Take Five with Richelle Martin: Sifting and winnowing for VC

Have you heard of entrepreneurs-in-residence on Wisconsin college campuses? Richelle Martin is trying a new concept as the managing director of the Winnow Fund, a new venture capital fund that is part of the Badger Fund of Funds and will invest in pre-revenue startups and create new companies around innovative products generated by Wisconsin college students. An attorney by training, she’s trying her hand at being a venture-capitalist-in residence after six years at UW–Madison, where she helped run the Office of Industrial Partnerships, the university’s nexus between industry and research.

Due to the fact that the Winnow Fund, which has raised $3.5 million so far, is still in the process of fundraising, Martin was limited in what she could say due to federal regulations. But in this Take Five interview, she talked about the potential benefits of tapping into young entrepreneurial talent around Wisconsin.

IB: To begin with, I can only assume the fund takes its name from sifting and winnowing, which, of course, is a metaphor for the academic pursuit of truth at UW–Madison. At least, that’s what it says on the plaque.

Richelle Martin

Martin: Yes, when I was working at UW, most of my time was spent working in Bascom Hall, so I walked by that plaque every day. I thought it was very applicable to the process that a venture capital fund goes through, and in particular with my focus being on universities from across the state. I really liked that for the name of the fund. The goal is to visit with universities across the state, talk to their entrepreneurially minded students, faculty, and staff and see what kind of innovations they are coming up with.

IB: Explain this venture-capitalist-in-residence concept that’s integral to this fund.

Martin: Sure, I think it’s really exciting. People are familiar with the entrepreneur-in-residence programs that a lot of different campuses have, and it gives students access to someone who has experience in starting a business. It’s really valuable because it’s someone who can provide real-world information, and it’s something that supports the other academically available programs.

What a lot of places don’t have is similar access to someone who has experience on the funding side. So, business programs teach students how to build a business plan, how to pitch, and different structures and legal entities for businesses, and that’s great. But what they don’t know is what to do when you need funding? What kind of information is a venture capitalist going to look for? What are the key performance indicators? How do you come up with that data?

And so, having a venture-capitalist-in-residence program is something that is a nice complement to the existing programming and to the experts already available on campus. A great example is that I worked at UW–Milwaukee for my undergrad degree, and I have art history, political science, and psychology degrees. Then, I went to law school. Somehow, I became a venture capitalist. There is no course track and there is no academic programming available for venture capital, so another aspect that we hope to add to it is putting this in front of students at an earlier stage in their careers so that they know this is an opportunity that they may be able to pursue.

I think it’s a win-win because if I get to be on campuses and I’m talking to these entrepreneurs, not only am I providing them with some hopefully valuable advice or insight into the venture capital world and the startup world, but I’m also sourcing deals.

IB: Will your first order of business be to visit as many campuses, especially the business schools, as you can?

Martin: I’ve already been working with quite a few campuses across the state, just letting them know what we’re doing, building relationships so that it’s something that will help me with managing deal flow in the future. So, it’s been part of my networking. It hasn’t been 100 percent fundraising. We’ve been going out and building those beneficial relationships already. One of the places that we’re looking is the student organizations and the resources that support those student organizations. Some good examples are pitch competitions, the college entrepreneur organizations, and the centers for innovation and entrepreneurship, so not necessarily through business schools because entrepreneurs come from all disciplines.

IB: Just looking at this concept, it would appear to have great potential to give town-and-gown technology transfer a real spark, not just in Madison but statewide, only this time with students, not just with faculty. Do you consider students a source of untapped entrepreneurial potential?

“I think students see the world very differently because things that I accept as a problem and just a way of life, students would look at that and say, ‘How do I solve that?’” — Richelle Martin, managing director, Winnow Fund

Martin: Absolutely. I think students see the world very differently because things that I accept as a problem and just a way of life, students would look at that and say, “How do I solve that?” I think that usually they come up with elegant, simple solutions to things that we wouldn’t even consider something that had to be fixed. They also see the world differently than we do because for them, all the changes that have happened over the past 10 or 15 years, technology-wise, are a normal way of life.

IB: I’ve seen a lot of very creative examples of that. For example, EatStreet in Madison, but I know you can’t speak to specific investments while you’re fundraising.

Martin: What I can tell you is the Badger Fund’s agreement with the state says that they will invest in agriculture, information technology, medical devices and medical imaging, advanced manufacturing, and engineering. Our relationship with the Badger Fund means that those flow through to us. So, in terms of industry sectors, it’s fair for you to say that we’re focusing on the Badger Fund limitations.

IB: When it comes to the Winnow Fund, is there anything else you’d like to add that perhaps I didn’t ask about?

Martin: I think in terms of what I’m able to say, the venture-capital-in-residence program is probably the thing I can talk the most about. I have a great support network as a first-time fund manager. I have the full support of the Badger Fund of Funds and a great network of other fund managers to rely on. I also have my investment committee, and so I have seasoned investors, entrepreneurs, and CEOs that I rely on, as well. And so, I’m very fortunate that even though in some ways I’m new to this area, I have plenty of people around me that are helping with the decisions that we make.

Related story: New Winnow Fund raises $3.5 million

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