• WisBusiness

Monday, March 31, 2014

Tom Still: Angels in the cornfields: Investing not just a big-city game


By Tom Still
Inside the Nohr Art Gallery on the UW-Platteville campus, 15 or so people gathered last week to talk about a lot more than the paintings and photographs on the walls.

The group included business people from the region, which includes southwest Wisconsin and nearby Dubuque, who have succeeded in agriculture, communications, software and engineering. It also included campus leaders who wanted to know more about how to channel student and faculty interest in entrepreneurism.

The topic was angel investing, a subject usually discussed on the nation's coasts and larger cities, but increasingly part of the conversation in states such as Wisconsin.

At the invitation of UW-Platteville Chancellor Dennis Shields, the group heard about trends in angel investing nationally and in Wisconsin. It was part of an "Investors' Edge" presentation by the Wisconsin Angel Network, which is part of the Wisconsin Technology Council.

What are angel investors? No, they're not spiritual beings come down from above with celestial cash. They are accredited high-net-worth individuals who invest money, time and their own expertise in startup business ventures. Angels typically do so early in a company's lifespan – before venture capitalists enter the picture – in hopes of realizing a sizable financial gain over time.

The "angel" part comes into play because these investors are typically entrepreneurs themselves who care about sharing their good fortune and experience with others. Return on investment is No. 1 on any angel's priority list, of course, but enlightened self-interest side often enters the equation, as well.

That's because angel investing is predominantly a local sport, as demonstrated by the annual "Halo Report" released this week at a meeting of the Angel Capital Association.

The 2013 report charted the size of typical angel deals (about $600,000 nationally), total estimated volume of deals, popular investment sectors – such as health care, Internet and mobile – and leading angel network and funds across the United States.

Most of those networks are clustered in California, Texas, Boston and other coastal bastions, as might be expected. However, a trend noted in the report was the strength of angel investing in the Great Lakes region that includes Wisconsin.

While California led with 18.6 percent of all angel deals, the Great Lakes region was second at 11.8 percent of deal flow. That was slightly ahead of the Southeast (11.7 percent) and New England (11.3 percent), with New York, the Mid-Atlantic, Texas and the Northwest all falling in the 8 to 9 percent range.

In Wisconsin, the rise of angel networks began about 15 years ago with the formation of groups such as Wisconsin Investment Partners in Madison, Origin Investments in La Crosse, Silicon Pastures in Milwaukee and Golden Angels in Milwaukee. The advent of state tax credits for angels who invest in specific "qualified" companies has helped drive up total investments from a few million dollars per year to more than $60 million in a typical year, all in young companies.

Today, there are roughly two-dozen active angel groups in Wisconsin, as well as some later stage funds and corporate investors. The Wisconsin Angel Network (http://www.wisconsinangelnetwork.com) helps provide access to deals and networking for all of them, and has been a part of helping form or renew networks in places that might seem off the beaten path.

Ten years ago in Wisconsin, there were only two angel networks outside Milwaukee or Madison. Today, there are a dozen in communities such as Marshfield, Eau Claire, Oshkosh, Vilas County, Wausau and beyond.

Angel networks are typically a group of investors who meet periodically to review and co-invest in business opportunities, with no requirement that each member invests in every deal. Angel funds are more formal structures in which each member invests in the fund – and the fund collectively selects the deals. Such groups increase the quality and quantity of deals that can be reviewed, spread the costs of due diligence before any investment are made, and create more co-investment opportunities.

Also, entrepreneurs can draw some comfort in dealing with networks and funds because they know the investors are "accredited," which means they meet certain income and net worth requirements. Investments made by accredited investors exempt the entrepreneur from certain federal filing requirements and regulations.

Not every community is ripe for an angel network by a longshot. For those places that meet certain self-imposed tests, however, it's one more way to build economic strength close to home. It's not for the faint of heart, but Wisconsin is proving that angel investing need not be just for the big cities and states, either.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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Monday, March 24, 2014

Tom Still: Wisconsin and Midwest slowly finding way on to investors' radar screens


By Tom Still
Inside the sparkling new offices of Nordic Consulting, a firm that has grown from a handful of health information technology experts to 400 employees and more than 90 customers, three venture capitalists from Boston sat down recently to talk about what they're seeing in Wisconsin.

