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.