Scott Resnick, right, published his data analysis on Medium using numbers from the financial data firm Pitchbook.


The amount of venture capital funding raised by Madison startups dropped considerably in 2017, based on data analysis from one of the city’s startup leaders.

Scott Resnick, a local tech executive and the “entrepreneur-in-residence” for the under-construction startup center StartingBlock, released his findings on the blogging platform Medium on Wednesday night. Based on his analysis of numbers collected by the financial data firm Pitchbook, he calculated that Madison startups raised $77 million in venture capital financing in 2017. Local startups had raised $158 million the year before.

The analysis found that decline at the state level, too. Wisconsin startups raised $116 million in venture capital financing overall, compared to $234 million the year prior.

Even before he saw the Pitchbook numbers, Resnick said he suspected venture capital financing would not be as robust for the area, based on information he’d been collecting about venture capital activity personally.

“At the end of the third quarter, I realized the numbers in Madison are going to be extremely low,” he said.

What has been less clear to Resnick is the reason for the dramatic drop, or whether the drop actually represents a cause for concern.

“What we’re seeing is that tech jobs are still strong in the region itself,” he said. “It may be that we’re in a lull in the cycle.”

By that, Resnick meant that it just happened to be a year in which a large amount of the city’s venture-backed startups happened to be in-between rounds of fundraising.

In his blog post, Resnick also noted that it’s possible that there could be some more negative explanations: that local startups are not“ solving venture-worthy problems,” or that investors are not as keen to invest in Wisconsin companies. Wrote Resnick: “Anecdotally, this does not seem to be the case.”

Venture capital financing is often used as a metric for startup activity in a regional economy, along with other measures like new jobs created or successful “exits” — companies that get acquired or that go public.

Some entrepreneurship analysis groups like the Kauffman Foundation choose to ignore venture capital in their assessment of startup economies, instead focusing on metrics like and startup “density,” and the rate at which entrepreneurs are created. The Kauffman Foundation’s analysis has repeatedly pegged Wisconsin as the worst state in the country for startup activity.

Resnick said he worries that the new findings will contribute to that narrative of Wisconsin's struggle with entrepreneurship, even though the state’s prognosis may be positive in the long run.

“As a community, and throughout the entire state, we are deploying more money into entrepreneurship; however, it may take years before we see the payout of those dollars,” he said.

Resnick's findings come as the city continues to earn recognition for its tech economy, earning a top spot on a recent Brookings Institution ranking of the top 100 tech metros.


Erik Lorenzsonn is the Capital Times' tech and culture reporter. He joined the team in 2016, after having served as an online editor for Wisconsin Public Radio and having written for publications like The Progressive Magazine and The Poughkeepsie Journal.