Archive for category: BrightStar News

Press Release – Zilber Donation

For Immediate Release – Aug. 20, 2013

BrightStar Wisconsin Foundation opens headquarters, adds staff
Zilber Property Group contributes significant office space

MILWAUKEE – The BrightStar Wisconsin Foundation, a groundbreaking philanthropic approach to supporting job creation and economic growth statewide through investment in early-stage companies, today announced the opening of a Milwaukee office that will serve as its headquarters. Zilber Property Group, a supporter of BrightStar’s approach, has provided the space in its Empire Building at the corner of Plankinton and Wisconsin Avenues in Milwaukee.

The foundation also announced the hiring of its first two employees. Todd Sobotka will serve as the foundation’s portfolio manager. He is the co-founder and owner of multiple companies and served most recently as venture track program director at BizStarts Milwaukee. Fred Raasch will serve as business
manager. Mr. Raasch was most recently a self-employed marketing consultant. The foundation’s two new hires will join CEO Tom Shannon at headquarters.

The foundation anticipates hiring additional staff when it receives a determination letter from the Internal Revenue Service formally recognizing its tax-exempt status. The application seeking that recognition was made on Aug. 6.

“We asked the BrightStar team how we could help ensure their success and providing them office space in our Empire Building seemed to be the first easy step for us,” said Jim Borris, president of Zilber Ltd. “Zilber Ltd. is committed to advancing our economy both in Milwaukee and statewide. We see BrightStar Wisconsin as an innovative approach that will have a significant
impact on those efforts.”

“This contribution by the Zilber Property Group will allow us to direct an even higher percentage of donor dollars to our mission of investing in early-stage companies to fuel job creation,” said Jeff Harris, BrightStar Wisconsin’s cofounder and chairman. “With the Wisconsin Economic Development Corp.’s
grant commitment to us for staffing and Zilber’s contribution of significant office space, the BrightStar Wisconsin Foundation will be able to invest nearly all of our assets in job creation across Wisconsin.”

About the BrightStar Wisconsin Foundation Inc.

The non-profit BrightStar Wisconsin Foundation is using a groundbreaking philanthropic approach to support job creation and economic growth across Wisconsin through investment in early-stage companies. This new approach will enable the formation of new investment capital in Wisconsin through charitable donations to the foundation. Contributions to BrightStar will be tax deductible, assuming receipt of a tax-exempt determination from the Internal Revenue Service. The foundation is filing an application to obtain formal recognition of its status as a tax-exempt organization under section 501(c)3 of the Internal Revenue Code. The organization’s non-profit, tax-exempt status will mean that more of the capital raised can be invested in high-growth, job-creating companies and that virtually all earnings and returns can be reinvested. BrightStar hopes to begin screening companies seeking investment in the fall.

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Albert Nicholas pledges $1 million to BrightStar foundation

Money manager Albert “Ab” Nicholas said Wednesday he has pledged $1 million to BrightStar Wisconsin Foundation Inc., a new group with an unusual plan for using charitable donations to make venture investments in young state companies.

Nicholas, who is founder and chairman of Milwaukee-based Nicholas Co., is the first contributor to be named by BrightStar since the foundation launched in July with seed pledges of $6 million from eight founding donors.

BrightStar’s organizers are hoping the foundation will attract donors who might not otherwise make high-risk investments in the state’s high-tech, high-potential start-up companies. Nicholas, a successful manager of publicly traded stock portfolios, said he has never made the kind of angel and venture capital investments BrightStar is planning.

Making a pledge to the foundation appealed to Nicholas as a way to make a contribution that would help the state grow economically, he said.

“If we can get these small companies to start up and expand and be successful, we’re going to have more opportunities for our citizens — and more opportunities for our kids coming out of college — to have jobs,” Nicholas said. “My return is going to be to help the state and that will be a wonderful return for me.”

Nicholas, an alumnus of the University of Wisconsin-Madison, estimates he and his wife have donated as much as $50 million to their alma mater. In January, Nicholas added to that with the announcement he was launching a $50 million endowment that will provide scholarships for selected high school basketball players to attend University of Wisconsin System schools.

BrightStar hopes to raise at least $60 million over the next three years. To have the impact it is seeking, the foundation will have to reach $150 million or more of assets, said Tom Shannon, who has committed to be the foundation’s unpaid president for three years.

