Midwestern Baird Raises $100M

Milwaukee-based Baird Venture Partners (BVP) last week closed a $100 million venture capital fund that is expected to boost the financing options for the region’s startups.

It is the firm’s first fund-raising effort since it was spun out of Robert W. Baird & Co.’s private equity group in January 2001. That group, Baird Private Equity, is largely a buyout shop; BVP does only venture deals.

Robert W. Baird remains a limited partner in the Baird venture fund, and the firms’ general partners will use the investment’s banks resources to source and evaluate potential investments.

BVP’s investments will focus on three industry sectors: business services, life sciences and technology. The fund will invest in both early- and mid-stage companies, putting $1 million to $5 million to work in each portfolio company, says Paul Carbone, managing partner and co-director. The fund may invest nationally, but will focus on the Midwest.

“The Midwest has good technology, a pool of human capital, and we don’t have the concentration of capital that the East and West coasts have – there’s plenty of opportunity in the region,” Carbone says.

“There is a lot of untapped potential here and BVP is dedicated to helping build that potential,” says Monica Jaehnig, a portfolio manager with the State of Wisconsin Investment Board, the fund’s largest limited partner.

The Wisconsin Investment Board anchored the fund with a $30 million commitment. Other LPs include Wisconsin Alumni Research Foundation, Lurie Investments Inc., The Northwestern Mutual Life Insurance Co., Johnson Financial Group, the Helen Bader Trusts, and individual investors.

Two of the firm’s nine portfolio companies are based in Wisconsin; another three are in the Midwest. Among BVP’s investments are Centerre Healthcare Corp. in St. Louis, Mo.; Everdream Corp. in Fremont, Calif.; NetRegulus Inc. in Oakbrook Terrace, Ill.; and Pharmedium Healthcare Corp. in Bannockburn, Ill.

BVP is the largest venture fund in Wisconsin. In 2002 venture capitalists invested $51 million in 15 Wisconsin startups, according to Thomson Venture Economics (publisher of PE Week). Nine Wisconsin-based startups have raised $110 million in private equity so far in 2003.