in a statement that while he appreciated the working group’s attempt to create a bill, the compromise is the right step forward for the time being.
“I remain open to continued discussions and ideas from legislators of both parties, but I believe we should move legislation forward now on the areas where we agree,” Walker said.
Noticeably absent from Walker’s proposal is any reference to the plan laid out by Assembly Republicans to include a leveraged tax credit model. Working group chair Mark Bugher said the venture capital proposal attempted to incorporate only the points of agreement between all parties, noting that the Assembly Republican proposal was not necessarily in that category.
“I think the Assembly Republicans get credit for trying to push the ball down the field, by and large, but while there is support in the Assembly, there is not universal support for that idea,” Bugher said.
Working group member Sen. Julie Lassa, D-Madison, urged caution moving forward, saying in a statement that there are still more details to be worked out. She also said the bill needed to be considered in the context of access to “capital for small businesses and our need to train workers for highly-skilled jobs.”
“I understand the pressures to pass a venture capital bill quickly; however, we’re talking about investing millions of taxpayer dollars,” Lassa said. “Crafting a proposal that will successfully foster job growth in Wisconsin while protecting the interests of taxpayers is a complex process, and it’s important that we get it right. The past failure of CAPCO in Wisconsin demonstrates what can happen when the legislature doesn’t do it correctly.”
Sen. Alberta Darling, R-River Hills, said that the working group had been planning to expand its scope to those areas before it was halted.
Darling said she, Lassa and others were in the process of drafting the bill. While she said she supports the compromise, she noted that other legislators will continue discussing the bill to find something “a little bit broader.”
Darling also said she believes that the bill won’t be ready in time for the fall session unless there is an effort to extend the session for the venture capital bill.