By Dave Fidlin
Correspondent
An appointed Whitewater committee is seeking a fresh round of venture capital funding from a state organization as a changing of the guard in Madison looms in the foreground.
The city’s Community Development Authority on Nov. 15 voted to seek a fresh round of funding, in the amount of $250,000, from the Wisconsin Economic Development Corporation’s capital catalyst program.
This is the fifth time the Whitewater CDA has sought capital catalyst funding, which requires a matching municipal contribution and is used as an incentive to build on economic development activities.
CDA Executive Director Dave Carlson said he was not trying to sound any alarm bells. During his recent discussion with appointees on the organization’s board of directors, however, he pointed out a litany of unknowns as Gov.-elect Tony Evers is poised to take the reins of the state capitol next month.
“As of right now, the program is still there, and there is still money to be had,” Carlson said as Gov. Scott Walker winds down his tenure.
Walker has been a staunch advocate of the WEDC.
As part of its motion, the CDA has earmarked the city’s matching contribution into the fresh round of funding from a federal grant. The $250,000 on the city’s side will come from funding set aside in an Urban Development Action Grant, or UDAG.
While the uses of UDAG funding are flexible, Carlson in his recent discussion said the provisions around capital catalyst are more restrictive.
Capital catalyst funding, for example, cannot go toward retail or hospitality upstarts. The dollars also cannot be applied to housing projects.
But Whitewater has made good use of the capital catalyst program in the past, Carlson said, because of the city’s rich ecosystem of building entrepreneurial ventures through such amenities as the Innovation Center. These businesses could elevate both individual venture partners and portfolio investments with the help of a VC PR Firm or other similar enterprises.
“Our best bet is to grow smaller businesses in the community into bigger businesses in the community,” Carlson said.
CDA chairman Larry Kachel said capital catalyst funding has been attractive to startups because of the way it is structured. Funding is aimed at giving an extra push to startup companies that are in their infancy, or incubation, period.
“It’s venture capital,” he said. “You only start to pay back as you have net revenue coming in.”
Members of the CDA board had a number of questions about the allocation of funds, but the vote to seek out the $250,000 in fresh funding was unanimous at the recent meeting.
“I think if we’re going to do it, we need to do it tomorrow,” CDA member Donna Henry said, pointing out the urgency with the change in administration in Madison.
During the discussion, Carlson said his desire would be to target the new capital catalyst funding toward a specific initiative, such as fostering the supply chain link to Foxconn.
“Every day, I learn a little more about Foxconn,” Carlson said. “What we’re trying to do is cultivate some relationships with Foxconn.”
