Jun. 4–Wisconsin entrepreneurs looking for money could stand to polish the pitches they take to investors.

Some approach investors who don’t specialize in that industry. Others seek investment from investors who back more mature companies when what they really need is a firm that works with early-stage start-ups.

Far too often, after reading a company’s business plan, venture capitalist Scott Button says he isn’t certain “what in the heck they are doing.”

“Clearly articulate your product and service,” he told more than 300 people attending the Wisconsin Entrepreneur’s Conference in downtown Milwaukee. Button is a partner with Venture Investors in Madison.

The two-day conference was designed to inspire entrepreneurs with success stories and provide guidance about how to get their companies started and moving forward.

“Some entrepreneurs don’t know what resources are available,” said E. Kelly Hansen, chairwoman of the conference.

Wisconsin regularly is lauded as a hub of innovation. University laboratories are among the most prolific in the country at cranking out technology discoveries and obtaining patents.

Yet the state clearly lags when it comes to other measures of its economic sector with the potential for rapid growth and good-paying jobs.

Obtaining venture capital and other sources of funding for young companies remains as one of the state’s greatest challenges, said Tom Still, president of the Wisconsin Technology Council.

“There probably is no silver bullet for solving Wisconsin’s venture capital problem,” Still said.

Wisconsin companies raised about $65 million last year from venture capital investors, according to the PricewaterhouseCooper/Venture Economics/NVCA MoneyTree Survey.

Venture investing was down across the country, but Wisconsin lagged far behind even neighboring Minnesota, where companies raised more than $326 million in 2002.

Six venture capitalists who are active in Wisconsin and the surrounding region said they are looking for deals. Each firm specializes in different types of technology and provides differing sizes of investments.

Entrepreneurs would be well advised to check the Web sites of the venture firms and consult with attorneys, accountants or other experts to find the investors most likely to be interested, Still said.

“Entrepreneurs need to hone their pitch and do their research,” Still said.

Venture investors want to see companies that can describe what product or service they are selling, how many customers want to buy it and why they have an edge over other companies that might be trying to do the same thing.

“The first thing we look for is a clear mission of what the company is doing,” said Peter Zaballos, who is setting up a new Madison office for the Seattle-based Frazier Technology Ventures.

Companies often make claims about having the best product or service, but the ones more likely to raise money from investors will be able to quantify and demonstrate why they are different and superior from competitors, said Paul Carbone, managing partner of Baird Venture Partners.

Many investors are much more wary and careful than they were during the height of the now burst technology bubble, Carbone said.

“During the Internet heyday, there were a lot of me-too companies,” he said.

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(c) 2003, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News.