Wisconsin Startup Coalition: Legislation introduced to attract venture capital investment in Wisconsin startups

Madison, WI – Nov. 10, 2021 – Today Representative Mike Kuglitsch (R-New Berlin) and Senator Dan Feyen (R-Fond du Lac) along with Representative Shannon Zimmerman (R-River Falls) and Representative Robert Wittke (R-Racine) introduced Wisconsin Startup Coalition (WSC) -supported legislation that will reform the Wisconsin Economic Development Corporation’s (WEDC’s) Qualified New Venture Program to incentivize Angel Investors from across the country to invest in Wisconsin headquartered high-growth, job-creating startups. 

Startups are the number one creator of new jobs, but Wisconsin’s startup ecosystem has historically been below peer states in the Midwest for new business formation, venture capital investment, and startup activity.  Since the QNBV program has been successful in incentivizing investment in Wisconsin startups, this common-sense piece of legislation will attract investors residing outside the state of Wisconsin to back local startups.

“Venture capital is the lifeblood of innovation and enables technology startups to grow and scale,” said Lydia Zeller, Chair of the Wisconsin Startup Coalition board of directors and CEO of Kiio, a Madison-based startup.  “The proposed QNBV reforms will attract additional, new Venture Capital investment from Angel Investors residing outside the state helping create new jobs and new wealth here in the State of Wisconsin.” 

“We know that Wisconsin-based technology companies have left the state seeking the investment they have needed to grow and thrive,” said Peter Welch, Co-founder of the Wisconsin Startup Coalition “Our members identified and raised this issue with policy-makers, and are confident that these reforms will enable them to compete for national capital investment while staying headquartered here.”  

Background on the WEDC’s QNBV Program and Proposed Reform

The goal of the QNBV Program is to incent equity investment in technology-based businesses in the state of Wisconsin.  The program provides tax credits to eligible Angel and Venture Fund investors who make cash equity investments in qualified early-stage businesses. If all eligibility requirements are met, investors receive a Wisconsin income tax credit equal to 25 percent of the value of the investment made in the certified company. The investments incentivized through this program provide the capital necessary for emerging growth companies to develop new products and technologies, move products to market and provide high-quality jobs in Wisconsin.

Out-of-state Angel Investors are discouraged from investing in Wisconsin startups because the tax credit incentives are not transferable.  This bill allows out-of-state Angel Investors who invest in a QNBV company to transfer their tax credit to an entity or individual with a Wisconsin tax liability.

About the Wisconsin Startup Coalition

Wisconsin Startup Coalition (WSC) is a bipartisan, member-driven advocacy organization formed to support the state’s startup founders and the innovation ecosystem. Since its inception in late 2020, WSC has gained the support of over 100 Wisconsin startups, funds, and ecosystem organizations who share its vision: doubling the number of startups receiving their first rounds of funding in Wisconsin over the next five years. WSC is proud to be the first advocacy voice dedicated exclusively to representing the diverse voices of Wisconsin startup founders and those who support them.