Below is an excerpt from the most recent edition of WisBusiness Tuesday Trends.
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RISING
Angel investing: Investors pumped $163 million into 74 Wisconsin startups in 2012, a 7 percent increase over the 2011 total of $152 million, according to the latest annual report from the Wisconsin Angel Network. The startup study — compiled from interviews with companies and investors, SEC filings, state reports and other public records — tabbed the largest investment at $20 million, while some were as small as $50,000. The investments included money from both venture capital groups and deep-pocket angels, and showed increased funding from “follow-on” investors who put money into a startup and then back that up with more of their own dollars. Another highlight was the discovery of opportunities in Wisconsin by out-of-state and even foreign investors — new WAN head Dan Blake said almost half of the 74 companies included in the latest report involved groups from outside the U.S., including Spain, the Netherlands and China. Blake called the $163 million investment a “strong figure,” though Wisconsin lagged behind most of its peer states in the Midwest. A panel at a recent Wisconsin Innovation Network luncheon said that could change if lawmakers pass a venture capital proposal into law. Overall, the Great Lakes region — Wisconsin included — came in third behind the east and west coasts in early stage investing.
MIXED
State building projects: The budget-writing Joint Finance Committee OKs a plan from the Walker administration to construct a new headquarters for the state Department of Transportation at a cost of nearly $200 million. But a slew of additional state project spending takes a hit in the waning sessions of the budget committee. Along with the DOT project, JFC members vote to direct the State Building Commission to reduce bonding by $250 million. Republicans have expressed concerns with the bonding level since Gov. Walker proposed the budget, but Sen. Jennifer Shilling, D-La Crosse, counters that lawmakers should be taking advantage of low interest rates to bolster construction jobs for state projects. The panel also backs a series of recommended reductions to highway projects to stave off a shortfall in the state’s transportation fund. In addition, the committee approves a plan from the governor to give the state the power to sell or lease a host of properties, though it added committee oversight to any such deals.
FALLING
Unemployment Insurance Advisory Council: Republicans have long chafed at the pace of action by the council, split evenly between labor and management, especially since the GOP has been in charge of just about everything in state government the last few years. And recent Joint Finance Committee actions indicate Republicans are ready to go around the council’s traditional role in crafting changes to the state’s unemployment program. For years, the Legislature has relied on the council to consider unemployment changes and roll its recommendations into legislation for quick passage — something backers say has fostered harmony and a measured approach to changes. Critics, however, contend the council acted timidly in the face of a mounting deficit in the unemployment fund due to the economic downturn — and that lawmakers can’t have their hands tied in times when bold action is needed. That’s part of the justification from JFC Republicans as they make more than half a dozen changes to the program that would reduce payments to the unemployed in the next biennium by $37.2 million, while increasing taxes on employers by $17.2 million in 2014-15 and then $32 million thereafter. But businesses would also see reduced interest payments to the federal government of $19 million in 2013-14 and $7 million in 2014-15. Dems protest that the changes would hurt those who are looking for work while slamming the construction and manufacturing industries at a time when they are just getting back on their feet. Republicans counter those who play by the rules would still qualify for payments while justifying the higher taxes by saying small businesses now subsidize larger companies that frequently lay off their workers. Other changes are making their way through the Legislature, and some see it all adding up to a diminished role for the UIAC.