So far, they said, it's been worth the trips.

The investors – from Summit Partners and HLM Venture Partners – have put money and expertise into Nordic, which consults with health care providers who use Epic Systems software. Because they're already in town, those same investors sometimes scout other emerging companies in Wisconsin, particularly those in health information technology and medical devices.

"Since we've invested in Nordic, I've probably looked at a dozen companies in Madison and Milwaukee," said Yumin Choi, a partner in HLM Ventures.

Peter Grua, also a partner in HLM Ventures, noted that Madison today "is similar to where Nashville was 25 years ago" in terms of its healthcare startup culture. In Nashville, the success of two major companies in pioneering a nationwide shift from inpatient to outpatient care helped spawn spinoffs that continue to drive that city's economy.

"It's very likely the same events can happen (in Madison)," Grua said.

Events such as the recent investor forum at Nordic are not the only examples of venture capitalists from the East and West coasts – and beyond – finding their way to Wisconsin these days.

Google Capital invested $40 million in Renaissance Learning, the educational software company based in Wisconsin Rapids, in February and the company was sold to a private equity firm within a month for $1.1 billion – more than twice its acquisition price only three years ago.

Investors from Illinois, Minnesota and New York are increasingly showing up in deals in Wisconsin, especially around software companies and a variety of digital products.

TechCrunch, a news site focused on information technology companies, recently carried a story headlined: "For Tech Investors, the Midwest is Flyover Country No More," with a reference to Madison and "a slew of acquisitions and public offerings from Wisconsin."

So, what's happening to capture the attention of investors who previously couldn't find Wisconsin on a map? There's no single answer, of course, but several factors are helping to raise the profile.

* Long known for biotechnology innovation, the state has also developed clusters around health IT, medical devices and imaging, human resources management, software and more. For investors, that means more tires to kick when they're looking to buy.

* Wisconsin's angel investor corps has grown from a group that could have met in a telephone booth in the late 1990s to more than 20 groups today, with more forming. The state's investor tax credit law and the creation of the Wisconsin Angel Network to help share information about deals have both helped.

* As with almost any business, access to talent is vital to tech investors. World-class computer science and electrical engineering schools at the UW-Madison and other colleges are a part of that picture, as well as the availability of former Epic and Sonic Foundry employees who leave and wind up working for young companies.

* New technology incubators and accelerators are part of the state's pipeline of young companies, not just in Madison and Milwaukee but in the Chippewa Valley, the Fox Valley and beyond.

* The state of Wisconsin's $25 million commitment to a "Badger Fund of Funds" that will eventually attract twice that much in private investment has signaled that policymakers are willing to invest in emerging sectors of the economy.

* Overall business costs in Wisconsin can be lower than they are in other parts of the country, particularly the East and West coast hubs where most venture capitalists are located. That can lead to deals that cost less over time.

The investment numbers have yet to tell the story, but investors from outside Wisconsin are window-shopping much more routinely these days. The trick is to keep producing the kind of innovative companies that compel them to stop and buy.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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Jennifer Sereno: New economy trends promise to shape Wisconsin's landscape this construction season


By Jennifer Sereno
Spring may be a time for melting snow and potholes in Wisconsin, but more prophetically, it's a time for tower cranes to sprout and new foundations to take root.

This spring, construction appears set to rebound in several sectors, buoyed in part by some New Economy trends.

Bernard Markstein, chief economist for Reed Construction Data, which develops forecasts based on building permit activity and new projects out for bid, anticipates total construction spending to rise by 5 to 6 percent nationwide after accounting for inflation in material and labor costs. He expects southern Wisconsin, including Madison and Milwaukee, to perform nearly on par with the national level while local experts offer up several area projects that exemplify important socioeconomic changes.

Matt Mikolajewski, manager of the Office of Business Resources with the city of Madison, says it's no secret that Epic of Verona is contributing to a boom in professional-caliber apartment projects in downtown Madison. His latest count shows about 3,200 apartments under construction or in the approval process – up dramatically from last year's already record pace of roughly 1,600.

"I don't believe as a city we've ever seen this amount of apartment growth, but Epic isn't all of it," Mikolajewski says. "It's also young professionals who are holding off on purchasing a home and want to stay in an apartment for a longer period of time."

