MILWAUKEE — Startup businesses could get some help from a new nonprofit foundation in Wisconsin, where the number of angel investors is lower than in many other states.
Eight investors led by businessman Tom Shannon announced the formation of BrightStar Wisconsin Foundation, Inc., on Wednesday. Shannon and BrightStar's seven other founding donors have pledged $500,000 each to seed the foundation. The investors are hoping to raise at least $60 million over the next three years.
BrightStar would seek tax-deductible donations from companies, foundations and individuals rather than ask them to take an investment risk that could tie up their money for a long time. Aside from the tax breaks, donors will not receive any return on their contributions.
"It's a challenge, and I think that my group of founders and I are uniquely positioned to get it done," said Shannon, who oversaw the sale of Prodesse Inc., a Waukesha biotech company, for $72 million in 2009. Shannon said he will be the foundation's unpaid president and chief executive officer for three years.
The foundation still needs approval from the Internal Revenue Service for tax-exempt status so that donations can be tax deductible, according to the Milwaukee Journal Sentinel (http://bit.ly/12kjQIF ). The investors plan to file an application with the IRS by Aug. 1 and will ask that it be given priority, Shannon said.
"Hopefully we'll be able to vet business plans by mid-fall and invest money by early 2014," Shannon said.
A report released recently by the Wisconsin Taxpayers Alliance said Wisconsin has lagged behind the nation in job growth since the mid-1990s, partly because of its low rate of business startups. That rate averaged 2.2% in 2011, well below the national average of 2.9% and ranking Wisconsin 49th in the country, ahead of only Iowa.
Other states have a larger number of angel investors funding early stage companies or state funding that is driving more investment, Shannon said.
