Funding Alternatives and Growth Capital for Wisconsin Startups

Laura Strong: So really our intention from the beginning has been to work with CEOs and founders of what I refer to as kind of early growth stage companies to figure out what kind of financing works best for them for the next stage of growth for their company. So our assumption is that that is not gonna look the same for a manufacturing company and a software company.

And so that there has to be some. Variability in the tools that we use to fund.

Jacob Miller: Hey everyone, and welcome back to the Startup Wisconsin Podcast, A show where you can learn about Wisconsin's growing tech scene through stories of startups, founders, investors, and the talented people making it all happen.

Today's conversation is with Laura Strong, and she's tackling one of Wisconsin's most persistent challenges, the gap between what founders are building and the capital available to fund it. As the founder and CEO of Ancy Fund, she's creating alternatives to traditional equity financing for companies in technology, agribusiness and manufacturing that have revenue and clear growth plans, but don't fit the venture capital playbook.

Laura's path to this point is fascinating. From running operations at a cancer drug development company that succeeded scientifically but failed financially to various roles in health tech, including a stint at Exact Sciences. She kept seeing the same pattern, great companies that couldn't access the right capital at the right time.

Her background gives her a unique perspective on what makes investors comfortable backing founders, even when the outcome isn't what anyone hopes for. This conversation covers the math behind why Wisconsin companies take longer to exit. What founders misunderstand about taking equity investment and why all Laura believes individuals are the real catalysts in any ecosystem.

We also talk about her work teaching at UW Madison and the exciting entrepreneurship initiatives happening on campus. Alright folks, let's get into my interview with Laura Strong. How did you get from just being in the sciences world and working on things to, hey, now I'm like helping fund like great ideas.

Laura Strong: Yeah, so that is certainly, you mentioned a career arc. It is certainly a journey over the last 30 years. Um, and you know, really what I've learned about myself is I enjoy the process of learning love, learning new things. I like to do new things, um, for a bit and then. Learn something new again. Um, I came to Madison 25 years ago, 30 years ago to get a PhD in organic chemistry.

Uh, realized along that pathway that I didn't actually wanna be a hands-on chemist. Um, I. Stuck it out, got the PhD and uh, decided to start a company with a couple of professors, uh, from the university turned into a cancer drug development company. We were lucky enough to recruit, uh, an experienced CEO, who is still an incredible mentor to me, and he really gave me the opportunity to.

Grow with the company. So I actually ran the operations. I didn't do hands-on science, uh, but thought really a lot about how do we take this technology and turn it into something useful. And the reason that that was important to me was because I participated very heavily in our, um, equity investment activities.

So pitching to angels, to venture capitalists, et cetera. And so it, it really. Was something important to say, this is the problem that we're trying to solve, and here is how in the end we're going to, you know, get you your return on investment. Unfortunately, that company didn't work financially. We had really great success.

We took something from bench top through the end of a phase one clinical trial in cancer patients. Really felt like we had the results to go into the next stage, but, uh, couldn't get a business development deal done. Couldn't get that next round of funding. Um, you know, again, but I had that, that really sense of financial responsibility to the, to our investors.

And one of, I think the things I'm. Pretty proud of is having, uh, multiple of those angel investors say to me afterwards that they would invest with me again. Uh, which was amazing. So the company was technically a failure, but, um, you know, that happens and, um, I'm very proud of what we built there.

Jacob Miller: Yeah. Um,

Laura Strong: so from there I moved into health tech.

Really worked for a number of different companies kind of going in and say, you know, uh, a software platform was built for an orthopedic surgeon. How do we take that software and apply it into a no market? Is there somewhere else that we can be looking, uh, for opportunities? So a lot of customer research, um, trying to think deeply about, you know, problems, solutions, how you get paid for solutions.

Um, I did do a stint at Exact Sciences, uh, where I ran clinical strategy for new cancer detection tests. That was a very fun experience. It was the largest company I've ever worked for. So I got to work, you know, really closely with a lot of great experts in their field. Uh, was part of launching the Onco Guard liver test, which is, um, really, uh, a great, um.

A great thing to be part of a product that helps people. Uh, I left there and moved back to small companies, worked um, in software again at, uh, data Chat. It's a very, uh, technology driven heavy company, uh, based out of UW Madison, and then went back to cancer drug development with a new twist of developing Radiopharmaceuticals, uh, with a company called Archus Technologies.

Um,

Jacob Miller: all right.

Laura Strong: And so that, that's kind of the career part. Those are the things that I got paid to do.

Jacob Miller: Because I'd imagine that a lot of people that go to school for that field specifically, they may not get into entrepreneurship. Do you feel like there's a reason for that? Do you feel like it's just they don't know that they can get into like startups and entrepreneurship, or is it more of like, there's just more opportunities now than there were 10 years ago?