Given some of the amenities on tap – from rooftop pools to dog washing stations – it's no surprise that a growing number of affluent young renters are opting out of the responsibility and long-term commitment associated with home ownership. Interestingly, though, it's also empty nesters fueling Madison's high-end apartment boom.

Mikolajewski points to some who have recently moved to the area as well as lifelong residents who are now ready to sell large family homes into the recovering market and downsize. The big loser in the trend? New condominium projects.

"There's very little in the way of new condominium construction at the moment," he notes. Plans for new single family homes also remain well below the area's historical average.

On the commercial end of the spectrum, Markstein of Reed Construction says he anticipates an uptick in health care construction as uncertainty over the Affordable Care Act diminishes. In the Madison area, growing demand for quality health care is already playing out with this weekend's ribbon cutting at the new $68 million Sauk Prairie Hospital in Prairie du Sac.

Following the 10 a.m. ribbon cutting on Saturday, March 22, the 36-bed facility will welcome visitors for an open house and tours from 10:30 a.m. to 5 p.m.

Visitors to the new hospital, on 115 acres near the intersection of Highways 12 and PF, will be sure to notice a second major medical project under construction next door. The multi-tenant clinic now under construction will total some 60,000 square feet with a projected cost in the range of $10 million to $12 million.

Alan Main, president of Development Solutions Group, says the project will be home to specialty clinics and patient services for Dean, UW Health, Home Health United and Advanced Pain Management. It also will house additional clinics and related providers for Sauk Prairie Hospital including a new women's health center, orthopedic team, cardiac rehabilitation center and sleep lab.

Markstein says hospitals and clinics increasingly recognize the need to deliver services where people live, in some cases expanding to suburban areas and in other cases opting for additional clinics offering targeted services in more central locations.

"If you build new, (there's no) better place than close to your patient population,'' Markstein notes. In many cases, retrofitting older health care facilities can become prohibitively expensive while new construction may help reduce operating costs, increase energy efficiency and provide an opportunity to upgrade equipment and patient care amenities.

Within Madison, the trend can be seen with a UW Health clinic planned for the Gorman and Co. Union Corner development on the East side and a Meriter physical therapy clinic planned on South Park Street, the city's Mikolajewski says.

"Overall on the commercial side, I think we're starting to see an uptick in terms of projects moving through the development process," Mikolajewski says. Generally, the construction outlook "looks good and we're seeing a lot of activity."

In short, spring is in the air. Can the cranes be far behind?



-- Sereno is a former business editor of the Wisconsin State Journal who has written about new economy trends for various publications. Send email to sereno.jennifer@gmail.com.

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Monday, March 17, 2014

Jennifer Sereno: Promega Corp.'s commitment to the arts breathes life into the life sciences


By Jennifer Sereno
Promega Corp. has long been recognized as a place where good ideas generate great results.

With branches in 15 countries and more than 50 global distributors, Promega's high international profile is built on the strength of science started right here in Wisconsin. The company offers a portfolio of more than 3,000 products used in genomics, protein analysis and expression, cellular analysis, drug discovery and genetic identity.

From its modest start in 1978 providing enzymes for biotechnology research, the privately held company now employs some 1,300 including 700 at its headquarters in Madison and generates annual revenue of approximately $350 million. Yet, from the start, CEO Bill Linton has consistently worked to cultivate a sense of "life" at the life sciences business.

Nowhere is that more evident than in the recent opening of the Spring Art Showcase, a beautifully curated exhibition that runs through May 30 at the Promega BioPharmaceutical Technology Center, 5445 E. Cheryl Parkway. Free and open to the public, the showcase features the work of four artists — three from Wisconsin and one from Arizona.

The company's artist showcases, which typically include spring, summer and fall events, have been keeping Daniel Swadener busy since 1995. As curator through the years, he's watched the displays stir curiosity and stimulate conversation among scientists, artists, students and the general public. These are the effects he's been hired to achieve.

"There's no other place I've seen that has an environment as conducive as this one," Swadener says of the BioPharmaceutical center, which hosts scientific, educational and cultural programs and encourages greater understanding of the creative process. "It's all about art and creativity. Without creativity, scientists would never find anything new."

