Archives from month » July, 2010

Time for Wisconsin to Invest in Innovation

Wisconsin’s CAPCO program has been one of the many ideas for economic growth within the state:

The Wisconsin Technology Council will publish a new set of white papers this month including bold ideas to stimulate venture capital investment in the state.

Inevitably, some may question Wisconsin’s ability to afford these proposed programs. But the better question is whether we can afford not to pursue new ideas as we try to transform the economy.

We have no shortage of innovations. We have one of the world’s greatest research universities, one that became increasingly entrepreneurial in the 1990s. The Wisconsin Alumni Research Foundation began accepting equity in lieu of upfront fees for University of Wisconsin-Madison spinoffs at that time and began investing directly near the end of the decade. Initiatives such as the Burrill Business Plan Competition helped to create a more entrepreneurial culture.

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Houston Firm Cracks CAPCO Club

Dennis Murphree of Murphree Venture Partners in Texas participated in the state’s CAPCO Program in 2002:

Venture capitalist Dennis Murphree has joined a small band of fund managers in the country who participate in a little-known but rapidly expanding program called CAPCO.

A handful of states have passed legislation to create programs called CAPCO, an acronym for certified capital companies. These programs spawn investment funds, some as large as $175 million, that are designed to spur economic development.

The program itself is complicated, but it wasn’t difficult for Murphree and his partners to decide they wanted to be involved.

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Wisconsin CAPCO Program Overwhelmingly Successful

A report discussing the success of Wisconsin’s CAPCO Program was recently released by a professor at the University of Wisconsin-Madison:

The National Coalition for Capital, a non-profit nationwide coalition of supporters of public policies that promote access to capital for small businesses, today announced the release of a report detailing the success of the Wisconsin Certified Capital Companies (CAPCO) program. This program encourages the flow of investment capital to promising companies located in the state, creating and preserving good jobs, and generating significant state tax revenue.

In the newly issued report, Professor Donald A. Nichols of the University of Wisconsin-Madison conducts an analysis of the Wisconsin program, which was enacted in 1998.

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Defunct Investment Program for Fledgling Firms Paid Off in Big Way

Wisconsin’s CAPCO program expired in 2009, but it provided excellent job growth:

A program that used state tax credits to invest in promising Wisconsin technology businesses has paid for itself several times over, according to a study by Donald Nichols, UW-Madison emeritus professor of economics and public affairs.

TomoTherapy, Virent Energy Systems, Alfalight and Cellectar are among the Madison companies boosted by the program, called Wisconsin Certified Capital Companies, or CAPCOs.

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