By Ryan Ekvall | Wisconsin Reporter
MADISON ? Venture Capital?
That?s so 1999.
State Sen. Alberta Darling, R-River Hills, thinks it?s time venture capital had a new handle.
How about ?investment capital?? Yeah, that?s the ticket.
?Well, I think we changed the issue of venture capital to investment capital,? Darling said.
The senator said she believes ?most people don?t understand that?s the way to invest in jobs.?
Is ?investment capital? the New Coke of taxpayer-subsidized business development?
You say venture, she says investment. What?s in a name? Marketability.
Ah, the power of branding. When Coca-Cola wasn?t selling in the 1980s, the marketing team developed ?New Coke.? When that didn?t sell, they went with ?Coca-Cola Classic.? Instant success after profound failure.
?It?s not an unusual technique to use new and different terminology for the same program,? said Paul Gibler, a lecturer at the University of Wisconsin-Milwaukee Business School. ?Certainly in the political arena people do approach their nomenclature with a technique of putting the best spin on it.?
It?s what makes the PATRIOT Act sound, well, patriotic.
?I think some of it is repositioning. Sometimes you keep the same brand and come up with a different story around that brand,? he said. ?Philip Morris, for example, because of the brand being so associated with cigarettes, rebranded to Altria. It becomes a fresher brand.?
Fresher and less lung cancer-y.
But plenty of people worried about pumping taxpayer money into startups and existing business will tell you venture capital by any other name is crony capitalism.
Venture capital didn?t turn out so good under the state?s last large-scale venture capital scheme from 1999 to 2008. The state gained 202 jobs while out-of-state investment firms received $50 million, according to an analysis by the Milwaukee Journal Sentinel.
The state still can?t account for $10 million from that calamity. And a plan for $500 million in venture capital failed to move last session on bipartisan opposition.
But perhaps ?investment capital? is worth a shot.
State Sen. Alberta Darling
The new language may sell better back in Darling?s district, where the long-serving senator campaigned as a free-enterprise loving, get-the-government-out-of-our-pocketbooks conservative. But to critics the concept is a rehash of the same old idea: The state knows better than the taxpayer where to spend money.
Asked what the difference is between venture capital or any other government giveaway, the senator answers:
Venture ? or investment ? capital ?takes taxpayer money and partners with government to invest in businesses to startup entrepreneurs who create jobs and develop the economy.?
Sen. Frank Lasee, R-De Pere, put it differently in an editorial published before Christmas.
?Next session there will be talk about a venture capital bill in Wisconsin, and even here there are people that want to give a small appointed committee the ability to dole out ? I mean ?invest? ? hundreds of millions of taxpayers dollars to get in the business of picking winners and losers with our money,? he wrote.
But that?s no way to dress a pig. Darling said this is about making ?investment in entrepreneurs? and ?creating jobs.?
Even Lasee, after condemning the government?s role in the Chevy Volt, Solyndra and the Wisconsin Economic Development Corp. failures, acknowledged that he would support venture capital, if the investors put some skin in the game.
?The reason I would be willing to vote for a 60-40 percent split is because venture capital firms have a vested interest in making sure they invest their money wisely and making a profit,? he wrote.
Investors take note ??the free market is having a fire-sale discount ??40 percent off. All funds must go!
The Ohio Capital Fund, a ?fund of funds? that Wisconsin lawmakers have said they may use as a model for ?investment capital,? wrote bonds for $150 million and leveraged that money with investors to create 2,283 jobs, according to the Capital Fund website. That?s more than $65,000 a job, not including the funds private investors had to match to get the state?s money.
Columbus Business First reports the GOP-controlled Ohio Senate is not moving to pony up another round of funding.
Darling, though, said this is the way to build jobs.
So was President Obama correct when he said, ?You didn?t build that? to small businesses while on the campaign trail last fall? Conservatives, like Darling, balked at the suggestion that government lent entrepreneurs a helping hand in creating their businesses. But she insists that?s not what ?investment capital? is.
?That?s not what we?re talking about at all. We?re talking about public-private partnerships,? she said.
A little more marketing parlance perhaps. If the term ?subsidy? makes your constituents squeamish, try ?public-private partnership? instead.
Other ideas if ?investment capital? proves a no-go?
?Tying it in with small business is certainly a hot categorization of investment that is being used all over the place right now,? Gibler said. ?Or innovation, tying it in with innovation is in fashion.?
Innovation capital. Now that?s something to take to voters back home.
Darling?s venture cash
Darling introduced venture capital legislation in 2011. It failed to move in the Senate.
Darling has received $172,937 from the banking and finance industry since January 2008, according to the Wisconsin Democracy Campaign, a campaign finance tracking organization. In 2011, Darling received $8,400 from interests marked ?venture capital,? according to Maplight.org, a campaign finance tracking organization.
Contact Ryan Ekvall at rekvall@wisconsinreporter.com
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