— Kristine Seymour, a partner with Michael Best Strategies, says startup innovations could be key to fixing what she sees as a broken health care system.
“My experience is, there’s a recognition of people who are in health care, that the way we reimburse and the way the system works is broken and we need to change that,” she said yesterday at the Early Stage Symposium in Madison. “I think digital solutions in health care are one way to do that.”
The annual conference is held by the Wisconsin Technology Council to spotlight and connect startups, researchers, entrepreneurs and investors. Seymour spoke as part of a panel of health care industry experts.
In her remarks, she stressed that startups need to understand and leverage the financial return on investment when pitching their solutions to companies. That can include hospitals and health systems, as well as payers like insurance providers.
“There’s a new ROI, because you’re displacing some practice or service that goes on today,” she said. “Make sure that you’ve thought through, is it saving money for the whole system? And if it’s not, you better have a good reason why it’s still an additional cost that a payer or provider should take on.”
WEA Trust Chief Medical Officer Tim Bartholow agreed the U.S. health system has a cost problem, noting “deductibles are rising in rapid fashion.” Over the next few decades, he says providers, payers and others in the system have “an obligation” to enhance care while driving down related costs.
“I think there’s extraordinary opportunities for us in this sector to think about how it is that we can actually make care better more quickly, and frankly more affordable,” Bartholow said.
In his role as chief business and strategy officer for Gundersen Health System, Bill Farrell said he’s “constantly scanning” for startups that can provide solutions to specific problems as well as system-wide improvements.
— Wisconsin’s investment landscape is restricted by an overall lack of capital, according to a panel of investors.
But they said the higher capital efficiency of investing in the Midwest is drawing the attention of larger coastal funds.
Allos Venture Managing Director David Kerr noted the cost of housing and hiring talent are much lower in the Midwest than the Bay Area or elsewhere, calling it “one of the greatest opportunities” of investing in the region.
“If somebody raises a round, those dollars are going to go much further,” he said yesterday at the Early Stage Symposium.
But at the same time, he said Wisconsin and the surrounding area lacks experienced entrepreneurs that have taken companies past the $100 million mark.
“We don’t have a lot of talent in those areas to go around,” he said.
Another Midwest investor panelist, Laurence Hayward, pushed back on the notion of a talent gap, saying “there’s as much talent here as anywhere.”
Hayward is the founding partner of Independence Equity, an early-stage venture fund, and co-founder of Cornerstone Angels, which has invested in over 60 companies in the past 13 years. He argued the Midwest has no shortage of raw talent, though he acknowledged a gap in experience.
Still, he said “a lot of the most successful entrepreneurs are first-time entrepreneurs.”
Ryan Weber, founder of a Midwest venture fund called Great North Labs, says other fund managers in the region are starting to see more investors from the coasts travel to the Midwest for deals.
“If you were to ask me five or 10 years ago, did you have to leave the Midwest? It was absolutely yes,” Weber said. “Now, I think we’re starting to see that change a little bit.”
— The Winnow Fund, a new woman-led venture capital fund, has raised $3.5 million from other investors led by the Badger Fund of Funds.
The new fund will be run by managing director Richelle Martin, and aims to raise $8 million to invest in early-stage startups or help them launch. According to a release, the fund will look to leverage rising college student interest in entrepreneurship supported by startup initiatives around the state. Investments will be limited to Wisconsin-based ideas and companies.
The Winnow Fund will be the only woman-led venture fund based in the state that’s actively investing in Wisconsin, the release shows. The fund’s strategy will focus on creating companies around “innovative product ideas” from students in the state, rather than technologies from licensing offices. And Martin will look to pre-revenue existing startups as another investment target.
Ken Johnson is the Wisconsin-based partner of the Sun Mountain Kegonsa firm, which manages the Badger Fund of Funds. This state-backed fund received a starting investment of $25 million from the state in 2015, and has since attracted more than $5 million in later funding.
In the release, Johnson says he’s seen a “surprising lack of commitment” to diversifying the VC ecosystem, despite “a lot of corporate brand building and talk around diversity.” He notes the number of female venture partners fell from 14 percent in 1999 to just 6 percent in 2014.
“The Winnow Fund provides Wisconsin with an opportunity to be a national VC ecosystem leader,” Johnson said.
