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Investor links East Coast funds to Midwest tech

Madison, Wis. - Jason Smith acknowledges he's on a personal mission. The director of Avolte Venture Fund Midwest, a sector fund of the Peak Ridge Capital Group, wants to bridge the gap between the Midwest and the East Coast venture communities, and his passion for investing in innovative Midwestern technology companies is one of the reasons that bridge may be crossed.

"I wake up in the morning and it is one of the first things I think about," Smith said, "and before I go to bed it's one of the last things I think about. You could ask my wife and she would probably confirm that."

Smith is part of a four-person fund team of financiers that will make two or three $1 million to $3 million investments per year in Midwestern life science and information technology companies.

The fund will be capped at $50 million and likely will be ready for deals in 2007. Smith is prepared to leverage that capital with promising leads and his team's relationships with other venture capitalists, angel networks, and industry professionals.

It is a team, he said, with the commitment, experience, and skill sets to take companies from initial investment and provide syndication opportunities, sales pipelines, collaborations, and exit opportunities.
"Our team is extremely well connected and has the ability to verify information in and outside of Wisconsin that might not be available or as easy to obtain for other individuals," he said.

The team plans to finance growth-stage companies, those that are beyond the seed phase. "That stage of the company is really the make-it-or-break-it phase," Smith said. "We can come into that very important stage in the life of the company and provide opportunities to prevent them from withering on the vine."

Historic enterprise

Smith graduated from the University of Wisconsin-Madison with undergraduate degrees in behavioral science and pre-law. He went on to earn a law degree from the New England School of Law, where he met Mike McNally, CEO of Boston-based Peak Ridge Capital Group.

Smith's work with the 35-attorney firm Stafford Rosenbaum brought him back to Madison, where he later entered the private equity business.

"I left my career as a lawyer because I saw the enormous opportunity in the Midwestern arena to create things, to create opportunity for people, to enhance Wisconsin's status as a leader in industry," Smith explained.

"As I saw it, there wasn't a strong link between Wisconsin and other financial centers located on the coasts," he added. "This area, I think, is rife with opportunity."

Smith, a history buff, said his investments will help continue Wisconsin's entrepreneurial legacy. Over 100 years ago, he said, people were starting timber industries, paper mills, and manufacturing businesses - developing technology that would help Wisconsin's business community.

"With all the wonderful intellectual property that's generated here, I think that we have an opportunity, really, not just to be leaders, but to go almost back to our roots, to become successful leaders and entrepreneurs - again," Smith said.

Moving forward

Smith believes that the state's public and private engagement to create new tech companies is "definitely on the right track." He estimated that the amount of private equity and venture capital investment in Wisconsin has increased fourfold since the passing of Act 255, and he praised efforts of the Wisconsin Technology Council to push such initiatives.

"Act 255 provides an excellent incentive both for individuals and for venture capital funds," he said. "I think that we should continue along that pathway, maybe expanding or increasing the amount of credits available to the private sector, coupled with an increased capital commitment by various public entities, as demonstrated by other states with successful venture capital markets."

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