14 Aug Investor symposium seeks to build momentum for the “IQ Corridor”
River Falls, Wis. – When investors get together, stuff happens.
Those are the words of Joe Kremer, director of the Wisconsin Angel Network, and in a nutshell they describe the motivation behind an event that organizers hope will be another step in building a regional brand called the “I-Q” Corridor.
The event, the I-Q Corridor Investors’ Symposium, will be a gathering of academicians, state officials, and investors on Wednesday, Oct. 3, at the University Center on the University of Wisconsin-River Falls campus.
The IQ Corridor is the concept of a robust, knowledge-based economy extending from metropolitan Chicago, through Milwaukee and Madison, to the Twin Cities – generally, along Interstates 94 and 90.
To be a thriving part of such a regional economic powerhouse, economists say Wisconsin will have to leverage its assets through collaboration and finds ways to attract more angel and venture capital to accommodate technology transfer from universities to the commercial sector.
The I-Q Corridor Investors’ Symposium is an attempt to accomplish a bit of both. Mixed amid a business plan contest between Wisconsin and Minnesota companies, and programs on the regional economy, will be an investment focus and a showcase of start-up companies and technology from both states.
One goal is to foster collaboration and relationship building between Wisconsin and Minnesota, especially early-stage investors.
“The [investment] game is all about relationships,” said Kremer, whose Wisconsin Angel Network is coordinating the symposium along with the Wisconsin Technology Council.
Deal sharing
Kremer knows from past experience that when investors get together, they tend to share information about deals they like, or share deals together.
Through a similar program, the Wisconsin Angel Network already has introduced investors from Wisconsin and Chicago.
An example of the kinds of collaboration that occurs between investors in Wisconsin and Illinois is Rosetta Partners, a Lake Forest investment management firm that has joined with Wisconsin investment firms to finance the likes of Mithridion, a Madison biopharmaceutical start up that is developing drugs to disrupt the progress of Alzheimer’s disease.
Rosetta Partners joined the Madison-based Venture Investors in a $1.2 million round for Mithridion, and late last year it led a $3.3 million round for ConjuGon, teaming with Wisconsin Investment Partners, an angel investment group. The investment in ConjuGon, another Madison biopharmaceutical company, will be used for clinical trials that will test a treatment for infections in large wounds.
Tech transfer
Another goal of the symposium is to establish additional links between Twin Cities investors and the western Wisconsin economy.
In addition to the Wisconsin Angel Network, those in attendance will include representatives of the the UW Board of Regents, the Wisconsin Department of Financial Institutions, and the St. Croix Valley Angels, an angel investment network that promotes business development and job creation in the St. Croix River Valley.
Minnesota will be represented by its High Tech Association, the Twin Cities Angels, and the University of Minnesota Center for Entrepreneurial Studies, among others.
John Alexander, co-founder and chairman of the Twin Cities Angels, said any program is worthwhile if it brings together people and capital in a way that allows them to leverage their expertise and resources, especially since there now are fewer investment firms available to help get promising companies off the ground.
“An early-stage company has got a number of issues, capital being one of them,” Alexander said. “There has been a reduction in the number of both formal venture firms and angels that invest in early-stage companies over the last 15 years, so networking angel groups together allows us all to leverage what we’re doing and do it smarter.”
Part of the symposium will center on how investors can tap into the university systems of the two states, and how they can work with technology transfer teams to reach university spin outs that are either ready to start up or already have.
While the University of Wisconsin System ranks in the top 10 of university systems worldwide in biotechnology patents, it’s not quite that successful in transferring technology for commercial uses. The disconnect was illustrated by a Milken Institute study of 500 universities worldwide that ranked the UW System 22nd – behind Big Ten rivals like Minnesota, Michigan, and Illinois – in terms of technology transfer.
John Neis, co-founder and managing director of Venture Investors, isn’t sure how valuable the symposium will be for technology transfer, but he has no doubt about the importance of bringing together investors.
Venture Investors, which has raised $115 million in a new investment fund, has participated in a similar program of the Mid-American Healthcare Investors Network. Anytime investors come together, Neis said, the talk usually turns to deal flow and information sharing.
“As for technology transfer, that’s hard to judge,” Neis said. “The bottom line is that the more investors are exposed to early-stage opportunities, the greater the critical mass and the better off we’ll be.
“It’s one piece to a very complicated puzzle. You need a continuum of financing from start to finish.”
Screen play
According to Steven DeWald, director of the Small Business Development Center at UW-River Falls, the symposium could give angel investments groups some insight into how other angel groups operate.
DeWald serves as a screener for the St. Croix Valley Angels. As a screener, DeWald is the first person companies seeking angel money would meet before presenting to members of the angel group. Among the things he evaluates is whether their business plans make sense, how far along they are in their development, and the point at which they want to exit (for angels, it’s usually 5 to 7 years).
“The value of this event is the networking between the angel investors,” DeWald said,” “but we also find out what they are doing, how they are screening, and the sources of funds for their potential investees.”
Pat Dillon, the northwest regional director for the Wisconsin Entrepreneur’s Network, lived and worked in Minnesota for 12 years before coming to Wisconsin. To her, the symposium represents a golden opportunity for entrepreneurs in both states to gain exposure to key investors, and begin to build mutually beneficial business relationships.
“I like to think the (St. Croix) river connects us rather than separates us,” Dillon said. “I really think this is the right thing to do because we have to take the first step and set the stage for future opportunities.”
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