This week’s episode of “WisBusiness: the Podcast” is with returning guest Laura Strong, founder and CEO of Valency Fund in Madison.
She discusses the path ahead for the nonprofit fund, which she launched earlier this year to help fund early growth-stage companies in Wisconsin that aren’t a good fit for a traditional bank loan or equity investment.
“The vision behind Valency Fund comes from my work with small companies over the last 25 years here in the Madison and general Wisconsin ecosystem,” she said. “And what I came to believe was that there was a gap in funding.”
Strong says Wisconsin has plenty of sustainable companies that have a history of growing from a small operation, adding she wants to help fund “the next generation” of scalable companies that are primed for further growth.
The podcast explores how Valency Fund’s approach differs from other investment funds, striking a balance between the more low-risk, low-reward bank loan option and the higher-risk, high-reward venture capital model.
“We sit kind of in the middle of that risk and reward benefit spectrum, so we’re using different financial instruments,” she said. “We think about things like revenue-based financing … so you’re really looking for a company that is growing, where the capital can really increase their revenue growth so you as an investor can get paid back.”
With that in mind, Valency Fund is looking for companies with “some signal from the marketplace” that their product will be successful, in hopes of propelling that momentum. It made its first investment this summer in Pythonic, a Madison-area company developing AI for finance applications.
Valency Fund aims to write checks from $100,000 to $500,000, Strong said.
“Right now, we’re looking for our next investments … Valency Fund has a focus on technology, agribusiness and advanced manufacturing, all within the state of Wisconsin,” she said, adding “we have got a lot of demand and we’re really excited about the companies that we’re seeing.”
Listen to the podcast below, sponsored by UW-Madison. And see more on Valency Fund here.
Check out an earlier podcast with Strong here.