Tax-exempt status

The foundation’s ability to operate as planned hinges on its securing Internal Revenue Service approval for tax-exempt status so donors’ contributions could be tax-deductible. BrightStar plans to file its application this week and should know by the end of August if the IRS is going to give it fast-track status, Shannon said. Fast-track status would mean the IRS would make the determination in about six months, he said.

BrightStar has “a very good chance” of getting approval, Reed Hall, secretary and chief executive officer of the Wisconsin Economic Development Corp., has said. WEDC in late July pledged $300,000 in operating funds to BrightStar, pending IRS approval.

BrightStar plans to invest in young state companies in a variety of high-tech areas such as health care informatics, battery technology, water cleanup, web-based selling and medical devices, said Shannon, who has been an angel investor since overseeing the sale of Prodesse Inc., a Waukesha biotech company, for $72 million in 2009.

Prodesse was one of the state’s 10 most successful exits in the last decade, said Jeff Rusinow, a BrightStar founding donor who was principal investor in BuySeasons.com, a successful online costume retailer, among other companies.

Rusinow said he gets approached two or three times a year by people seeking his involvement in new angel or venture capital funds. Shannon’s idea stood out because of its potential to bring more of the big supporters of the state’s economy into the effort to grow start-up companies here.

“I thought, if the model changes to a charitable one, perhaps that’s the tipping point,” Rusinow said.

Wisconsin has lagged the nation in job growth since the mid-1990s, partly because of its low rate of business starts when measured as a share of all private firms in the state, according to a report released this year by the Wisconsin Taxpayers Alliance.

BrightStar will go slowly in terms of raising money until the IRS determines whether it will have tax-exempt status, Shannon said.

The foundation will have a minimum contribution requirement “in the tens of thousands,” and hopes to attract donations from wealthy individuals, corporations and foundations in Wisconsin and outside of the state, he said.

“We basically need cheeseheads everywhere to have a way to benefit the state they love,” Shannon said. “And what’s more important than having economic activity increase?”

Original Article:

http://www.jsonline.com/business/nicholas-pledges-1-million-to-brightstar-founda…

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Press Release – Ab Nicholas Donation

For Immediate Release

BrightStar Wisconsin Foundation receives $1-million pledge from Nicholas

MILWAUKEE, July 31, 2013 – The BrightStar Wisconsin Foundation, a groundbreaking philanthropic approach to supporting job creation and economic growth statewide through investment in early-stage companies, today announced it has received a $1-million pledge from Albert “Ab” Nicholas, the founder and chairman of the Milwaukee-based Nicholas Co. investment management firm.

“I’m very pleased to pledge my support to BrightStar’s unique approach to supporting job creation in Wisconsin,” Mr. Nicholas said. “I’ve been a proud, active supporter of education in Wisconsin because of the difference my UW education made for me. My commitment to BrightStar is a natural one because it will support the creation of jobs that will keep graduates of our great colleges and universities right here in Wisconsin.”

The BrightStar Wisconsin Foundation was founded recently by eight business leaders and early-stage investors who pledged nearly $6 million to establish it. The foundation expects to raise an additional $60 million during the next three years. Its new, philanthropic approach will enable the formation of
new investment capital in Wisconsin through charitable donations to the foundation.

Assuming BrightStar’s application for 501(c)3 tax-exempt status is approved, contributions to the foundation from corporations, foundations and wealthy individuals will be tax deductible. Because BrightStar is operating as a non-profit, more of the capital raised can be invested. Virtually all earnings and returns from the foundation’s portfolio companies will be reinvested to create additional high-quality jobs and continue to grow Wisconsin’s economy. Donors are not entitled to any return of their contributed capital or any share of BrightStar’s earnings.

“The founders and directors of the BrightStar Wisconsin Foundation are profoundly grateful to Mr. Nicholas for his generous gift and his support of the foundation’s mission and innovative approach,” said Jeff Harris, the foundation’s chairman and an experienced early-stage investor. “We believe our approach, which promotes capital formation through capital donation, will put more capital to work and provide returns that will allow additional investment in companies statewide that are driving Wisconsin’s economic recovery.”