I'm just curious how your experience or what you've been seeing.

Laura Strong: Yeah, I think there's a lot. Um, you know, there's a lot of pieces to that. Uh, one is when you get an advanced degree like that, um, a lot of people feel, oh, I'm this expert in this thing and that's who I am. And, and, um. It is, it is kind of a weird thing to just kind of be an expert in something and then just walk away, uh, from what you've built.

Right. Um, and so I think for some people it's that, uh, entrepreneurship, especially if you go off and do something totally different, even though we were doing cancer drug development, there was no chemistry involved. Um, so that, that can be a little disconcerting. I think certainly at the time people were talking about alternative careers for chemists and they would say things like, oh, you can be a patent attorney.

So they were alternative careers, but you were very much still the expert on the chemistry. You were just helping chemists in a different way.

Jacob Miller: You mentioned that folks that had invested in you would invest in you again. Why do you feel like that was the case with them?

Laura Strong: I think they felt like we were good stewards of their money and we really worked hard to execute on the plans that we set out to, um, to do.

Uh, so I, I think when you take equity investment, you are. Essentially saying, we are gonna do these activities and it's gonna give you this return on investment. And when you don't do those things, whether it's because the science doesn't work, or the business development efforts don't work, um, I think that can be a challenge then for the investors who don't get their return.

And that's a question of did you do everything you can to ensure that in good faith you could say, we did everything we could. Or is there like, oh, well, you know, we, we didn't really try that, we decided to do this instead. There can just be a lot of challenges to feeling like, um. You know, your, your money was put to the use that you invested it for.

Jacob Miller: Yeah. Like removing the idea of like, it was the founder and the team, uh, allocating resources in the wrong way and not, like you said, execute on the correct things. Mm-hmm. Versus market timing or just, you know, the, the model just doesn't work, the numbers just don't work, you know? Yeah. Kind of thing. So, um, as much as we tried to figure it out, the market's just like, Nope.

This, this is too expensive for us. It doesn't fit within how we function as a business either. So, you know, what was the moment that you kinda realized that Wisconsin needed different kind of funding solutions? And why were, why did you feel like you had to be the person to just make it a thing?

Laura Strong: So the easier part is to answer is the first part.

Uh, so. I've over the years seen a lot of different kinds of companies from a number of different vantage points. So not just biotech companies, but technology companies, uh, B2C companies, uh, and. Over the, the course of the years as, as a potential investor, as a mentor, you know, as a, uh, pitch judge, uh, as potential tenants, uh, at, at one point.

So various different ways to, to sort of look at these businesses and. You know, oftentimes businesses would say things like, oh, we're gonna go after equity financing. And, you know, well, your, your business model doesn't really, um, line up with what an equity investor would be looking for. Oh, well, you know, we we're gonna do this now, um, or we're gonna add in this product line.

Um. And, and it becomes a challenge to say, well, you know, it's what you're building is worth doing. You should stay on the pathway that you were on, but I have no way to tell you where to get the money to do that. Um, and so I think the, the realization in part came from that. And then in part it came from.

It was back in 2017, I was very actively involved in, uh, capital Entrepreneurs and the Forward Festival, and I. Did a presentation on venture capital and exits at the Forward Tech conference in August of that year during Forward Fast. And what I learned about our exits here and this information is outta date and we're doing some new analysis now, but what I.

Learned was, first of all, most of the companies don't actually tell you the exit value. So if you're thinking you can go out and determine, you know, do we have a lot of three x and um, exits versus 10 x? The answer is very few people have the data to tell you that. Um, in fact, I would say almost nobody has enough data to tell you.

Um, but if you start to take a step back and think about how venture funds take, how they, how venture funds, okay, I'm gonna do that again. If you take a step back and think about how venture funds make money, they make an investment, they're thinking it's gonna be either, you know, go to nothing or 10 x in three to five years.

Mm-hmm.

Jacob Miller: Because

Laura Strong: a venture fund has a life cycle of about 10 years. And so if you start to look at how long an investment is held by the equity holder, by the VC fund, by the angel group, you can start to back calculate what would the return need to look like after five years or 10 years or 15 years for the million dollars that they put in to that initial investment.

And when you look at those numbers and you look at the length of time that companies, uh, in Wisconsin were held versus, uh, elsewhere in the United States, our companies were held for 14, 15 years, which was much longer mm-hmm. Than a traditional venture cycle and much longer than the national, national average.

Jacob Miller: Wow.

Laura Strong: So it sort of presented this issue of, well, it's not the number everybody wants, which is what? What do our exits look like? But it starts to suggest that there is an issue here with how quickly we can build these companies and get the return for investors. And I think part of that is potentially due to this issue of.

