Technology council to coordinate angel investors

Madison, Wis. — State agencies have backed a new organization, the Wisconsin Angel Network, which would connect private investors with early-stage companies.

“Wisconsin excels in researching and developing cutting-edge technology ... but we need more capital investment in the first and most critical stage,” said Governor Jim Doyle, who announced the network’s formation on Tuesday.

The Wisconsin Technology Council, which advises the governor and Legistature on technology, would house the network and be its umbrella organization. Secretary Lorrie Heinemann of the Department of Financial Institutions said that the state would provide support but keep out of managing investments.

“Our goal is to help [investors] make connections ... and do their own due diligence,” she said. “The government agencies are not going to be involved in the deal flow.”

The network’s membership will be accredited angel investors, she said, and one of its primary functions would be connecting them with each other and with entrepreneurs. “You just don’t have a lot of time to do networking” as an investor, said David Ward, president of NorthStar Economics, a Madison-based consulting firm. “You need this glue.”

The network would not be for every investor. In keeping with its role as a service provider, Tom Still, president of the Technology Council, said the network would not be able to direct angels, only help those who were looking for connections or resources.

“I don’t even know if we can get half,” said Still, who would consider attracting a notable percentage of angel investors in the state a success.

Ward said those most likely to be attracted to the network are people who do not feel connected to the investment community or already have a desire to network. Others would rather stay independent.

The sense of independence shared by many angel investors means much of their activity goes unrecorded. Still said that in 2002, the latest year for which the network has compiled data, less than $2 million in angel investment was recorded in Wisconsin. About ten times as much could have changed hands privately, he estimated.

The angel network’s organizers don’t yet know whether investors will pay for membership, though it is being discussed. Initial money has come from the Department of Commerce, the Department of Financial Institutions, the council itself and a $20,000 grant from SBC Communications that will go mostly toward a Web site and other communications materials.

Still said the network has enough funding already to pursue its initial plan for about two years, and that other private entities could step forward to help. Much of its work could be referrals. For example, though the focus of Still’s organization is technology, it could connect investors interested in non-technology companies to external resources.

Joe Kremer, a consultant and entreprenur who has also worked as a legislative advisor and has a UW-Madison MBA, has been tapped as the network's director and would be an employee of the Wisconsin Technology Council.

The network will work closely with the state’s angel advisors, a panel of seven including Still, Heinemann, and Ward, as well as Jamie Wall of the Department of Commerce, Tim Keane of the Golden Angels Network, Dick Leazer of Wisconsin Investment Partners, and James Hanke of the Chippewa Valley Angel Investors Network.

WAN would work with another recently established state network, the Wisconsin Entrepreneurs’ Network, to spread knowledge about angel investing. Doyle announced the entrepreneurs’ network late last November.