About the BrightStar Wisconsin Foundation Inc. The non-profit BrightStar Wisconsin Foundation is using a groundbreaking philanthropic approach to support job creation and economic growth across Wisconsin through investment in early-stage companies. This new approach will enable the formation of new investment capital in Wisconsin through charitable donations to the foundation. Contributions to BrightStar will be tax deductible, assuming receipt of a tax-exempt determination from the Internal
Revenue Service. The foundation is filing an application to obtain formal recognition of its status as a tax-exempt organization under section 501(c)3 of the Internal Revenue Code. The organization’s non-profit, tax-exempt status will mean that more of the capital raised can be invested in high-growth, job-creating companies and that virtually all earnings and returns can be reinvested. BrightStar hopes to begin screening companies seeking investment in the fall

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State pledges $300,000 to support BrightStar Wisconsin Foundation

Wisconsin Economic Development Corp. would provide operating funds to venture capital vehicle

Wisconsin Economic Development Corp. has pledged $300,000 in operating funds for BrightStar Wisconsin Foundation Inc., a new group that is proposing an unusual plan for raising donations to make venture investments in young state companies.

“The nonprofit BrightStar will provide opportunities for philanthropists to support the growth of Wisconsin entrepreneurs,” said Reed Hall, secretary and chief executive officer of WEDC, the state’s economic development agency. “This is an innovative investment resource to leverage additional private funding dedicated to helping early-stage Wisconsin companies grow and succeed.”

BrightStar plans to send an application in the next few weeks to the Internal Revenue Service to get tax-exempt status. WEDC would provide the money if the foundation got that status, which is critical to the plan for raising funds from wealthy individuals, companies and foundations. Hall has said BrightStar has “a very good chance” of getting approval.

WEDC will have representation on the foundation’s board. As a condition of receiving investments from the fund, WEDC will require companies — for five years after receiving a BrightStar investment — to provide information about employment, salaries and wages, and any other funding they have received.

BrightStar also plans to provide WEDC with information about the investments it makes, said Tom Shannon, who has committed to run the foundation for three years for free. But the foundation hopes to expand beyond the required information and develop indexes to show how well it is performing, he added. One such index might be some sort of “job power index,” Shannon said.

“The main think is we want to know what’s happening with (full-time equivalents) at the end of each year,” he said.

That might not be as simple as it sounds. For example, would it be better to create more jobs with a lower median wage, or fewer jobs with a higher median wage?

“We’d like to monitor a number of inputs over the years and see if we can get some data that makes some sense to help us understand where best to invest for jobs,” Shannon said.

Hall said WEDC was approached in January by Shannon. The agency decided to provide support based on the soundness of the plan, the experience Shannon and the other founding donors have in raising private capital for their own companies, and the amount of time Shannon has volunteered to get the fund established.

BrightStar plans to invest donors’ money in young companies in high-growth, technology-related industries such as information technology, biotech, nanotech, cleantech and medical devices.

Shannon and seven other founding donors have pledged at least $500,000 each, for a total of $6 million, to seed the foundation. They have said they hope to raise at least $60million more over the next three years.

Original Article:

http://www.jsonline.com/business/state-pledges-300000-to-support-brightstar-wisc…

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WEDC pledges $300,000 to BrightStar Wisconsin Foundation

BrightStar Wisconsin Foundation Inc., a new Milwaukee organization that will invest in Wisconsin technology startups and is seeking nonprofit status, has received a $300,000 pledge from the Wisconsin Economic Development Corp.

The WEDC investment will go toward BrightStar operating expenses and is meant to help BrightStar attract private donations to spur business growth and job creation, a Monday press release said.
BrightStar will receive the WEDC funds after it has achieved 501(c)3 status from the Internal Revenue Service, WEDC said.

“The nonprofit nature of BrightStar will provide opportunities for philanthropists to support the growth of Wisconsin entrepreneurs,” said Reed Hall, WEDC secretary and CEO. “This is an innovative investment resource to leverage additional private funding dedicated to helping early-stage Wisconsin companies grow and succeed.”

WEDC representatives will sit on the foundation’s board.

WEDC will require companies receiving BrightStar investments to provide the foundation with information on employment, salaries and wages and capital leverage periodically for five years after receiving the investment. BrightStar will also report to WEDC about the investments it awards, WEDC said.
Hall said BrightStar co-founder Tom Shannon, who has signed on as the foundation’s unpaid leader for three years, approached WEDC in January with the concept.

Hall said WEDC threw its support behind BrightStar because of the “soundness of the plan,” the co-founders’ experience in raising private capital for their own companies and the time Shannon has volunteered to establish the fund.

The co-founders have pledged nearly $6 million to the foundation and expect to raise another $60 million in three years. To read more about the co-founders, click here. To read a Q&A The Business Journal conducted with Shannon, click here.

