Business Plan Contest finalists symbolize growth targets for state investment plan
Now in its 10th year, the Wisconsin Governor’s Business Plan Contest has always been a canary in a high-tech coal mine. It provides an annual overview of the kinds of businesses emerging in the state’s tech sectors – as well as areas of relative decline.
The list of 21 finalists for the 2013 competition, which will grow to two dozen when top collegiate contests feed into the mix, is no exception to the rule. For state policymakers who are weighing how to best target a $25 million early-stage fund envisioned by Gov. Scott Walker, the list is a harbinger of emerging opportunities.
The contest began in late January with a record number of entrants from 106 communities across Wisconsin, further evidence that entrepreneurs with good ideas can hail from anywhere. The list was narrowed by independent judges in late February to about 50 semi-finalists and again last week to 21 finalists, with one more cut to come before the “Diligent Dozen” present June 4 at the Wisconsin Entrepreneurs’ Conference.
The survivors are a microcosm of Wisconsin innovation, with finalists pushing the envelope in traditional sectors such as agriculture and manufacturing, as well as information technology, engineered products, and medical devices and imaging.
- Software and business service plans among the finalists include systems and applications for agricultural field surveillance, real estate searches, automated research, martial arts management, medical education, wedding planning, gaming – and even a system for awarding good behavior in children.
- Manufacturing ideas cover innovations in electric motors, energy-efficient windows, data-center cooling, wastewater treatment, “green” trolley production, and several aspects of trucking.
- Health-related plans include a rapid cardiac analysis system, an emergency cooling vest for hypothermia cases, a nitric oxide system for treating diabetic foot ulcers, a device to noninvasively measure hydration, and tools to assist diabetes drug discovery.
Over 10 years, the contest has attracted 2,613 entries spread among four major categories – advanced manufacturing (818), business services (759), information technology (681), and life sciences (355). The life sciences category, while highly competitive, has attracted fewer drug development start ups in recent years because of high regulatory and fundraising hurdles in that sector. It simply takes longer to incubate such companies, nationally as well as in Wisconsin.
The statewide contest is emblematic of market data that may guide members of the Wisconsin Legislature as they consider how to make best use of a $25 million “placeholder” in Walker’s budget bill for early-stage investments.
Lawmakers will likely seek to construct a plan, either through a separate bill or as part of the budget, to establish a privately managed “fund of funds” that would require a 2-to-1 match from private investors. Because the initial amount of the fund is modest by national standards, lawmakers could choose – at least initially – to focus on sectors where return on investment and job creation prospects are highest.
That’s not unlike what happens with similar funds in Wisconsin and nationally. When the Wisconsin Alumni Research Foundation and the State of Wisconsin Investment Board announced the creation of an early-stage fund last month, its leaders said the investment focus would be data management, informatics, data storage, social grid computing, hardware, new materials, software, mobile technology security, and health care information technology.
The Governor’s Business Plan Contest is only one indicator of market trends. However, other metrics such as investments by existing private funds in Wisconsin, sector-based accelerators, and the Qualified New Business Venture program within the Wisconsin Economic Development Corp. also help highlight Wisconsin’s innovation trends and strengths.
Building on those strengths should be among the goals of a state-leveraged early-stage fund.
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