20187 WISCONSIN PORTFOLIO 10 YEARS OF TRACKING WISCONSIN INVESTMENT DATA TECH COUNCIL INVESTOR NETWORKS MA>PBL<HGLBG THE WISCONSIN PORTFOLIO PUTTING RISK CAPITAL TO WORK SUMMER 2009 PORTFOLIO PUTTING RISK CAPITAL TO WORK e WisconsinPutting risk Portfolio capital to work FALL 2008 SUMMER 2010 PRODUCED BY PRODUCED BY Wisconsin PRODUCED BY Technology Council WISCONSIN INVESTMENTS T H E 2 014 W I S C O N S I N ON THE RISE PORTFOLIO PUTTING RISK CAPITAL TO WORK WISCONSIN FUELING WISCONSIN PORTFOLIO 2012 THROUGH INVESTMENT Assets Viewpoints Case Studies Success Stories PRODUCED BY Wisconsin Wisconsin Technology Angel Council Network PUTTING RISK CAPITAL TO WORK PUTTING RISK CAPITAL TO WORK Srini Kalluri, Forte Jim Tretheway, BioIonix Research Systems Amelia Baxter, WholeTrees Kurt Brenkus, Aver Informatics The New New Funds / Data Analysis Crowdfunding: WISCONSIN PORTFOLIO 2013 Venture Investor by Sector & Kick-starting WISCONSIN ANGEL Economy 1SPmMFT Survey the Process NETWORK Assets Success Stories Viewpoints 1SPmMFT 2 0 1 5 2017 WISCONSIN PORTFOLIO WISCONSIN PORTFOLIO WISCONSIN PORTFOLIO P UTTING R I SK C APITAL TO WORK A PUBLICATION OF THE WISCONSIN TECHNOLOGY COUNCIL A PUBLICATION OF THE WISCONSIN TECHNOLOGY COUNCIL Wisconsin Technology Wisconsin Council Technology Council TECH COUNCIL INVESTOR NETWORKS + + 10.9% PEOPLE IDEAS MONEY 1.6% TARGETING 10.9% EARLY STAGE 10.9% SUCCESS = NEW COMPAN IES 27.3% 3.1% IT JOE SCANLIN KERRY FRANK BRIAN JENSEN LIZ EVERSOLL SCANALYTICS COMPLY365 FISHIDY SOLOMO TECHNOLOGY HEALTHCARE TARGETING BIOTECH EARLY STAGE MAKING THE CASE AGRICULTURE SUCCESS 35.2% OTHER Produced by: MAKING THE CASE FOR A CORPORATE CONSUMER/ FOR A CORPORATE BUSINESS PRODUCTS “FUND OF FUNDS” Wisconsin ADV MATERIALS & Technology MANUFACTURING “FUND OF FUNDS” Council University Research Park is Where a neighborhood of ideas, entrepreneurship, and Wisconsin opportunity, positively IDEAS impacting Wisconsin Flourish and beyond. Contact us today to learn how URP can help start up Talented, innovative community actively YOUR engaged in Wisconsin’s Wisconsin entrepreneurial movement. IDEA! urpat1403.com universityresearchpark.org • [email protected] (608) 441-8000 A network of highly qualified mentors, working to guide emerging entrepreneurs to business success. Professional work environment that fosters merlinmentors.org a vibrant community of innovative thinkers. madworkscoworking.org 20187 WISCONSIN PORTFOLIO 10 YEARS OF TRACKING WISCONSIN INVESTMENT DATA TECH COUNCIL INVESTOR NETWORKS 2018 WISCONSIN MA>PBL<HGLBG THE WISCONSIN PORTFOLIO PORTFOLIO PUTTING RISK CAPITAL TO WORK SUMMER 2009 PORTFOLIO PUTTING RISK CAPITAL TO WORK e WisconsinPutting risk Portfolio capital to work FALL 2008 INTRODUCTION page 2 THANKS EXECUTIVE SUMMARY Thanks to the sponsors and supporters of SUMMER 2010 page 4 the Wisconsin Portfolio: THE VENTURE ECONOMY PRODUCED BY page 6 PRODUCED BY INSIDE FRONT COVER Wisconsin PRODUCED BY Technology Council LEGISLATIVE UPDATE University Research Park page 8 3 AT&T TECH COUNCIL INVESTOR NETWORKS 11 Baird capital page 12 WISCONSIN INVESTMENTS 21 ATC T H E 2 014 W I S C O N S I N PORTFOLIO ACT 255 22 BDO ON THE RISE page 13 SWIB PUTTING RISK CAPITAL TO WORK 23 FUELING FULL YEAR 2017 DEALS WISCONSIN American Family Insurance page 14 WISCONSIN PORTFOLIO25 2012 Husch Blackwell THROUGH INVESTMENT FULL YEAR 2017 ANALYSIS 26 Capital Midwest Fund page 16 Assets Viewpoints Case Studies Success Stories Wisconsin Economic PRODUCED BY Wisconsin Wisconsin Technology Angel INVESTOR SPOTLIGHT Council Network Development Corp. (WEDC) page 20 27 Exact Sciences PUTTING RISK CAPITAL TO WORK PUTTING RISK CAPITAL TO WORK Srini Kalluri, Forte Jim Tretheway, BioIonix Research Systems Amelia Baxter, WholeTrees Kurt Brenkus, Aver Informatics 28 WIPFLI BADGER FUND OF FUNDS The New New Funds / Data Analysis Crowdfunding: WISCONSIN PORTFOLIO 2013 Venture Investor by Sector & Kick-starting WISCONSIN ANGEL page 24 Economy 1SPmMFT Survey the Process NETWORK 29 Venture InvestorsAssets Success Stories Viewpoints 1SPmMFT 2018 DEAL PREVIEW UW-Milwaukee Research Foundation River Valley Bank page 28 2 0 1 5 2017 WISCONSIN PORTFOLIO WISCONSIN PORTFOLIO WISCONSIN PORTFOLIO P UTTING R I SK C APITAL TO WORK A PUBLICATION OF THE WISCONSIN TECHNOLOGY COUNCIL INVESTOR RESOURCES A PUBLICATION OF THE WISCONSIN TECHNOLOGY COUNCIL Wisconsin Technology Wisconsin Council Back Cover Technology Council TECH COUNCIL INVESTOR NETWORKS + + 10.9% PEOPLE IDEAS MONEY 1.6% TARGETING 10.9% EARLY STAGE 10.9% Welcome to the 2018 Wisconsin Portfolio, an annual publication of the SUCCESS = NEW COMPAN IES 27.3% 3.1% Wisconsin Technology Council through its Tech Council Investor Networks and its partner, the Wisconsin Economic Development Corporation. IT JOE SCANLIN KERRY FRANK BRIAN JENSEN LIZ EVERSOLL SCANALYTICS COMPLY365 FISHIDY SOLOMO TECHNOLOGY HEALTHCARE TARGETING BIOTECH EARLY STAGE TECHMAK COUNCIL ING THE CASE AGRICULTURE SUCCESS 35.2% Wisconsin INVESTOR OTHER Produced