Original Article:

http://www.bizjournals.com/milwaukee/news/2013/07/22/wedc-pledges-300k-to-bright…

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Helping young companies — creatively

BrightStar Wisconsin aims to persuade the wealthy to donate to a very important cause: Wisconsin’s economy

There is a famine of risk capital for young companies in Wisconsin, which is the biggest reason that good ideas that could lead to jobs are going hungry in this state. Sluggish job growth is a perilous trend that threatens the state’s well-being now and especially in the future.

That’s why we’re so intrigued by a creative venture from Tom Shannon, the entrepreneur and angel investor who oversaw the 2009 sale of the Waukesha biotech firm Prodesse Inc. for $72 million.

His BrightStar Wisconsin Foundation Inc. proposes to invest donors’ money in high-growth, technology-based companies across the state. We hope BrightStar succeeds.

This matters because most new jobs are created by young companies. Established businesses are important — this region would be far poorer without the likes of Johnson Controls, Northwestern Mutual and Rockwell Automation. But if a state isn’t creating new companies, it’s probably not creating many new jobs. Exhibit A for this assertion is Wisconsin.

Wisconsin was among the worst-performing states in the nation for entrepreneurial activity in the past 10 years, reports the Kauffman Foundation. The state’s job growth has lagged the nation for at least 15 years, and part of the reason surely is the state’s abysmal record for launching new companies. The state’s rate of business starts as measured as a share of all private businesses was just 2.2% in 2011, far below the 2.9% national rate and next to last among the 50 states.

Shannon’s idea: Create a philanthropic incentive for the wealthy to fund start-ups in Wisconsin. They won’t be “investors.” They’ll be “donors.” They won’t get a “return.” They’ll get the “satisfaction” of knowing that they are giving back to their state and helping to create jobs. And, oh yes, they will get a break on their federal taxes. That, in a nutshell, is the idea behind BrightStar.

Shannon and seven others have pledged at least $500,000 each and raised $6 million so far. They hope to raise at least $60 million more over the next three years, and the goal is to reach $150 million or more of assets, Shannon said.

“This could be our last kick at the can,” Jeff Rusinow, a founding donor, told the Journal Sentinel’s Kathleen Gallagher. He was principal investor in BuySeasons.com, a successful online costume retailer, among other companies. “This is a special opportunity to get it right.”

Will it work? Shannon and the team brim with confidence. But BrightStar needs the Internal Revenue Service to sign off on that tax break — and then its founders need to do the hard spade work of persuading wealthy people with ties to Wisconsin that they should do something charitable for their home state without any hope of a monetary return.

“We’ll never have enough angels, and we’re not going to get the state money because we’re frugal, and that leads to the philanthropic model because Wisconsinites have proven to be extremely generous,” Shannon told Gallagher.

It’s also clear to us that, unlike in states such as Ohio or Colorado, the public purse is unlikely to ever be much of a solution. In its last session, the Legislature passed a bill to raise $25 million for a “fund of funds” that will invest in angel and venture capital funds that will, in turn, invest in young Wisconsin companies (Gov. Scott Walker signed the bill into law on Thursday).

That’s a positive development, but $25 million is a pittance. Much more was needed. On top of its penuriousness, the Legislature, to appease some conservatives, exempted biotech — an area of deep expertise for the University of Wisconsin-Madison. It was a decision that only made sense to the ideologues.

So it’s obvious that the state’s entrepreneurs cannot count on the Legislature no matter how many arms are broken patting pols on the back.

Of course, they shouldn’t count only on Shannon, either.

Even if BrightStar succeeds in raising $150 million, that’s still only part of what needs to happen. We think a slightly larger commitment to economic growth from several of the bigger pots of money in the state — including the State of Wisconsin Investment Board, the Wisconsin Alumni Research Foundation and the University of Wisconsin Foundation — would help. It also would help if WARF was better at creating start-up companies

Wisconsin does not lack for good ideas. Its research universities, led by the flagship UW campus in Madison, are powerhouses. Its private companies produce a wealth of patents. What the state lacks is enough money to commercialize some of the best ideas. This may be the single most important variable that will determine whether children growing up in Wisconsin today decide to stay in Wisconsin when they come of age.