Swadener likens the effort of creating great art to the process of scientific discovery. In both cases, he notes, there are numerous opportunities for failure trumped by moments of exhilarating triumph.

"When you get past the rules you've been taught, and the skills you know you have, that's when you get goosebumps – when you've made the discovery," he says. "And then you look back and wonder why it didn't occur to you before'' yet a completely new path forward exists.

Featured artists in this spring's exhibition are:

* Oliverio Balcells, a photographer, painter, self-taught musician and scholar of ancient Mesoamerican cultures. A native of Guadalajara, Mexico and current Arizona resident, his bright, contemporary work drives away the end-of-winter blues with photographs and vibrant paintings featuring themes from his homeland.

* Terrence Coffman, an artist, author, musician/songwriter and internationally recognized leader in art education from the Milwaukee area. Be sure to visit his sweeping landscapes that appear completely at home on the BioPharmaceutical center's open and airy second floor.

* Tom Loeser, chairman of UW–Madison's Department of Art. Loeser's one-of-a-kind wooden objects include a series of stunning "sit-upons" ranging from ingeniously crafted benches and chairs to welcoming stoops that resemble inviting front porches. Check for signs – you'll want to touch and sit on the silky-smooth wood where allowed.

* Paul Nitsche, a Madison artist, explores the intersection of art and historical representations of the human body. His carved and veneered shadow boxes, bronze and limestone sculptures and mechanical paper doll automata challenge visitors with fine technique, yet often troubling themes of physical and psychological suffering.

While Promega represents an example of a New Economy company with a strong enough financial position to make an ongoing commitment to the arts, Swadener says the fine art market has stabilized in recent years, with quality works from talented artists available at prices affordable to individuals and small companies.

"The economic downturn was a weeding out process" in terms of overpriced work, Swadener says. "We're now seeing better quality work and prices that are back to a sustainable level."

The Spring Art Showcase runs through May 30 and welcomes visitors Monday through Friday from 8 a.m. to 4 p.m. For more information, visit www.promega-artshow.com.

-- Sereno is a former business editor of the Wisconsin State Journal who has written about new economy trends for various publications. Send email to sereno.jennifer@gmail.com.

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Tom Still: Principle of 'creative destruction' means churn and learn for Wisconsin economy


By Tom Still
With 11 stores and more than 1,000 employees spread over three states, American TV & Appliance stood as an iconic homegrown billboard for "too big to fail."

But fail it has, after a run that spanned 60 years, in part because the innovation that characterized American in its "Crazy TV Lenny" days faded into static on a black-and-white picture tube. Competing on price alone no longer worked in an era when the Internet guaranteed someone could always sell for less.

As American prepares to shut its doors, lessons about competing on quality, service, product and price can be found in recent company expansions in Wisconsin.

Amazon.com may strike some people as the kind of online company that led to American TV's demise, but the secret to Amazon's success is more than the triumph of clicks over bricks. From its roots in book sales, Amazon has grown into the world's largest online retailer, offering consumers seemingly endless choices for products – new, used and virtual.

With those clicks come bricks in the form of distribution centers, the likes of which Amazon will build in Kenosha over the next few years. The first phase will span 1 million square feet and a second will cover half that size, with a total investment reported as roughly $200 million. About 1,200 good-paying jobs will be created over time.

Wisconsin competed with 12 other states for the Amazon project and won, not just because it offered tax breaks and incentives, but because a partnership emerged between state and local governments. Confidential talks between Amazon and the Wisconsin Economic Development Corp. began in late 2012 and concluded inside a year with local assistance.

Some benefits are already showing up in state tax coffers: With the future distribution center giving the company a physical presence in Wisconsin, Amazon began collecting taxes on sales to Wisconsin residents last fall. That will raise about $30 million in the first year alone.

Why Kenosha? Beyond the partnership, key factors were land, location and logistics. Amazon prides itself on speedy delivery, which is facilitated by being within a half hour of Milwaukee's airport and minutes of the interstate highway system. Several other distribution centers and light industrial projects have been landed by Kenosha for similar reasons.

Another success story that revolves around innovation and consumer service is United Natural Foods, a leading distributor of organic, natural and specialty foods. United Natural Foods is in the midst of hiring about 220 workers for its $40-million Sturtevant distribution center, which covers 425,000 square feet. Total employment at the Racine County site could hit about 260 within five years.

