$6 million venture fund to invest in Wisconsin startups

The Winnow Fund will begin investing in Wisconsin-based startups after the state-backed venture capital fund reached its goal of raising $6 million.

The Madison-based Winnow Fund is one of six Badger Fund of Funds, which is Wisconsin’s 7-year-old venture capital program managed by Santa Fe, New Mexico-based Sun Mountain Capital and Stoughton-based Kegonsa Capital Partners LLC.

Managed by Richelle Martin, the Winnow Fund was designed to invest between $6 million and $8 million in startups based on product ideas developed by students, rather than technologies obtained through the patenting and licensing offices at universities.

Although the Winnow Fund can still raise funds, the fund held a commencement close, which means it can start deploying capital. The fund has plans to start investing in Wisconsin-based companies in November.

The Winnow Fund is one of four BFOF actively investing in Wisconsin startups, according to a press release. Unlike other BFOF, the Winnow Fund is not limited by geography and instead focuses on Wisconsin universities.

“Students have great ideas but need someone to guide them through the process of creating a company to commercialize their idea. Richelle Martin’s legal background, know-how, and experience at UW-Madison make her a perfect fit to help student inventors and entrepreneurs create and grow their companies,” Badger Fund of Funds partner Ken Johnson said in a statement.

Martin, who previously led the Office of Industrial Partnerships at UW-Madison, spent two years raising capital for the Winnow Fund. A total of 24 limited partners have invested in the Winnow Fund, which includes investments from six institutions and 18 individual investors.

“Richelle Martin has had a singular focus over the last two years on raising capital and getting this fund launched,” Johnson said in a statement. “Richelle showed extraordinary persistence and grit while not taking any compensation at all because she was so passionate about the need for a fund like this in Wisconsin.”

The Winnow Fund’s lead investors include The Capital Times, Johnsonville Ventures, MGE Energy Inc. as well as Wisconsin-based private equity firms N29 Capital Partners and Inventure Capital.

Martin was initially concerned about raising funds because of COVID-19, but in terms of fundraising, she says the pandemic has been an equalizer, adding that it has been easier to connect with prospective investors.

“As much as people have been hesitant to make significant investment decisions especially early on where the markets were really reactive, I think that it sort of evened out and overall, was a positive experience because people have been understanding and more willing to connect in previously non-traditional ways,” Martin said.

Although Martin drew two investors from Milwaukee County, the BFOF has been hard pressed to find financial backing for its program in Milwaukee County. BizTimes recently provided an update on the BFOF after one if its Milwaukee-based funds, Bold Coast Capital, withdrew its fundraising efforts.