BrightStar is a creative idea that may be able to pry open the wallets of wealthy ex-Badgers around the country, in places such as Silicon Valley and Boston. We hope so. It’s not too strong of a statement to say that the kind of state Wisconsin becomes will depend upon efforts such as BrightStar.

Original Article:

http://www.jsonline.com/news/opinion/helping-young-companies–creatively-b995734…

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A bright idea for job growth

It’s time to lead instead of falling further behind

For at least two years now, headlines and editorials have all sounded the same theme: “State lags nation in job growth.”

Thought leaders such as Tom Still of the Wisconsin Technology Council; Dan Steininger of BizStarts; Julia Taylor of the Greater Milwaukee Committee; and entrepreneur John Torinus have eloquently and repeatedly cited irrefutable data to lay out the problem and the solution:

We need to get more companies started in Wisconsin, and to do that we need more access to capital invested in early-stage, high-growth companies.

Why isn’t this job-creating capital investment happening in Wisconsin?

We have the ideas. Our universities have some of the largest R&D budgets in the country. We have the brainpower. Generous wealthy philanthropists and foundations are donating hundreds of millions of dollars for education through scholarships, naming rights, discovery centers and facilities. We have a proliferation of ideas and an educated workplace to implement them into scalable businesses.

Public-sector capital formation is not my forte, but I have listened intently to the numerous proposals for public investment in job creation. After all the talk of declining state budgets, “fund of funds” vs. CAPCO, and with the political wrangling around the issue, it is apparent that meaningful investment just isn’t going to come from Wisconsin’s public sector.

Only $25 million of the state budget is earmarked for potential deployment to high-growth companies, and the odds are slim that even that amount will find its way to where it is truly needed. Colorado, on the other hand, just announced the launch of a $150 million venture fund to invest in local start-ups — and that is small compared with some other states’ initiatives.

We are quickly falling further behind.

Private-sector, early-stage capital formation usually involves investors who band together as angels in groups. They are willing to attend investor pitches, share due diligence, are not rattled by seeing greater than 50% of their investments fail and will wait five to seven years for a return. This is ground zero for job creation in Wisconsin, and we need many more angel groups to get companies off the ground.

These people can be supported and encouraged by us, but they are not easy to clone in large volume. Solely relying on private sector venture funds or angel investments is not the solution to our problem of creating more job-producing companies.

What then is the solution? Can we change the course of a state we all love? I think we can. Here’s how:

Seven of my colleagues and I see only one game-changing way: to do it ourselves in the private sector, without taxpayer dollars. The solution is to call on Badgers throughout the world who care about Wisconsin to come to its aid by changing the discussion from an investment discussion to a charitable discussion.

For this specific purpose, eight of us have created the BrightStar Wisconsin Foundation as a 501(c)(3) entity and have pledged nearly $6 million of our own money to get the ball rolling. These permanent donations will be owned by the foundation and invested directly into early stage businesses. There will not be fees or carried interest.

Through our extensive cumulative investment backgrounds, we will work with local angels and venture firms to identify opportunities and invest with them. Our eventual proceeds will come back to the foundation to be reinvested again and again. Think of the possibilities. As the foundation grows large, we can add additional services.

We are calling for assistance from the same wealthy individuals, corporations and foundations that already are making a difference in education to earmark part of their future donations for creating jobs via BrightStar. You know who you are. We need your help. By allocating a portion of your charitable donations to this job creation solution, we will be able to commercialize more good ideas, create more jobs for our graduates and create a more vibrant state.

This solution is novel, but also simple and obvious. It can put us back in the lead instead of the alternative — falling further behind.

Original Article:

http://www.jsonline.com/news/opinion/a-bright-idea-for-job-growth-b9950821z1-215…

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Wisconsin business leaders form new investment group

Eight business leaders and investors have joined together to create the BrightStar Wisconsin Foundation, a new nonprofit vehicle for investing in early-stage companies.

The eight have pledged to contribute a total of nearly $6 million to set up the philanthropic foundation, and they expect it to raise another $60 million over the next three years.

Donors will not get any return on their investment; the nonprofit organization will pump nearly all of its earnings and returns back into young companies to create more jobs and grow the economy.

“Our unique approach with BrightStar is focused on creating high-paying jobs,” said co-founder Tom Shannon, who will lead the foundation. “BrightStar will go a long way to help fill the significant gap of more than $250 million in Wisconsin between the need for and the availability of early-stage capital that supports job creation.”