Again, land and logistics made a difference, but so did workforce, state and local partnerships and a streamlined permit process.

United Natural Foods must have felt good about the Sturtevant process because it recently announced plans to build a $38-million distribution center in Prescott, near the Minnesota border, that will create up to 314 jobs over three years. The story behind the second facility was much the same as the first, with location, overall business costs and state and local government cooperation combining to pave the way.

That's not just a Wisconsin phenomenon. Two years ago, when Site Selection magazine surveyed corporate experts on their most important location criteria, state and local tax climate was No. 1 on the list. Transportation infrastructure, utility infrastructure, and land and building prices and supply were second, third and fourth, respectively. Wisconsin is well positioned to deliver on all three, and perhaps the first.

For every older business model that fades away, there is an innovative successor. It's a part of the process economists call "creative destruction," the notion that new ideas naturally push up from below to crowd out those the market no longer supports. No one should celebrate American TV's demise, but it's good to know Wisconsin is poised to attract and grow the next generation.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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Monday, March 10, 2014

Tom Still: Amid debate over Common Core standards, STEM consensus offers lesson


By Tom Still
Although it's a safe bet most people in Wisconsin know little if anything about the debate over nationwide academic standards, the so-called "Common Core" guidelines under fire in the Legislature, they've probably heard of STEM education.

That's an acronym for Science, Technology, Engineering and Math, a collection of subjects that many experts, parents and business leaders believe should be taught more in American schools as a matter of global competency in a competitive age.

In fact, STEM is so relatively accepted that the original acronym has spawned at least two variations – STEAM, which adds arts to the mix to promote creativity and design thinking skills, and ESTEAM, which folds in entrepreneurship and the notion of applying STEM knowledge to solve real-world problems.

Gov. Scott Walker and others may have their problems with Wisconsin's Common Core standards, which have been in the works since 2009, but when it comes to STEM education, his office proclaimed next week as "STEM Week" in Wisconsin. The Wisconsin Department of Public Instruction recently rolled out a modest grants program for schools that want to enhance STEM programs, and many statewide groups are working to make science, technology, engineering and math a bigger part of the curriculum.

That raises the question: If people of different political stripes can agree STEM education is vital, why are they unable to come together around the nationwide effort to address uneven academic expectations across the spectrum of subjects taught through K-12 education?

After all, some of the same general goals of Common Core can be found in STEM: Learning to think critically at an earlier age, being better prepared to pursue college or career training, and being better equipped to compete globally.

Part of the answer lies in the fact that Common Core standards, while developed by well-meaning educators and others, have yet to connect in a popular way that parallels the rise of the STEM movement.

The case for better science, technology, engineering and math education has been built over a decade or more, even if the hype is still not matched by consistent state and local financial support. However, parents and business leaders generally accept that STEM education is important because they see how it might connect to the lives of young people – and the nation's economic future.

Two current examples illustrate how STEM education, from middle school to higher education settings, can connect with some of society's broader goals.

The 11th annual "Posters in the Rotunda" event will be held Wednesday in the Capitol, highlighting the work of about 100 undergraduate researchers and their faculty advisers within the University of Wisconsin System. About 20 campuses will be represented, from four-year powerhouses such as the UW-Madison and UW-Milwaukee to the system's two-year centers. The posters will cover topics ranging from treatment of bedding to reduce mastitis in dairy cows to water technologies to applied uses for engineering, math and biotechnology.

"Graduates who have positive experiences and a strong affiliation with their undergraduate institution are more likely to consider staying in the state," said UW System President Ray Cross. "Undergraduate research can bring more federal and private-sector research and development dollars into the state (and) a vibrant research culture grows and attracts new businesses and high-tech industry for Wisconsin."

A related but much earlier effort is the Wisconsin Youth Entrepreneurs in Science business plan contest, known as Wisconsin YES! This three-year-old contest is aimed at giving middle school through high school students the chance to write a business plan around what is often a STEM topic. It encourages those students to think about how what they learn in the classroom can apply to starting a business or simply moving an idea to the next level.

Students can enter a 250-word idea online through March 17 at http://www.wisconsinyes.com. Finalists will write 1,000-word plans later, and the winner will present to a statewide audience at the Wisconsin Entrepreneurs' Conference in June.

