Commerce head says state needs new businesses
11:05 PM 10/27/03
Judy Newman Business reporter

MILWAUKEE - Wisconsin ranks 47th among the 50 states in entrepreneurial activity and that has to change, Wisconsin Commerce Secretary Cory Nettles said Monday. <

"We just don't have enough people starting new businesses," Nettles told a workshop at Wisconsin Economic Summit IV at the Midwest Airlines Center. <

It's not for lack of interest. Erica Kauten, director of the UW-Extension Small Business Development Center in Madison, said her organization has sent more than 1,500 people through classes on how to prepare a business plan over the past year and a half. <

But entrepreneurship doesn't happen overnight, Kauten said. "It takes time for it to grow." <

Peter Zaballos, of Frazier Technology Ventures of Seattle, said Wisconsin is "technology rich and underserved" by venture capital. Frazier will take $45 million from the state Investment Board and pump it into Midwest technology businesses. The Robert W. Baird & Co. investment firm in Milwaukee will manage another $45 million from the board, also for technology companies. <

Zaballos said since he started working in Madison in August, he's looked at about 35 companies; of those, three have products generating revenue. <

"I've been pleasantly surprised with the breadth and depth of what I saw," said Zaballos, Frazier's Midwest vice president. "There's an abundance of companies with strong technologies," not only biotechnology but also software technology, which came as a surprise to the West Coast firm. But mostly, Zaballos said, potential entrepreneurs in Wisconsin are hungry for advice. <

Frazier Technology Ventures plans to open an office in Madison; Zaballos is temporarily lodged with the Foley & Lardner law firm. <

Setting up a Midwest hub was "a sound decision, ahead of the curve," he said. "Because we really like what we see here." <

But Zaballos said Wisconsin is lacking two important things: investment capital and experienced technology business executives. Wisconsin gets 6 percent of venture capital nationwide - money that's used to help promising ideas go commercial or to give a small company a chance to grow. <

Zaballos wants to bring people to Wisconsin from coastal venture firms to serve as "critical enablers" to help develop companies here. <

Kris Martinsek, who owns a Milwaukee consulting firm, asked the panel what the state is doing to help people who want to start businesses that have nothing to do with technology. "It shouldn't be either/or; it should be both," she said. <

"The fastest growing businesses - they're not technology. It's Starbucks. It's someone who's figured out a way to sell a 25-cent cup of coffee for $3," said Martinsek, recently named by Gov. Jim Doyle to chair the Wisconsin Women's Council. <

The economic summit continues today.