4 huge paydays lay out venture strategy

Four huge cash-outs outside of Dane County, totaling about $1.5 billion, make the case that support for startups in Wisconsin should be statewide and go far beyond biotechnology.

The Madison crowd has garnered about 90% of the state’s venture capital in recent years, but its cash-outs and job creation pale in comparison to what’s happening in the rest of the state.

These four exits tell the story:

  • The most recent is the sale of Ruud Lighting in Sturtevant for $525 million. Now that’s a big payday for the 30-year-old company that has led the world in the application of LED lighting to outdoor applications, such as lighted signage.  Ruud created 750 Wisconsin jobs and will create more under the new ownership, where the entrepreneurial Ruuds still have a piece of the action.
  • In Wisconsin Rapids, Renaissance Learning , which applies information technology to the classroom in 70,000 schools, is selling for between $440 million and $460 million. The company started in a basement in Port Edwards by Judy and Terrance Paul employs 900, including 600 in Wisconsin Rapids.
  • Mortgagebot, a Mequon IT company that streamlines mortgage applications, sold for $232 million. Entrepreneur Scott Happ and his team created 105 high-end jobs.
  • Dr. Comfort, a Mequon company that makes footwear for diabetics, sold for $255 million. Entrepreneur Rick Kantner and his team created 200 Wisconsin jobs.


These ventures created real wealth and significant numbers of jobs, but you can be 100% certain that no venture firm would have touched any one of these deals at the outset. Thus, these conclusions:

* The state needs to pay more attention to a host of smaller startups that have high growth potential than to the sexy biotech deals in Dane County. It’s like Ted Thompson’s strategy with the Packers: garner lots of draft choices and develop the hell out of them. You don’t always know where the winners are going to come from. Play the numbers game.

  • One VC deal in Madison can require $200 million in capital. While it may yield a big technology breakthrough, that will benefit the world and a big payday, at $500,000 apiece, 400 new ventures could be started for the same dough.
  • Entrepreneurs are everywhere in this innovative country. We need to give them systematic support and resources, not the episodic support of the past.
  • Just about every great company in Wisconsin, every great employer, started here. Name the ones that didn’t, and try to get past the fingers on one hand. They were funded here without the geniuses from the coasts.
  • It takes a generation to create a great employer. Only a few spring to full bloom in the time frame that the venture capital experts are looking for.  We in Wisconsin need to take the long view as we launch new ventures.
  • The Ruuds, Pauls, Happ and Kantner are true Wisconsin heroes, and they should be acclaimed as such.
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