Tech and Biotech: More venture firms are making their way to the Midwest

2012-10-19T21:00:00Z Tech and Biotech: More venture firms are making their way to the MidwestJUDY NEWMAN | Wisconsin State Journal | | 608-252-6156

Maybe the Midwest is not so much of a fly-over zone for investors any more.

A Silicon Valley venture capital firm came to Madison a week ago to talk to some promising local tech companies. Meanwhile, two West Coast venture firms announced plans recently to open Midwest offices.

Artiman Ventures, of East Palo Alto, Calif., met with about half a dozen companies at the offices of the Wisconsin Technology Council in Madison, council president Tom Still said.

“That sort of informal traffic appears to be on the upswing,” Still said. “Venture firms from elsewhere are either putting down roots in the Midwest or simply trying to make some more in-depth visits.”

In the category of planting Midwest roots, New Enterprise Associates (NEA), of Menlo Park, Calif., said this week it will open a Chicago office. NEA has $13 billion in committed capital and has an active portfolio of more than 265 companies in information technology, health care and energy technology. In Chicago alone, NEA has pumped more than $300 million into 20 companies, including Groupon.

NEA’s announcement follows a decision by Versant Ventures over the summer to locate a representative in the Twin Cities.

It’s all good news, says Scott Button, a managing director of Venture Investors, a Madison firm that focuses on early investments in technology companies.

“It’s a real plus to have these offices in the Midwest,” Button said. “Generally speaking, the more capital we can attract to the Midwest, the better.”

Both NEA and Versant Ventures are well-known and respected firms, Button said.

Versant was one of the investors in OpGen, a genome mapping company that got its start in Madison, but later moved much of its operations to Gaithersburg, Md.

NEA’s investments include Life Technologies, which has offices at University Research Park and was once Madison tech company PanVera, a few acquisitions ago.

“I think it’s clear that these (venture) firms realize there are some exciting technologies here and some good deals,” Still said.

Studies have shown Wisconsin has strong networks of angel investors, or wealthy individuals who engage in small, early investments either as a group or individually.

But for big-time venture capital, Wisconsin gets about 0.5 percent of the total invested nationwide.

“We’re a long ways from a balance but I’d like to think that the number of promising deals that are in Wisconsin are going to help us attract more venture over time,” Still said.

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