Q & A with Brandon Anderegg of the Milwaukee BizTimes

UPDATE:  August 17, 2020


Investors and Friends,

I hope all of you are well and healthy.

To kick-off the fall writing season for the Bold Coast Pipeline, I would like to share with the entrepreneurial community the FULL responses (below) I shared with Brandon Anderegg and the BizTimes about my experiences trying to raise a venture fund in the city of Milwaukee.  This week, Brandon and the Milwaukee BizTimes provide a reflective piece on the Badger Fund of Funds, portions of my experience, and an assessment on the current state of the entrepreneurial community in Milwaukee.  Overall, the article attempts to be balanced and provides varying perspectives from multiple entrepreneurial organizations.

I would encourage you to read the article and sift the facts and statements provided within.  Ask yourself whether Milwaukee’s funding/entrepreneurial environment is framed accurately.  Ask yourself whether the role and occupation that each of the commentators hold may bias how they characterize the state of the venture ecosystem in Milwaukee.  Most importantly, evaluate critically the anecdotes and experience I have presented.  Is it a fair representation of the current entrepreneurial funding environment and culture in Milwaukee?

And with that, I wish you a safe and healthy end to summer and back-to-school season.  We live in a brave new world and I look forward to the adventures that will accompany it.  Enjoy your Labor Day weekends!

Be well,

Ross Leinweber


Q & A with Brandon Anderegg of the Milwaukee BizTimes


In reference to this quote that was published April 29th in the Bold Coast Pipeline blog:

RL:  “I certainly have earned the right to speak candidly and more extensively about the challenges, behavior, and issues I encountered, and it would be on-brand to do so.”

BA:  What challenges, behavior and issues are you talking about?

RL:  “During my experience, I found the community of Milwaukee and its investor base’s risk disposition a primary challenge to raising funds.  It is a very conservative community and generally unfamiliar with modern-day venture capital.  There is nothing wrong with being conservative or not wanting to participate in more risky investing activities like venture capital.

However, I was very thoughtful about how I built out the fund, the people I surrounded myself with, and was patient with the entire process.  In a city the size of Milwaukee, Bold Coast Capital is the type of project that should be able to raise money, especially when you have the stamp of approval of the State of Wisconsin.  If the community wants to improve from its bottom decile rankings, it needs to stretch from its comfort zone when programs are introduced to kickstart the entrepreneurial ecosystem.”

In addition, Milwaukee has also been described as a large city with a small village culture.  The community and relationships are very tight in town, and as a result, many of the projects and much of the funding is controlled by a select group of individuals.  If Milwaukee is to grow – if we are to create an environment that is attractive to people that did not grow up in the community, there needs to be a more independent – open method of discourse that evaluates people and ideas on merit more than prior relationship.  Milwaukee should set a high priority on backing its best and brightest, regardless of who they are related to.”

BA:  You have a lot of experience and based on conversations I’ve had with people in the community, people spoke highly of you and of your efforts. So, what I’m wondering is – if you’re not able to raise a fund, can someone else or is it simply not possible under the current conditions?

RL:  “Overall, I wouldn’t change much about how I went about fundraising.  I affiliated with a State of Wisconsin program with quality resources to assist in my efforts.  I went and recruited individuals with distinct entrepreneurial and technology expertise to help the fund make better decisions.  I waited to a point in the economic cycle when I thought fundraising would be optimal.

So, what would I recommend to others?  Partner with one of the prominent businessmen/women or organizations in the community and use that relationship as a lever to open doors.  I chose not to do so as I wanted the fund to be independent – one that would collaborate with many different funding partners in town.  That struck me as best when it comes to the optionality of investing and creating high returns.  However, one has to get to the fundraising finish line first, and in a city like Milwaukee, where relationships are built over decades, you might need to brush aside independence to find the money.”

BA:  What’s missing from Milwaukee’s equation?  Is it available capital or is it companies worth funding or both?

RL:  “I think one of the greatest challenges for Milwaukee is it highly values control.  When you have hundreds of companies that have been owned and operated over generations, there is a certain amount of familiarity that accompanies those organizations and the idea of controlling your own company/destiny naturally resonates.  It becomes part of the culture.

The conundrum with venture capital is the decision to back new ideas and founders without sales, products or customers is one comprised of layers of great uncertainty.  For a community that is not naturally disposed to feel comfortable in a state of uncertainty, the choice to support, with your reputation or capital, those types of projects is more difficult.

Do we need more talented people in the ecosystem?  Absolutely.  Do we need more capital in the system?  For sure.  The key is to not think about growing the ecosystem individually, but rather as a portfolio and that is why expanding the spectrum of people trying things very broadly is so important.  Most will yield little, but there will be spectacular winners among the mix.  We have to populate the oceans to allow a whale or two to survive.”

BA:  “I did not receive a single commitment from an academic institution, a corporate entity, or an “old money” Milwaukee investor or family office.” – clearly an important factor. Why weren’t these folks interested?

RL:  “I can only speculate…. however, I think I have alluded to several possibilities:  risk disposition, my desire to remain independent, their value of control.  I also believe people were cautious about the geographic focus.  Statistics on geographically focused funds would suggest that caution is misplaced, but it may have been part of it as well.  That question really should be directed to them.”

BA:  Why is their involvement crucial to the success of a fund and VC community as a whole?

RL:  “First, one of the key parts of fundraising is signaling.  Other investors take their cues from “Who’s in?”.  It is simply human nature and if your backyard institutional investors are not going to invest in the fund, what does it signal to others?  Structurally, if Milwaukee is broadly not going to support entrepreneurial risk-taking activities in its community, it presents massive headwinds for anyone with ambition and innovative ideas.”

BA:  To what extent did coronavirus impact Bold Coast Capital?

RL:  “It probably set back fundraising, 12-18 months.  Considering how long I had spent on fundraising already; it was a timeframe that I was not willing to accept given there was no certainty of reaching the fundraising goal considering the conversations to date.”

BA:  Do you feel more could have been done on your part to avoid ending Bold Coast Capital?

RL:  “There were small tactical decisions I might have tweaked.  Overall, I feel very comfortable with the strategy I employed, the merit I brought to the table, the people I surrounded myself with, my effort, the number and type of conversations, and the directness which I brought to the process and conversations.

Many in venture capital believe in a false facade to achieve their means.  I have never found that veneer and choice wise.  People respect and value forthright business conversations and I showcased all elements of the fund so potential investors could make informed decisions.  If that honesty and clarity about the risks contributed to the lack of traction, that is a result I am willing to live with.”