There's nothing inherently evil about the Common Core standards, but the public relations case has yet to be fully made because schools, families, teachers and students aren't quite sure how it will affect them. Support for STEM education has grown over time because people can better see how it's linked to a competitive future, for them and their children. That's an important lesson for all.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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Wednesday, March 5, 2014

David Guinther: Bored of directors?


By David Guinther
Do you look forward to your Board meetings? Are they insightful, productive, and inspiring? Or are they more of a distractive obligation?

Your Board should be your greatest asset. If not, you need to take responsibility for it, and then act to transform it. By following these recommendations, you will create and unleash an asset that will better serve your shareholders, executive team, company, and career.

First of all, the composition of your Board needs to reflect the company that you want to become, and not the company that you are or once were. As just one example, if you are striving to transform your company into a multinational, your Board should be comprised of a mix of people that collectively possess the needed range and depth of perspective, experience, and professional contacts to do so.

Secondly, Board membership needs be viewed as analogous to a relay race, but too often it is viewed more like academic tenure. Different skills sets are required to take your company from zero to $1 million, from $1 million to $10 million, from $10 million to $100 million, and so on. Or from a distribution to a product company. Or, once again, from a domestic to a multinational company. Welcome all growing pains and adjust accordingly. Your Board needs to view its expected handing off of the baton as a great milestone achievement for them, and a confirmation of a relay race stage well run.

Thirdly, your Board needs to be one that works and is held accountable. Too often Board meetings are an exercise in "pop in" governance in which management tries to prove to the Directors that it is executing as well as is possible, while in turn the Directors try to prove to management and each other that they actually add value to the discussion. Although governance is an important function, it is also only a small fraction of what your Board is capable of contributing.

Instead your Board needs to be actively engaged in true corporate development. While you are focused on effectively executing the agreed upon strategy and delivering the expected operating results, who is thinking about the best outcome for your investors, such as a liquidity event? Who is actively developing the pipeline of potential acquirers? Who is thinking about how to achieve and maintain a readiness for a strong valuation? Or is thinking about how to avoid any operational decisions that will complicate a future due diligence process? Is ensuring that you will have timely access to the necessary flow of capital? Or opening up executive level doors for your company as you pursue business development opportunities? (You are not trying to do all of this yourself, are you?)

Having a working Board means that your Directors are actively contributing value between meetings and in areas that you the most need help with. And it means that during a Board meeting your Directors are also reporting on their achievement of their corporate development commitments. In other words, all parties are contributing to shareholder value and are accountable to each other for doing so.

Fourthly, if you want to attract the best of the best to your working Board, compensate them accordingly. I am not referring to insiders or investor representatives who are already compensated elsewhere, but to independent Directors that you need to attract in order to build the company that you envision.

Highly successful people think about opportunity cost. If you want to secure the services of highly engaged, experienced, skilled, and connected Directors, do not approach them as if you neither understand nor respect the value of what you are asking them for, as if you are somehow entitled to their pro bono support. Instead appreciate that you are competing against alternative uses for their valuable time and effort, and act accordingly.

In business, most people do not properly value what they do not properly pay for. As a rule, include a material cash component in any Independent Director package because "cash is king" and reflects the priority and value that you place on having a truly productive, working Board. If you do not, then what caliber of independent Director do you expect to attract?

And lastly, properly manage your Board! Think of your working Board as a new sports car that requires skill and attention to extract the performance it is capable of delivering. Fully exploit the opportunity presented to you by this collection of talent, experience, and connections. A thoughtfully composed and managed Board is an opportunity for you to listen, learn, lead, challenge, enjoy, and thrive. If you are willing to invest the necessary time, effort, and resources to create and maintain a truly productive, contributory Board, you will improve your odds of a successful outcome for your investors, company, and career.

And isn't that what you really want?

-- Now based in Madison, Guinther is a proven entrepreneur and senior executive, a turnaround specialist, a company founder and builder, a management consultant, a board member, and an executive coach. His current ventures include Threadian, XY Wellness, Mr. Happy, and Viggor. You may contact David at david@threadian.com.