by: MAKING THE CASE FOR A CORPORATE CONSUMER/ FOR A CORPORATE Technology NETWORKS BUSINESS PRODUCTS “FUND OF FUNDS” Wisconsin ADV MATERIALS & Council Technology MANUFACTURING “FUND OF FUNDS” Council 2018 WISCONSIN PORTFOLIO INTRODUCTION Dear Readers – The Wisconsin Tech Council and the Tech Council Entrepreneurs and their companies will ultimately be Investor Networks are proud to present the 2018 driving Wisconsin’s future success, and the capital Wisconsin Portfolio, Wisconsin’s premier investing our investors provide continue to be a driving factor. report containing the most complete compilation and With the momentum on our side, we look forward to analysis of entrepreneurial and investment activity in fulfilling our organization’s important mission: Fuel Wisconsin. This year’s publication marks the 10th the growth of investment capital in Wisconsin. anniversary of the Portfolio and the Tech Council’s tracking of Wisconsin investment data. We thank you for your support and hope you This year, 20 of the state’s leading early stage enjoy the read! investment groups participated in the study. There were 127 venture-backed companies in Wisconsin, up 71 percent from five years ago, but slightly down from last year, when there were 138 Wisconsin- based companies that raised funding. While it is gratifying to record growth over five years, there continues to be a need for additional capital and new funding. Since our 2017 Portfolio was All the best, published last spring, there has been a bit of both, with existing VCs raising additional funds and several new funds being announced. We are excited to announce this edition of the Bram Daelemans Portfolio expands and examines the data in more Director, Tech Council Investor Networks detail than last year, which allows us to analyze the A program of the Wisconsin Technology Council state of the ecosystem even better and paint you a better picture. TECH COUNCIL INVESTOR This publication also features: NETWORKS • A profile on Tom Shannon, the 2017 inductee into the Wisconsin Investor Hall of Fame • Policy highlights and updates • A primer on early stage investing in Wisconsin • A resource guide 2 Networking matters. <br > Making connections is critical to success. In Wisconsin and across the nation, AT&T links businesses with their customers and the world through our wireless network with access to the nation's largest Wi-fi network. It's just another way we help communities stay connected.<br > AT&T is proud to support the Wisconsin Technology Council. <br > © 2018 AT&T Intellectual Property. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners.<br > 2018 WISCONSIN PORTFOLIO EXECUTIVE SUMMARY At least 127 Wisconsin early stage companies raised investment capital in 2017, a 71 percent increase from five years ago but an 8 percent decrease from last year. More than $231 million was raised by those 127 companies, which is less than the $276 million raised in 2016. Despite the decrease, the $231 million raised last year is the second highest total raise recorded in Wisconsin. ANNUAL TRENDS 138 128 127 112 86 74 $163,447,237 $128,327,172 $218,798,886 $209,479,099 $276,191,739 $231,040,882 2012 2013 2014* 2015 2016 2017 Total Investment Number of deals * An adjustment was made to the 2014 numbers to more accurately reflect investments that year. 4 A PUBLICATION OF THE WISCONSIN TECHNOLOGY COUNCIL Using public reports, filings and surveys, the down from 53 companies in 2016 and 46 Wisconsin Technology Council and its Tech companies in 2016. Furthermore, median Council Investor Networks tracked a total of round size in 2017 has dropped to $360,000 $231,040,882 that was invested in the 127 down from around $514,000 in 2016 and companies (see pages 14-19 for detailed $600,000 in 2015. Finally, there was also a reporting and analysis). The largest deals shift in the distribution of funding rounds with reported were SHINE Medical a smaller share of companies (11 percent) Technologies ($24.7 million), UAS raising between $1 million and $10 million Laboratories ($21.2 million), Promentis but a larger share of companies (11.6 Pharmaceuticals ($17.6 million), Fetch percent) raising between $100,000 and $1 Rewards Redox ($10.4 million) and ($10 million. “The number million). This may just be a temporary case of of early-stage In line with the national trend, there was a investor fatigue. The increased activity these decrease in number of deals and total past five years may be catching up to companies dollars raised. After 2016 – a year in which investors. A lot of companies have secured reporting the Wisconsin ecosystem set records for a lot of capital. While many of them may be activity – this indicates a return to normalcy successful and growing, not many of them investments and part of the natural ebb and flow. As have had the successful exits Wisconsin such, it does not affect the otherwise needs to get new and existing investors has shown positive trendline of the past seven years.