Shannon was chief executive of Prodesse, a Waukesha company that developed molecular diagnostic tests for flu. Prodesse was purchased in 2009 for $72 million by Gen-Probe, of San Diego, which is now part of Massachusetts-based Hologic.

Other BrightStar Wisconsin Foundation co-founders include Mark Burish, partner with the Hurley, Burish & Stanton law firm in Madison and board chairman of Sonic Foundry, and Mike Shannon, a UW alumnus and managing director of KSL Capital Partners, a private equity firm in Denver and New York. KSL unsuccessfully bid against Apollo Global Management to buy Great Wolf Resorts of Madison last year.

Original Article:

http://host.madison.com/wsj/business/wisconsin-business-leaders-form-new-investm…

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BrightStar Wisconsin Foundation to invest donations in startups

Eight business leaders and early-stage investors are forming an unusual type of investment capital group: a nonprofit that will spur startups and job creation statewide through charitable donations.
The co-founders have pledged nearly $6 million to establish BrightStar Wisconsin Foundation Inc., Milwaukee, and they expect to raise another $60 million over the next three years.

The group is currently seeking 501(c)3 tax-exempt status and its founders hope to begin screening companies in the fall.

The formation of BrightStar comes after other recent announcements of initiatives to invest in startups, including a $25 million venture capital bill passed by the state Legislature and a $30 million venture capital fund formed by the State of Wisconsin Investment Board and Wisconsin Alumni Research Foundation.

Tom Shannon, a veteran early-stage investor who was CEO of Waukesha-based Prodesse Inc. until its 2009 acquisition by global biotechnology company Gen-Probe Inc. for $72 million, will lead the foundation as a volunteer.

The group wants to reverse Wisconsin’s meager capital investment track record. The state’s early-stage investments increased more than 6 percent last year to $162.3 million, but it ranks in the middle of the pack for venture capital investments, according to a recent report from the Madison-based Wisconsin Angel Network. This despite Wisconsin performing better on a per-capita basis than most states in patents, academic research and development spending, the group said.

Angel investing is also picking up steam, partly aided by a state tax credit, but BrightStar said “new investment approaches must be created because many wealthy individuals, corporations and foundations are not inclined to participate in for-profit angel and other early-stage investing.”

If the Internal Revenue Service approves BrightStar’s nonprofit status, donors’ contributions would be tax deductible, more of the capital it raises will go toward investments and virtually all earnings from portfolio companies would be re-invested to feed more job creation and economic growth, BrightStar said.

Donors would not receive any return from their contributions or any share of BrightStar’s earnings.

“Our unique approach with BrightStar is focused on creating high-paying jobs,” Shannon said in a written statement. “BrightStar will go a long way to help fill the significant gap of more than $250 million in Wisconsin between the need for and the availability of early-stage capital that supports job creation.”

The Wisconsin Economic Development Corp. applauded BrightStar’s “innovative” model.

“Capital formation, particularly for investment in early-stage companies, continues to be an ongoing, statewide problem in Wisconsin,” said Reed Hall, WEDC secretary and CEO, in a written statement.

The other BrightStar co-founders are:

  • Mark Burish, a partner in Hurley, Burish & Stanton law firm, Madison, and chairman of Sonic Foundry Inc., Madison.
  • Michael Drescher, co-founder and CEO, Okanjo Partners Inc., Milwaukee.
  • Susan Shannon Engeleiter, president and CEO of Data Recognition Corp., Maple Grove, Minn., and a former U.S. Small Business Administration official and Republican Wisconsin state senator. She is Shannon’s sister and holds bachelor and law degrees from University of Wisconsin-Madison.
  • Jeff Harris, investor and director of Somna Therapeutics Inc., Shamrock Energy Corp. and Okanjo Partners, all Wisconsin early-stage companies.
  • George Mosher, Milwaukee super angel investor and former owner of National Business Furniture, Milwaukee.
  • Jeff Rusinow, angel investor and founder of Silicon Pastures, Milwaukee’s first angel network.
  • Mike Shannon, managing director of private equity firm KSL Capital Partners LLC, Denver. The UW-Madison alum is the brother of Tom Shannon and Susan Shannon Engeleiter.

