Madison a bright spot in Wisconsin's barren entrepreneurship scene
MADISON (WKOW) -- Wisconsin's economy is doing well in many respects, with rising wages and an unemployment rate of just 3.2 percent - well below the national average.
But in one area, the state is simply the worst.
For the third straight year, Wisconsin ranks 50th out of 50 states in the Kaufman Index on Entrepreneurship - which is considered the gold standard for such measurements.
Milwaukee is second to last for major metropolitan areas, with only Pittsburgh faring worse.
But experts here in Wisconsin say there is a bright spot in the state - Madison.
In 2010, Alec Slocum and some friends wanted to establish an online website to help Madison college students navigate the often confusing, frustrating hunt for local apartments.
With initial funding from a local business accelerator called gener8tor, Abodo was born two years later.
"We all started part-time, just about four years ago. We're now up to about 38 employees," said Abodo CEO Slocum, talking to 27 News from his 7th floor office space above West Washington Avenue.
But Abodo is a rare success story for Wisconsin.
"For Wisconsin to get competitive in this ranking again, we estimate on the low end we're looking at 250 to 500 - but realistically - we really need about 1,500 new companies a year," said Joe Kirgues, the co-founder of gener8tor.
Kirgues and his co-founder Troy Vosseller have built gener8tor into a fund that has made 60 investments in 41 companies since 2012.
Kirgues said the state's ranking would be even lower if not for Madison, which is actually competitive among similar sized cities.
In fact, in the building where Abodo is headquartered, floors four through ten house only start-up companies.
"Unfortunately, the rest of the state has not kept pace with Madison in terms of importing venture capital to grow the community," said Kirgues.
13 of the state's top 20 venture capital firms - ranked by the number of investments - are based in Madison.
Through two relatively new Madison-based venture capital firms - 4490 Ventures and American Family Ventures - Abodo has secured $8 million in funds since 2012.
The company now serves apartment hunters in 250 American cities.
"Those types of firms are really experienced at scaling companies and so they have the resources both from a cash perspective and from a knowledge perspective to help companies rapidly scale," explained Slocum.
Kirgues said other major communities in the state still have very traditional funding models for business - such as banks and private equity firms.
He said that will have to change if they are going to catch up to Madison and the rest of the country.