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Tuesday, March 4, 2014

Jennifer Sereno: Joint summit set to advance economic development, strengthen leadership and diversity


By Jennifer Sereno
Madison Region Economic Partnership and Urban League of Greater Madison to host joint meeting

Can the Madison region become a national model for transforming racial disparities into economic opportunities?

Yes -- if the Madison Region Economic Partnership and Urban League of Greater Madison have anything to do with it. In a groundbreaking step forward for the region, the two organizations will hold a joint summit focused on economic development, diversity and leadership.

The event, set for May 9, combines MadREP's annual state of the region summit with the Urban League's workplace diversity and leadership event to reach more employers and leverage collective efforts in the region. Attendance at the event, called Advancing Talent, Opportunity and Prosperity: The Madison Region's Economic Development, Diversity and Leadership Summit, is expected at 500, ranging from CEOs and entrepreneurs to educators and diverse community leaders.

"Economic, workforce and community development are inherently intertwined," says Paul Jadin, president of MadREP. "With this partnership, we are committed to bringing together a diversity of voices to address the region's challenges, celebrate our progress and leverage the opportunities that will ensure our economy's continued growth."

Featured speakers at the event include:

* Joel Kotkin, an internationally recognized authority on global economic, political and social trends and author of The Next Hundred Million: America in 2050;

* Ken Salazar, a former U.S. Senator and U.S. Secretary of the Interior who is one of nine Hispanic senators to serve the U.S. and is now a partner at the law firm WilmerHale; and

* Maria Campbell, an industry consultant on leadership and diversity who served as corporate director of diversity at S.C. Johnson for 28 years.

Kaleem Caire, president and CEO of the Urban League, says the south central Wisconsin region benefits from a number of inherent economic strengths, including the model effort by MadREP and the Urban League to focus on challenges together.

"Everything we need to make a community great, we have right here: a world-class university, a great technical college. And we are the seat of government," he says. Caire, who announced this week he will step down from his post at the end of the month, will remain involved in the summit planning process.

To maximize the region's potential, Jadin says opportunities for advancement in the New Economy need to extend throughout the workforce to reach the unemployed and underemployed.

"If we don't include everybody, we can't claim to be a prosperous region," Jadin says. "I hope we'll come out of the event with a better understanding of what everybody can do."

Where to start?

The summit organizers credit several major employment sectors including the insurance industry, health care, government and some media and real estate employers with leading the way. Increasingly, area employers are seeking new ways to increase the diversity of candidates within competitive applicant pools.

"It's important to let people know there are companies that are already stepping up to the plate," Caire says.

Yet while the summit will focus on the positive, there is serious work to be done.

Plans for the event follow a series of reports identifying racial disparities in the region including data published in December by the Center on Wisconsin Strategy focusing on employment and income challenges. According to the report, the unemployment rate for blacks over age 16 stood at 13.3 percent in 2012, compared with 5 percent for whites. At $26,222, the median income for African Americans was less than half of the $53,499 for whites.

In Madison, employment challenges are complicated by educational disparities. According to research published by The Business Journals, the city ranks seventh in the nation with 42.9 percent of the adult population holding a bachelor's degree. Yet the four-year high school graduation rate for African-American students in Madison schools stood at 53.1 percent vs. 86.7 percent for whites in 2011-12, according to the MacIver Institute.

"We need to do a better job of getting people through high school and getting them some sort of post high school training, whether it's a certificate program or two year associate degree," Jadin says. "Then, we're addressing two needs at the same time because clearly there are many companies that are hard-pressed to find talent for entry level roles. Those are areas where we can make significant strides."

One effort that appears to be working involves a multi-tiered training program offered by the Urban League in collaboration with local businesses. Since 2009, the number of individuals served by the organization has risen from 183 to 1,731 last year. The Urban League training starts at a foundational level, then moves on to customer service and industry specific training, including opportunities to link with participating employers.

The joint summit in May aims to build on such efforts and provide self-assessment tools employers may use to measure progress ranging from gains in the workforce to increased diversity at the board level, Jadin says.

Participation from throughout the eight-county MadREP region serving Columbia, Dane, Dodge, Green, Iowa, Jefferson, Rock and Sauk is encouraged, with scholarship support and special group rates available. With its headline speakers, updates on regional progress, resource offerings and networking opportunities, the summit promises to jumpstart new collaborations.