Original Article:

http://www.bizjournals.com/milwaukee/news/2013/07/10/brightstar-wisconsin-founda…

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Press Release – New Company Announcement

For Immediate Release

Business leaders, early-stage investors announce formation of BrightStar
Wisconsin Foundation to support job creation, economic growth in state

MILWAUKEE, July 10, 2013 – Eight leading business leaders and early-stage investors today announced the formation of the BrightStar Wisconsin Foundation Inc., a groundbreaking philanthropic approach to supporting job creation and economic growth statewide through investment in early-stage companies. This new approach will enable the formation of new investment capital through charitable donations to the foundation.

Tom Shannon, an experienced early-stage investor who was chief executive of Prodesse Inc. until its 2009 acquisition by global biotechnology leader Gen-Probe Inc. for $72 million, will lead the foundation on a volunteer basis. Mr. Shannon and seven co-founders have made pledges totaling nearly $6
million to establish the foundation. The foundation expects to raise an additional $60 million during the next three years.

The poor track record of capital formation and investment in job-creating young companies in Wisconsin is well known. The Badger state ranks in the middle of the pack for venture capital investment, despite the fact that it consistently outpaces most other states in patents and research and development
spending on a per-capita basis. Angel investing in the state has begun to accelerate, but new investment approaches must be created because many wealthy individuals, corporations and foundations are not inclined to participate in forprofit angel and other early-stage investing.

In an effort to support job creation across Wisconsin, the BrightStar Wisconsin Foundation is in the process of filing an application with the Internal Revenue Service for 501(c)3 tax-exempt status. Assuming BrightStar’s application is approved, contributions to the foundation from corporations, foundations and wealthy individuals will be tax deductible. Because BrightStar is operating as a non-profit, more of the capital raised can be invested. Virtually all earnings and returns from the foundation’s portfolio companies will be reinvested to create additional high-quality jobs and continue to grow Wisconsin’s economy. Donors are not entitled to any return of their contributed capital or any share of BrightStar’s earnings.

“Our unique approach with BrightStar is focused on creating high-paying jobs,” Mr. Shannon said. “We’re doing it through a philanthropic model that promotes capital formation through capital donation, puts more contributed capital to work and reinvests almost all of the returns in companies statewide that are driving Wisconsin’s economic recovery. BrightStar will go a long way to help fill the significant gap of more than $250 million in Wisconsin between the need for and the availability of early-stage capital that supports job creation.”

Mr. Shannon is joined by the following seven business and investment leaders as a co-founder of the BrightStar Wisconsin Foundation.

  • Mark Burish, partner, Hurley, Burish & Stanton law firm; chairman of the board, Sonic Foundry Inc.
  • Michael Drescher, co-founder and chief executive, Okanjo Partners Inc.
  • Susan Engeleiter, president and chief executive officer, Data Recognition Corp. former administrator, U.S. Small Business Administration
  • Jeff Harris, investor and director, Somna Therapeutics Inc., Shamrock Energy Corp. and Okanjo Partners Inc., all Wisconsin early-stage companies
  • George Mosher, Milwaukee super angel investor; former owner National Business Furniture
  • Jeff Rusinow, angel investor and founder, Silicon Pastures, Milwaukee’s first angel network
  • Mike Shannon, managing director, KSL Capital Partners LLC, a private equity firm

“The Wisconsin Economic Development Corp. applauds BrightStar’s innovative early-stage investment approach,” said Reed Hall, secretary and chief executive of WEDC. “Capital formation, particularly for investment in earlystage companies, continues to be an ongoing, statewide problem in Wisconsin. BrightStar’s unique model supports WEDC’s mission by engaging new investors and increasing the total amount invested in early-stage companies each year.“

About the BrightStar Wisconsin Foundation Inc.

The non-profit BrightStar Wisconsin Foundation is using a groundbreaking philanthropic approach to support job creation and economic growth across Wisconsin through investment in early-stage companies. This new approach will enable the formation of new investment capital in Wisconsin through charitable donations to the foundation. Contributions to BrightStar will be tax deductible, assuming receipt of a tax-exempt determination from the Internal Revenue Service. The foundation is filing an application to obtain formal recognition of its status as a tax-exempt organization under section 501(c)3 of the Internal Revenue Code. The organization’s non-profit, tax-exempt status will mean that more of the capital raised can be invested in high-growth, job-creating companies and that virtually all earnings and returns can be reinvested. BrightStar hopes to begin screening companies seeking investment in the fall.

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BrightStar Wisconsin logo

GeneralInfo@brightstarwi.org

414-224-6000

710 N. Plankinton Ave., Ste. 340
Milwaukee, WI 53203