Judith Paul created Accelerated Reader in the basement of her home in Port Edwards, Wisconsin about a quarter century ago, and it sold last week for $440 million. Who says all the startup action is on the coasts?
In addition to the wealth creation, which will certainly spill over to other investments in central Wisconsin, Renaissance created 900 jobs, of which 600 are in Wisconsin Rapids, a community that suffered the loss of papermaking jobs as that industry consolidated.
It usually takes a generation to grow an entrepreneurial business into a robust firm like Renaissance, but the sweat equity contributed by Paul and her husband Terrance and the capital invested were worth it. Many more jobs were created by smaller businesses down its supply chain as this gazelle gained full speed.
Other lessons from the Renaissance success:
1. Entrepreneurs are everywhere in America; they are not confined to Dane County. Hence, the emerging proposal for a state supported venture initiative needs to look across the state for good deals to finance.
2. Her first product, software and hardware for assessing reading progress of students, might not have caught the attention of venture capitalists. Ergo, the new fund of funds in Wisconsin needs to be agnostic to the sectors of investment. There are good deals beyond bio-technology.
3. The big payoff for the citizens of the state is not the wealth creation, which certainly helps the business climate, but the job creation. Note: bio-tech firms are not always big employers.
4. The headquarters or the company will stay here, because the private equity fund making the acquistion will not want to lose the human talent that built the company. Information technology companies can be based almost anywhere. We will lose some acquired companies, but most will stick here.
5. We as a state need to celebrate these wins. Such victories are right up there with Super Bowl 45.