Not all of these companies are gonna be 10 x, they're not even really necessarily designed to be 10 x exits. Sure. If you look at their business models, so again, that comes back to, okay, well how do we fund those companies? 'cause they could be great, sustainable growing companies and how do we fund them?

Jacob Miller: I, I'm curious around why you guys decided to.

Kind of offer the multiple model of funding models for, for Valency and maybe kind of go over, uh, the different models that you offer as folks are, uh, learning about Valency phone, if they're curious to reach out, um, and how you would kind of break that down for folks.

Laura Strong: Yeah, so really our intention from the beginning has to, has been to work with CEOs and founders of what I refer to as kind of early growth stage companies to figure out what kind of financing works best for them for the next stage of growth for their company.

So our assumption is that that is not gonna look the same for a manufacturing company and a software company. And so that there has to be some. Variability in the tools that we use to fund. At the same time as a fund, we don't wanna have 20 different tools in the toolbox. We wanna have, you know, two, maybe three tools that we can modify a little bit, um, in order to get these deals done in a way that the company can actually fund their growth and we can make a return on our investment.

So, um, the things that we are starting with, uh, one is revenue based financing. Uh, the second kind of bucket that we think about are structured exits. An example of that would be redeemable equity. And then the third bucket, actually it came up when we did our, um, outreach for our initial customer discovery, and that was supply chain financing.

And we don't have a strong. Model there for what we would build. Um, again, that's a, a customer need that we heard for better alternatives than what exists.

Jacob Miller: There's a lot of founders out there that like, say, well, I need the capital to like, you know, get my product off the ground or my, my service slash product off the ground.

Um. And obviously the revenue based model, like it only makes sense obviously if there's already revenue happening, they've bootstrapped it or self-funded or angel or they have funding from somewhere else and then you would become a secondary funding option. Um, I guess, yeah. What do you, for folks that maybe don't have funding yet and they come to you, but they're interested in the revenue based, but they don't have revenue, like what, I guess, what would you tell them?

What would you recommend to them?

Laura Strong: That's a great question. So when I started down this road, I actually really thought that. We were gonna find a lot of bootstrapped companies that were interested in growth capital, and what I found was actually there are companies all along the spectrum from sort of seed to, well, pre-seed seeds.

Stage or series A where they're looking for that next bump up in revenue to have a really good next funding round. Yeah. Um, or they're looking for that bump up because they're, you know, essentially done with their funding rounds, but they need a little bit more of a tweak on the revenue side to, to get the multiple that they need for an acquisition.

Um, so those companies, you know, are in our target profile. We've actually gotten a number of great referrals from the Angels, the VC groups, um, for both companies that are in their portfolios as well as companies that aren't as good of a fit in their portfolios. With companies that aren't really thinking about the venture model and looking at how do you start?

And you know, there's generally two, two ways you do it, you bootstrap it or you, you go out and you do raise a small pre-seed or friends and family type round, uh, and then you use that as your foundation to grow. Um, and, and I think for those companies, I would say those are still probably your options. Um.

And it's, it is, uh, difficult to say. There's, there's not like a great capital option for you, but that is one of the issues with the venture model is a venture capitalist or an angel, uh, is looking for high potential, um, company. And so when they make that very risky initial investment, they're looking for something.

That is gonna make them potentially a lot of money. Um, and so if you don't fit into that, um, box for them, you know, there's, there's not a lot of other highly, um, risky capital available to you.

Jacob Miller: Yeah. You kind of mentioned like a right fit, uh, for working with Valency. What, what types of companies do you see as like a best fit, uh, for the models that you offer?

Laura Strong: Yeah, so when, when I think about it, I think more about, um, I. The company has revenue, so they have some indicator of pro product market fit, right? So there's somebody willing to pay for the product that they are selling, um, so they have revenue coming in the door. There's a strong understanding of what the next step is in terms of revenue growth and not just an understanding, but an actual plan.

For what that revenue growth would look like for the different activities, how much the activities would cost, uh, and then I have to be able to look at that and get comfortable with the idea that those numbers are potentially realistic. Um, 'cause that revenue growth is where Valency Fund actually gets repaid.

Jacob Miller: Uh, I'm kind of curious what you feel like, uh, is the most misunderstood aspect of, of raising funding for like founders. Like, I guess maybe, I dunno if it's common, uh, misconceptions or, uh, common mistakes that you see founders making. Uh, because you know. Whatever you read on the internet or just seeing, you know, have read in books or maybe someone told them, well, you gotta do it this way.

This is how I did it. Um, curious what your thoughts there are on that.

Laura Strong: Yeah. Um, I'm gonna answer a slightly different question. Uh, sure. And that is, what do I think is the most underappreciated, um, about the traditional equity model? Um hmm. And I think that the answer to that is success in that model is sale of the company.

Hard stop.

If you take Angel investment money, if you take venture capital money, they get their return when you sell your company.

Jacob Miller: So the question then becomes, are you looking to build a company that you'll. Wanna sell in the future? Or are you looking to just build a company and leave a legacy and you keep going?

Laura Strong: I think that's part of the question. Um, I think the other part of the question is, can you actually get to the point where your company is attractive enough to sell? Because you really have to execute on hitting the numbers that get you to that successful sale. Because if you're not, if you don't do those things, you basically become, you know, a bad investment on their balance sheet, and that's not really where you wanna be.

Um, so, and I'll also say that that returns, you know, it, it's important for the investors, right? It's important for the angels, for the venture capitalists, but the founders, the management team, the employees, all those people should be participating in the returns in that scenario, right? Mm-hmm. Um, and those returns.

Get recycled into the next generation of companies, right? That's where the the next set of angels come from. So returns and Xs are critical not only for our investors as they exist today, but for that next generation of people that are making those investments.

Jacob Miller: Um, yeah, actually that makes me think about like how common, and I actually don't, I don't know the answer.

Uh, how common is it? For founders in Wisconsin that have sold their businesses and exited, I'm curious what the percentage of them that become angel investors or get involved in investing in other startups after they, uh, do, do you have any sense of that at all? I'm curious if you know what it's like in Madison versus other cities.

Laura Strong: That's a great question. I don't know what the numbers are. I can say that, um, there are quite a few folks who have made, um, good returns on their investments that are very active investors now. Um, I think the, the thing that we should all be thinking about is how do we get more of that? How do we get more of these returns so we get more of those people?

Um, yeah. It is critical, and I think one of the other things that I'm sort of intrigued by is the idea of. Employee ownership. Um, and I'm intrigued by it because it provides an alternative exit scenario for a, a founder or a founding company. This is something you see in companies in, in Wisconsin. Um, and it, it's, I think, an interesting way to not only provide that exit for a potential founder, um, or founding team, but also to, you know.

Have everyone participate in the growth of that company and really, again, to recycle, um, the those returns.

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Obviously they can. There's options here. You're one of them in Wisconsin. Um. But obviously there's a lot of capital elsewhere. You know, there's a large volume obviously outside the state of Wisconsin, and just different deals, like right, the deals are different. How the contracts are written, uh, might be a better deal for the founder versus the ones that are being offered at Wisconsin.

Larger volumes of, of capital, like the things like that. Um. Yeah. I guess what, what do you feel like founders, I guess, find mo the most difficult? Like is it just, is it that, oh, the right funding partner isn't for me here, or they don't really know how to like pitch their their solution effectively?

Laura Strong: Yeah. I think that founders CEOs need to look at their company and their business model and find the best fit.

In terms of capital as opposed to saying, uh, you know, this is the most accessible money to me because it's just down the street. Um, because. All of the capital comes with different assumptions. And when you take money that has different assumptions than what you're trying to build, you start to build something that is different than what you set out to, and that can really impact your chances of success.

So I would say in Wisconsin, having founder CEOs. Really think through how they wanna build their business, what the realistic plan is for that, not only for this fundraising round, but in three years, in five years, in 10 years, what does that look like? And having at least some back of the napkin plan for what they're building.

So that they can see, okay, this capital aligns with this stage, or it doesn't align, or it's never going to align. Um, and so that's I think really important for founders and CEOs to, to look at. And that capital may be here, that cap capital may not be here.

Jacob Miller: Mm-hmm. Yeah, because there's, I mean, there's the idea of like taking capital from other places and bringing it to Wisconsin.

Invest in the economy of Wisconsin if Right, if they're, you know, maybe have an office here or hire a team here. Um, but also, you know, if, if that's a, a, a lost opportunity for a fund that's based outta Wisconsin or, you know, there's also that, um, I'm curious around your thoughts. Uh, there's been conversations online around like.

We don't have enough good ideas. Founders aren't presenting enough good ideas to be invested in. And then the other side of that, there's not enough capital to invest in, in the ideas. Um, I've heard both sides of the coin. People feel like, oh, we have plenty of ideas. Um, there there's not enough capital or maybe there's great ideas, but they're not being presented in a way that is intriguing to investment.

Um, for example, having, like you were saying, having a clear strategy. Next steps, here's what the next six months would look like, here's market expansion, all that kind of stuff. A real true plan. They just have an idea and they're just expecting themselves to get, you know, capital for that cool idea. Um, which could have great legs, but it's just not refined.

I guess, how do you I feel like it's both. I feel like there's, it's not like a one, oh, if you just fix this, everything would be fixed. I feel like there's both sides to that. Um, I guess, do you have any thoughts around on the, around that conversation?

Laura Strong: Yeah, I mean, I, I agree. I think it's both sides to it, right?

So, um, it's important for founder CEOs to, to look at. What is a venture fund, right? Every venture fund has a particular model, um, where, or a particular focus I should say. So they might look at software companies or they may only look at medical device or only pharmaceuticals or, um, there's a few that look at only agribusiness.

There's a few that look at only manufacturing. So do you fit into their bucket? Their focus. Um, and then different funds invest at different points in a company's lifetime. Here in Wisconsin, we tend to have funds that invest earlier in, in the life cycle than later. They typically are smaller funds, so if you're raising a, B, c, D round, you're very likely to have to do that elsewhere.

Um. As opposed to here in Wisconsin. So I think that's important to understand. It's important to understand, um, for a traditional venture model, what point in the life cycle is the fund? Because typically money will come into a fund, it has a 10 year life cycle. Capital gets deployed in the first three to five years, whatever that looks like.

Um, so has the, has the fund already made all their investments? And you're really, you know, kind of on the tail end of that 'cause they're saving money for their, you know, portfolio companies. All these things are important when you look at, is this firm, is this venture firm a good fit for me? The same is somewhat true for angel groups.

I think you get a, a greater diversity of, you know, how much money, uh, the different focus. But even, even there, there are groups that are, that do more of one kind of thing than another. Um, so I, I think having a greater understanding of those things would help folks kind of sort out whether, um, you know, they should be pursuing options elsewhere or whether they should really be, um, driving things here in Wisconsin.

And I think that's one thing that I have heard quite a bit from, um, founders and CEOs here in Wisconsin is the lack of lead investors. Which I think is true, I do believe that there is, um, there, it, it is a challenge to get a lead to step up even when you have a number of folks that are willing to come in, um, to the investment.

And on the flip side, I, I have also heard what you have heard, and I see this as well, that some of these ideas aren't necessarily. Fundable ideas. Mm-hmm.

Jacob Miller: And

Laura Strong: it's not their bad ideas, it's just when you look at the venture capital model, you look at the equity investment model, they don't fit the model.

Jacob Miller: Yeah. 'cause they could bootstrap it and, and it could still be a successful small business, which small, again, the word small business, that's pretty broad. Like as far as like amount of, you know, revenue you can create. Yeah. So it's like nothing wrong with like, hey, bootstrap it to a million dollars, like.

If that's still a successful business, like, but like you said, the model doesn't fit for, uh, for vc. So.

Laura Strong: Yeah, I think one of the business definitions, or one of the government's definitions for a small business is like under 500 employees or something. So, which is,

Jacob Miller: yeah, like I think just the perception of small, I think of like, you know, restaurants and, um, smaller retail stores and stuff like that, but five hundreds, like that's a like legit like manufacturing business.

Like Yeah, like 500 employees, like millions

Laura Strong: of dollars, right? Like,

Jacob Miller: yeah. Yeah. So it's just, it's, it's fascinating. Um, but yeah, but I think. You know, there's the, I I, I'd imagine a lot of people get the, the, I guess the, the phrase I'm thinking of is maybe Mirage Mirage, the mirage of like, well, if I give VC. I can 10 x the potential of my business idea, and they don't really truly understand where the cap is.

Like, well actually, like, just because like this is what's there, doesn't mean you'll get all of that. Um, right. They kind of are like daydreaming a little bit and they, they just, they're, um, naive to the, to the actual potential of it. Um, and I don't, I don't know if that's it, uh, because just 'cause all the hype that you see online, but, um, and people are just misled.

Um. But like, it's like, I don't know how you get someone to get a sober sense of like what the truth is for them, but Yeah.

Laura Strong: Yeah. Yeah. I think one thing that's important for founders and CEOs to think about when they're taking capital is I'm gonna dedicate three years or five years of my life to this thing.

Jacob Miller: Hmm.

Laura Strong: What is the return gonna be financially for me, a lot of people do this because of passion, which is awesome. Um, but along with the passion, there should be some financial return. You have to be aware when you're going into these, um, agreements that there will be potentially liquidation preferences and different things that impact what the founder, what the management team, what the employees will get at the end.

Because generally the investors will get their money first, which they're. Taking a lot of risk with this capital. The venture capitalists need to provide a return to the, their LPs so they can raise another fund. This is, it's not right or wrong, it's simply the way that the math works. Um, so to think through, do, do I wanna build it in this way, and am I watching for these things as I build versus if I can build in smaller increments, um.

Maybe that's the way that I prefer to build.

Jacob Miller: Yeah. Uh, I'm thinking through when you said earlier around in Wisconsin, the average life cycle of investments is, you said 15 years.

Laura Strong: That's a little dated because that was a 2017, um,

Jacob Miller: sure.

Laura Strong: Analysis, but yeah,

Jacob Miller: I'd imagine it's not much different, you know, today just, I don't know, I'd, I'd imagine some of those are still held and stuff like that, but, um, I'm sure, I'm hoping it's improved with, especially with the newer funds that we have and, um.

But I'm curious around, it feels like your approach and Cy Fund is a way to like, make an impact and change kind of like the funding landscape in Wisconsin a little bit. Um, other than you launching valency and, and bringing that to life, like, what else do you feel like could help impact that, those numbers and, and pull the lifecycle to a smaller range?

Laura Strong: Yeah, I think really having. All of us that are thinking about starting companies, investing in companies, making sure we're looking at. The strategic questions around what kind of business is it, what kind of capital will it need and when, and providing those funding opportunities. So we're building businesses, um, that can scale on their timeframe, that can grow.

I think that's really important. So hopefully, uh, part of what Valency Fund does is creates, I mean, honestly, hopefully what I'm partly what I'm doing is creating competition for myself, uh mm-hmm. And having people have conversations around, yeah, this. This general idea of doing things differently is a good idea and we're gonna do it in this way, and maybe it turns out to be better and, you know, then I can pivot.

But, but, you know, whatever it is, let's provide, provide different funding opportunities for the companies that are here.

Jacob Miller: Yeah. Yeah. That's great. I, I appreciate you, uh, you and your team. Making it real and bringing it to life and, and, uh, creating another option, uh, for folks here in Wisconsin. Um, I actually wanna talk about, uh, Madison's kind of startup scene, startup ecosystem.

You've been there for a while. Uh, what do you feel like should, what do you feel like is, uh, good right now? Like, what are the strengths that are happening in Madison, in the ecosystem with the people in the community? What should we be doing more of that you're, that you're kind of seeing.

Laura Strong: Yeah. Um, so I have been in the ecosystem for a long time, so I've been part of various organizations over the last 25 years.

Um, you know, started and ran a, a biotech meetup when meetups were, uh, just getting off the ground. Mm-hmm. Uh, from that to being on the board of, uh, bio forward of starting block. Um. Lots of different involvements. And I think one of the great things is we have a number of organizations that support entrepreneurs and entrepreneurship in general.

Um, it's dangerous to list them. Um, so I won't really do that. But, um, there are a number of them and they provide different resources to different kinds of businesses, um, all across the spectrum. So I think. I think there's a lot of organizations doing a lot of really good work, um, here in Madison.

Jacob Miller: Yeah.

What, uh, the efforts that they're doing, what do you feel like, you know, obviously we have, uh, things like founder day, there's accelerators happening, there's, there seems to be private meetups, like obviously you said you had your own, but there I do see like other meetups happening, um, within like ai within u, you know, ux, um, stuff like that.

Uh, what, what do you feel like. Uh, there should be more of, or maybe, maybe what, maybe is there something that's missing from the ecosystem that you wish was happening now, um, that maybe either used to exist or went away or has never existed?

Laura Strong: Yeah. One of the really fascinating things I think about ecosystem is it's important as the organizations themselves are individuals are also.

They're the catalysts. They're the ones that actually make things happen. And so whether an individual is in an organization or on, you know, doing something on their side, on the side, I think that organizations are, are, I think that individuals are really what drives these initiatives and, um. When you get into kind of who's doing what and who's building that next thing, it's really interesting to me 'cause I think there's been a lot of good startup founding kind of energy coming outta Milwaukee.

At least that's what it looks like from the Madison perspective. A lot of new initiatives, a lot of really interesting things happening. And, um, it's been kind of an interesting question in my mind, like, oh, am I missing something new in Madison? Or, or what are we doing? And so that's, that's been an interesting discussion over maybe the last year or so.

Mm-hmm. Uh, and I think that's. That's kind of galvanized a lot of folks who kind of were like, oh, we've got a lot, we've got all these things going. And now I, I think that that's kind of like, oh yeah, we need to make sure that we're putting the time and the energy as individuals into a lot of these organizations to help drive them.

Jacob Miller: Do you see like u unique opportunities? I know vay, uh, invests in certain industries. Mm-hmm. But I'm curious, just because of your background, do you see unique opportunities in Wisconsin industries like manufacturing, biotech, agriculture? Like what within those industries are you seeing like, wow, there's this really cool thing happening in manufacturing right now, does this really cool thing?

Obviously biotech is vast, or healthcare is vast. Um, and even agriculture, I guess they're all vast, but. I'm curious what you've kind of seen or what you're excited about within, uh, especially specifically within Wisconsin in those industries.

Laura Strong: Yeah, so one of the things that I'm really excited about, so coming from the biotech side of things, um.

You know, we are always behi, Wisconsin is always behind, you know, the, the big behemoths, the, the Boston, the San Francisco. Um, and we talk about, oh, we can compete and we can, we actually have some really great companies, uh, here in Wisconsin, um, and have had some really nice exits. So there's a lot of good stuff that happens in biotech.

But I will say that one of the exciting things is when I look at Wisconsin's, um, rankings in things like manufacturing and agriculture, I think there's a lot of opportunity that maybe we're not quite looking for yet. Um. So, for example, Wisconsin is number two for manufacturing employment. Uh, so what are those people who actually work in manufacturing, what do they think can be done better?

I mean, that's where innovation comes from, right? It's not someone kicking back in. Someplace that knows nothing about anything. It's the person it's doing. Often the person that's doing something and it's like, wow, this, this could be better. Mm-hmm. Um, so I think that there is a lot of potential around that.

I think the other thing that excites me about say, agribusiness or manufacturing and the strengths that the state already has in those areas is at one point I saw this map of, um. GE Healthcare is Wisconsin based suppliers. Hmm. And it's awesome. Like it's these little companies all across the state Wow.

That GE sources products from, and I'm like, well, wait a minute. Are we doing that now? Are, are there more companies that are starting that could do that kind of thing? I get excited about that kind of opportunity because if there are larger companies, then being adjacent to those larger companies that need new parts, that need innovation.

And entirely new products. You're still there. You're still getting that kind of information whether you work there or whether it's your friend that works there, whatever it is, you're learning about what's happening within those, those larger organizations.

Jacob Miller: Yeah. Yeah, that's great. Uh, you also teach at UW Medicine, is that correct?

Are you still teaching?

Laura Strong: Yeah, so I teach in the Master's in Biotechnology program that's run out of the School of Medicine and Public Health at UW Madison. Uh, and I help students in the second year of their master's program, I helped them with their thesis project. So it's basically taking all of the concept that.

The concepts that they've learned about science and business and putting them together into an original project, uh, to demonstrate their, um, knowledge.

Jacob Miller: Yeah. I'm, I'm curious around, um, how teaching that program and, and the students that you're interacting with, and like, if they're, if you're seeing kind of patterns of like.

Um, entrepreneurship, working with these individuals and what that's kind of been like for you and like maybe like aha moments people have had, or just how, how you kind of like apply your entrepreneurial experience within your teaching there.

Laura Strong: Yeah, it's when I first started, I didn't necessarily see it as clearly as I see it now, but what these students are doing is coming up with an original idea and then having to make a compelling argument, both scientifically and from a business perspective about why this might work.

Over the years, we've had a number of students who realized during their project that actually it's not gonna work. And we work really hard to explain to them that as long as they put all that information and the analysis in their paper, it's totally fine. That's the real world. Um, and you actually want to be as critical as you can to identify the areas where either you need to do a little bit more work before you get your funding or, you know, commit your life to, I'm gonna build this.

Thing.

Jacob Miller: Mm-hmm.

Laura Strong: Um, you know, and that's, that's all. Okay. From my perspective, one of the things that has happened is I've really had to distill my thoughts and ideas from the general mentoring that I do to really more specific concrete, um, concepts that I can convey to the students. Um. I think one of the other interesting things that happens is we have a lot of conversations in class about the fact that there are just a lot of problems that exist in the world that nobody is going to pay you to solve.

It's great problem, it's a great solution, but in the end, nobody is going to pay you to solve that problem, and I think that is. An interesting thing for people to start to grasp. Um, but if it's a problem and I have this solution, why wouldn't people pay? There are a million reasons why people wouldn't.

Jacob Miller: Mm-hmm. Yeah. That, I think that is like one of those weird, I think we all experience it at some point in our life, regardless of industry or background, where we have like really great ideas and then it's like. But it doesn't really matter. It's not, no one's gonna buy this. Mm-hmm. Or it won't actually make a difference.

Like, you know, hey, it'll make your, you know, life a little easier right now. But in the grand scheme of things, like it doesn't change anything.

Laura Strong: Yeah. But

Jacob Miller: yeah. Yeah. Or you,

Laura Strong: or there may be like an adjacent product Hmm. That is necessary in order for your product to ever make it. Sure.

Jacob Miller: So

Laura Strong: it's great. It's wonderful, but it relies on this thing that just doesn't exist yet, or, you know, people haven't figured out how to scale or, or whatever it is.

Jacob Miller: Yeah. Yeah. Um, I'm curious if you've seen, um, like really promising strong ideas and talent coming through UW Madison, uh, on your, uh, in your personal experience, like, uh, how do you feel about like, the future of innovation through Wisconsin specifically, uh, with UW Madison, I guess.

Laura Strong: Yeah, I think that there are a lot of really great ideas on campus.

Um, there's a lot of support for entrepreneurship on campus. I think one of those things that we need to do. Differently, I won't say better, but differently is figure out how to tie those things into some of the industry initiatives that are happening off campus. Sure. Yeah. And build those bridges.