"The fruits of today's labors may not be seen for five to 10 years, but that doesn't mean we should stop trying," Jadin says. "The message is that economic development is something that should benefit everyone."

Summit registration details

Advancing Talent, Opportunity and Prosperity: The Madison Region’s Economic Development, Diversity and Leadership Summit

Registration for the daylong event set for Friday, May 9, from 7:30 a.m. to 4 p.m., is available online at http://www.advancesummit.com. The event will be held at Monona Terrace.


-- Sereno is a former business editor of the Wisconsin State Journal who has written about new economy trends for various publications. Send email to sereno.jennifer@gmail.com.

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Monday, March 3, 2014

Tom Still: Tech-based innovation across America: Wisconsin is far from alone


By Tom Still
As the Wisconsin Legislature rolls toward a spring wrap-up of its work, economic development items on its agenda range from protecting intellectual property from "patent trolls" to setting the stage for more classified research to rethinking the state's sore-thumb tax on capital raised by many young companies.

It's all part of a trend, not only in Wisconsin but nationwide, where most state governments are paying attention to what makes the tech-based economy tick.

Some leading initiatives to support the creation and expansion of high-growth businesses and jobs were highlighted in a 2013 summary by the State Science and Technology Institute, which supports and tracks how state and regional economies grow through science, technology and innovation.

Wisconsin was singled out for several initiatives. In its report, "Trends in Tech-Based Economic Development," SSTI cited the Legislature's overwhelmingly support for a "fund-of-funds" that will begin with a $25 million state investment and attract matching private dollars over time. The money will be invested in state startups.

That same report by SSTI cited Wisconsin's decision to amend state securities laws to permit equity crowdfunding. It also highlighted the Wisconsin Economic Development Corp.'s $300,000 investment in the BrightStar Wisconsin Foundation, which is beginning to invest in Wisconsin companies.

The SSTI also praised the UW-Madison's investment in its "Discovery to Product" initiative to help move good ideas from the laboratory to the marketplace. That's an idea funded, in part, by the Legislature's UW System Incentive Grants. Only this month, the UW System and WEDC announced creation of a $2 million fund to help transfer technology from other system campuses.

Finally, SSTI cited three workforce development bills passed by the Legislature to better connect talent with jobs.

There's room to improve, however, as the STTI report illustrated. Here are examples of how other states invested in their R&D economies:

* Connecticut passed a 10-year, $2 billion Next Generation Connecticut Plan to expand funding for science and technology education on the campuses of the University of Connecticut and a $200 million fund to spur biosciences R&D.

* Pennsylvania's General Assembly approved a plan to auction $100 million in tax credits to generate state revenue that will be invested in the funding of tech-related startups.

* Lawmakers in Indiana dedicated $25 million to establish a biosciences institute with the expectation of building an endowment up to $400 million over the next five to seven years drawn from corporate and philanthropic sources.

* Colorado created an advanced industries acceleration program to provide grants ranging from $150,000 to $500,000 for proof-of-concept, early stage capital, retention and infrastructure. In a recent report by the Wing Marion Kauffman Foundation, five Colorado cites made the list of the nation's top 25 startup hubs.

* Rhode Island joined a growing list of states with a state matching fund for companies that win merit-based federal grants through the Small Business Innovation Research program. The 32-year-old SBIR program has been a launching pad for a number of companies that rely on technologies often developed by academic researchers. In Wisconsin, for example, 42 companies won 75 highly competitive federal awards worth nearly $37 million in the most recent year.

* Hoping to attract private funding for early stage companies focused on cybersecurity technology, lawmakers in Maryland established a $3-million Cybersecurity Investment Tax Credit Reserve Fund.

* Much like the Wisconsin "fund-of-funds," New York set aside $50-million for a venture capital fund to provide seed and early stage funding.

Too often, politicians are focused on protecting or bolstering parts of the economy that may be in decline. The smarter game in the United States today is to invest in tomorrow's economy, which usually includes emerging companies that have the potential for high growth and job creation.

As hockey great Wayne Gretzky once said in describing his success, "I skate to where the puck is going to be, not where it has been." As their own season moves toward a closing horn, Wisconsin lawmakers should tighten their skates and keep Gretzky's scoring mantra in mind.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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