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.