For our businesses to succeed, we need people working so they can afford to buy our products and services.
As our state struggles to create more new jobs, it is helpful to ask: where do most new jobs come from? And more importantly, how do we make sure Wisconsin creates the jobs we need to ensure a strong economy, now and in the future?
The often-quoted 2010 Kauffman foundation study concluded that startup companies provide the most new jobs. But what that study did not tell us was how many startup companies fail.
Although gross job creation is high for smaller firms (100 or fewer employees), so is job destruction. Slowly, researchers are coming to the conclusion that small businesses do create a lot of new jobs, but the high failure rate of these businesses suggests lower. What is just as instructive is that of the hundreds of thousands of businesses launched annually, less than 1 percent receive venture financing.
So what do all these facts tell us about the current efforts at job creation in Wisconsin? The legislature created a $25 million early stage venture fund. But betting the bank on the new state-sponsored venture fund is like betting on an NFL quarterback who completes less than 1 percent of his passes. (With that said I still fervently believe VC and angel investment are critical because their “Hail Mary” wins are big time successes. Wisconsin has to be in the game.) Therefore, BizStarts Milwaukee has expanded its focus to help not only “gazelles” – potential high-growth companies – but also those companies that create 10, 20, 50 or 100 jobs that we call “deer.”
Another major barrier to job creation is that our region and the State of Wisconsin have lacked a one-stop collaborative entity in which major players from academia, business and fi nance can offer their intellectual horsepower and advice to accelerate new company growth.
On April 10, BizStarts, as part of its grand opening in its new offices, unveiled the BizForge Resource HUB. It will be Wisconsin’s first collaborative endeavor that brings together virtually all of the players and resources necessary for an entrepreneur or a business leader of a growing company to succeed. The underlying theory is that the wisdom of experts has a far better chance of providing what entrepreneurs business leaders need to succeed in the world of innovation.
We have learned that entrepreneurs need hands-on, individualized coaching from our staff and network of seasoned and successful business leaders who work individually with each entrepreneur. Historically, forges were used to shape metals into usable functional products that helped fuel the Industrial Revolution. The BizForge will literally be a central hub to forge new businesses.
We have three dedicated offices within BizForge that will offer essential resources and coaching from our partners:
The Academic Resource Office
» UW-Whitewater’s WISC and Technology Park Innovation Center, which offers product market assessments.
» UWM’s SBDC, which provides experienced business mentoring.
» UWM’s business-friendly faculty and staff across multiple departments, to assist in everything from initial business research and product testing to resolving technology challenges.
» MSOE’s Rapid Prototyping Center and the Fluid and Power Institute.
» Waukesha County Technical College Small Business Center.
The Money, Management & Operations Office
» Manpower’s Right Management and Management Resources Association, to assess business teams and supply talent.
» Sources of debt financing that include partner banks, credit unions, WWBIC, the SBA, MEDC and more.
» JVS Construction Services, for those wanting to build facilities.
» MMAC’s COSBE to give feedback and mentoring from business leaders.
The Deal Room for negotiating equity investment in the companies that are investor-ready:
» The law fi rms of Whyte Hirschboeck Dudek S.C. and Michael Best &Friedrich LLP for legal advice.
» The accounting firm of Ernst & Young LLP for accounting advice.
» American Family Insurance for insurance advice.
» The BizStarts Investor Forum of accredited investors.
» Major sources of early-stage investing including: Silicon Valley Bank, BrightStar Wisconsin, Wisconsin Super Angels, Marquette Golden Angels, Silicon Pastures, Capital Midwest Venture Fund.
There is more than $300 million worth of academic research in this region that has the potential for commercialization. Our partners have agreed to work with BizStarts to identify those opportunities and use our resources to help them get to market. That list will grow. A professor creating innovative technology is a fabulous accomplishment. But that does not mean that product or creation will ever get to market. Entrepreneurs need to be taught a go-to-market strategy and the process of customer acquisition that produces real revenues that in turn grows new companies that create jobs.
All of the key people on our staff and on our board of directors have started, led or grown a successful business enterprise. Entrepreneurs learn from savvy business leaders who’ve walked in their shoes. Again, this is hard work. But we have no choice but to succeed if jobs are to be created for this generation and generations to come.