Differently so that there's an easier flow of good ideas of talent, of technology, whatever it is, into our kind of industrial ecosystem.

Jacob Miller: Yeah. I, I, yeah, I don't actually have a sense of what that looks like today. How, how would one find out, like what's, what are the, the current bridges that are happening, I guess, I don't know.

On their website or would you have to like, I'm kind of curious like where that's documented.

Laura Strong: Yeah, so actually that's a very interesting question. UW Madison has undertaken, um, an initiative to explore entrepreneurship on campus. They developed a report after talking to a number of people in industry and on campus.

They. Did kind of a A strengths assessment. A program assessment of what they have and what people were asking for. And they're launching a new entrepreneurship initiative, I think they just announced this week. Uh oh.

Jacob Miller: Wow.

Laura Strong: Yeah, so there is a lot of discussion right now about entrepreneurship and how to do things differently on campus.

Jacob Miller: Yeah, who would I be able to talk to about that? Like, do you know, is there someone

Laura Strong: I do that'd be the

Jacob Miller: best fit for that conversation? I'm curious.

Laura Strong: Yeah. Um, Eckhart so I can connect you with him

Jacob Miller: after this. Oh, that'd be awesome. Yeah. I would love that. Yeah. Yeah, because I think that's one thing for me. I, I never, I've never lived in Madison.

I've visited many times. Um, I didn't go to UW Madison. Having those connections is great and just getting a better understanding of who's all there, what's all happening. Mm-hmm. You know, how things have changed over the past decade. 'cause a lot has changed everywhere. Yes. And just understanding that story better, so I would love that.

Laura Strong: Yeah, I'll send you some background on kind of the report itself. Yeah. The recent announcement of the initiative and then um, John's info. And then if you want, I can do a direct connection for you two.

Jacob Miller: Yeah, that would be awesome. Thank you. I really appreciate it. Cool. Yeah. Um, so as we kinda wrap things up here, what's next?

I mean, obviously Cy Fund is, is new and fresh, but what is next for, you know, the next six months to a year? What are you focused on with Valency?

Laura Strong: Yeah. So what is next? We actually will soon be announcing our first, uh, investment. Uh, we're targeting three investments by the end of 2025, so I am hot on the trail for, for two more.

I'm looking for two more great opportunities by the end of the year. So we are working really hard to develop our connections into the agribusiness. And manufacturing communities across the state, uh, hoping that we can really follow through on our mission of being a statewide investment fund that invests across the strengths of, of the state, not just, uh, technology.

So looking, looking hard for those next investments.

Jacob Miller: All right. And then I would imagine the best way for folks to reach out would be go to the website. Um, I could definitely put the link in the show notes here and stuff. Um, but, uh, would, would it be okay if people reach out to you on LinkedIn? I'm just kind of curious what the best path is for conversations around investment.

Laura Strong: Yeah, so Valency Fund the website would be great. There's a, a way to connect with us through the website. Uh, also, uh, valency Fund. That's where we'll be putting, um, on LinkedIn. Uh, a lot of information about the fund, about, uh, information about this kind of financing, those kinds of things. We're working hard to put together some events around this.

Different kind of financing, both from a company standpoint and investor standpoint. We've actually got an event at Forward Fast or Dream Forward Fast called Capital that fits on Thursday, August 21st. Uh, so, and we'll be doing more of those kinds of events as we kind of had the opportunity.

Jacob Miller: The one thing I did want to ask is, you know, how, how can the community support you and help you with everything that you're doing?

What's your ask?

Laura Strong: My ask would be, if you know of early growth stage companies that have solid revenue are looking to grow based in Wisconsin, either agribusiness, manufacturing or technology, and you think they'd be a good fit for valency, suggest it to them, suggest that they look into us. Um, if you are in the ecosystem and you're an ecosystem partner and you talk to companies like that, um.

Reach out. We wanna build those connections and those partnerships to be able to identify those companies to help them, uh, grow in an, an easier way with other resources well as well. So, um, yeah, just reach out.

Jacob Miller: All right. Well, on behalf of the community, I just wanna say thank you. From working within the sciences, within, uh, hosting your own meetups and get, gather people together and now creating this new funding option, um, you're definitely like a, a very valuable, um, person within our community.

So we appreciate you. So thanks. I just wanna say thank you.

Laura Strong: Well, I wanna say thank you because starting this podcast, the Startup, Wisconsin, all the events and everything, it's really, it's a ton of work and I know how hard that can be, uh, on top of a, a, you know, paying job. So, um, yeah, I really appreciate the work you're doing.

Jacob Miller: Thanks for joining us on the Startup Wisconsin Podcast. Wanna support the show. Don't forget to subscribe and get updates. If you're feeling generous, you can share, rate and review our podcast to help others find us. Alright folks. Until next time, let's keep moving Wisconsin forward.

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