See more on the Winnow Fund: http://winnowfund.com/
— The Wisconsin Alumni Research Foundation’s grant to UW-Madison for 2019-20 includes $2.5 million for the WARF Accelerator Program, which helps develop pre-license technologies with a goal of creating spin-off startup companies.
Overall, WARF is providing $80 million to UW-Madison for the current academic year, as well as $11.9 million to the Morgridge Institute for Research in Madison, for a combined total of $91.9 million.
Of the grant going directly to the university, $12 million will support faculty recruitment and retention efforts. About $11.5 million is going to graduate students programs, and $2.5 million is going to faculty fellowships.
The UW2020 WARF Discovery Initiative is getting $9.5 million in funding, supporting forward-thinking research projects at UW-Madison. A further $10.9 million will go toward the Fall Research Competition, which receives hundreds of research proposals each year.
“The product of UW-Madison research touches our families and jobs here in Wisconsin and keeps the state competitive globally,” said WARF CEO Erik Iverson. “The annual grant is one way that WARF supports this work from the ground up, by investing in the bold ideas that lead to discovery, and upholding the promise of a great public research university.”
See a breakdown of funded initiatives: http://www.warf.org/media/NewsGraphics/Releases/2019-20-%20A%20Guide%20to%20WARF%20Support%20for%20UW-Madison_11.1.19.pdf
— An Assembly panel heard testimony on a bipartisan bill that backers say would help stem the rise in teenage vaping by raising the age to buy tobacco and nicotine vapor products from 18 to 21.
Bill co-author Rep. John Spiros, R-Marshfield, touted the measure as a first step to address “the demonstrated public health crisis caused by the rampant use of vapor products by our youth.”
“This problem isn’t going away on its own,” he said yesterday, noting 18 other states have already passed similar legislation.
But the measure faced skepticism from lawmakers on both sides of the aisle.
Rep. John Nygren said raising the age would be “a very difficult threshold.” While he acknowledges research showing cognitive development takes place until a person reaches their mid-twenties, the Marinette Republican noted 18-year-olds can vote and join the military.
“Should we be talking about taking away the right to vote ’til 21, because the brain isn’t developed?” asked the co-chair of the Joint Finance Committee.
Spiros fired back that he didn’t think comparing voting to using tobacco or nicotine products was a “fair analysis.”
The measure also came under scrutiny from Rep. Jill Billings, who said while she appreciated the intent of the bill, she saw it as putting “the onus on consumers.” The La Crosse Dem slammed vaping companies for marketing tactics that are “predatory toward our children,” including designing discreet vapes and developing flavors such as pina colada and cotton candy.
— The second annual Workforce Solutions Summit in Eau Claire will be held Nov. 13 at the Pablo Center at the Confluence.
The event is aimed at Eau Claire-area employers, focusing on methods to solve short- and long-term workforce challenges.
Speakers will highlight specific strategies and trends surrounding labor issues. And a number of breakout workshops will go deeper on certain topics including talent retention, working with students, recruiting diverse workers and more.
See more event details and register here: http://eauclairewicoc.wliinc25.com/events/Workforce-Solutions-Summit-17697/details
# USA Fencing event bringing 2,200 athletes – and $2.4M impact – to Milwaukee
# Wisconsin bill seeks to stop anyone under 21 from vaping, smoking
# Milwaukee County DA: Illegal vaping products an ’emerging concern’ for law enforcement
# Wisconsin school choice advocates sue education department for timing of test score release
– State cheese production up for second time in 2019
– Associated Bank buys its branch at The Corridor in Brookfield
– UWM receives $10 million gift for new Great Lakes research vessel
– Voucher group sues over test score release in Wisconsin
# HEALTH CARE
– Supporters push Wisconsin bill to raise legal smoking age as means to curb vaping in schools
– Acuity to hire 100 employees in 2020
– See the new middleweight bikes Harley-Davidson is introducing in 2020, the Pan America and Bronx
– Lawmakers increase criticism of ‘Opportunity Zone’ tax break
– Wisconsin considers raising minimum age to buy tobacco products to 21
– Assembly panel considers mandatory cursive bill
# REAL ESTATE
– Six-story office advancing near I-94 in Brookfield
– Senate approves bill that would end Miller Park tax
– See photos: Drury is downtown Milwaukee’s newest hotel
– Drury Hotels open first Wisconsin location in Milwaukee’s downtown
– Jim Hightower: Trump to small farmers: Get lost
# PRESS RELEASES
<i>See these and other press releases: