Wisconsin Startups Seek Government Support in Wake of COVID-19

Wisconsin startups aren’t immune to the effects of COVID-19.

A survey of 70 high-growth companies in manufacturing, biotechnology, software, consumer products and professional services found a demand for more support from state and local governments. Approximately 80 percent of the companies plan to raise capital to fund their growth in the coming months and an industry group is concerned that without government support access to capital will be difficult.

“Enacting programs and policies at the state and local level that ensure Wisconsin’s innovation economy, the state’s job-growth machine, emerges stronger from the COVID-19 pandemic is critical,” said Matt Cordio, president of Startup Wisconsin “State and local leaders should be listening to the voices of high-growth entrepreneurs from around Wisconsin and ensuring that they have the resources they need to recover from the COVID-19 crisis.”

Many of the companies were not able to take advantage of federal support offered through the CARES Act, but 70 percent of them tried. One in three companies that applied for the Small Business Administration’s (SBA) Economic Injury Disaster Loan program and 42 percent of companies that applied for the SBA’s Payroll Protection Program received funding. “Some survey respondents indicated they were unable to leverage the SBA’s loan programs for small businesses for various reasons including lack of payroll history and other factors unique to fast-growing companies,” said the organization in a release.

And those that received support are skeptical of how much it will help. Startup Wisconsin reported that only 25 percent are confident the support will allow them to weather the pandemic.

The companies surveyed employ an average of 8.5 full-time people. Approximately 22 percent of the companies have implemented a hiring freeze and approximately 19 percent laid off workers as a result of the pandemic. Six percent indicated they are continuing to hire.

Startup Wisconsin organized opportunities for support into three categories. One, creating tax credits, grants and loan programs that encourage investment at the state or local level. Two, implementing programs and policies that encourage large companies and government agencies to purchase products and services from Wisconsin-based, high-growth companies. And finally, safely reopening the state as soon as possible.

Almost half of the surveyed companies are located in the Milwaukee area, while the majority of the others are located in northeast Wisconsin and the Madison area. All of the respondents were founders or executives at the firms.