Bringing investment money to Madison-area startup companies from the East and West coasts has long been a tough sell. But convincing coastal tech companies to bring some of their jobs here is a real possibility, a partner in a New York venture capital firm told a Madison gathering Tuesday.
Great Oaks Venture Capital, a New York firm that manages two funds totaling $100 million, already has Madison on its radar with investments in 15 local startups, including the mobile restaurant-ordering company EatStreet and Mdot Labs, which hunts for fake advertising traffic.
Great Oaks partner John Philosophos said he has had informal talks with several companies on the coasts that would be willing to locate a tech office in Madison to take advantage of the talent pool and the lower cost of living and doing business here. As many as 40 to 60 jobs could eventually be created, he told the Wisconsin Innovation Network.
“The challenge is to create a culture and environment where our talent is willing to stay,” Philosophos said.
He said establishing a consortium may be an option, so an employee who doesn’t work out with one company could be shifted to another.
The Madison area’s strength in health-related technology and in data science and computer code might form the basis for a tech office here, Philosophos said. “The opportunity does exist to do that. It’s going to take the right group to put it together” and it will take time, he said.
Philosophos and Great Oaks managing partner Andrew Boszhardt are UW-Madison graduates. On a trip to town for a Badger football game a few years ago, Philosophos set up meetings with a few entrepreneurs and was surprised to find “a pretty vibrant and emerging tech ecosystem,” he said.
“There’s a lot happening here and the potential for a lot more,” Philosophos said.
Leaders of two of Great Oaks’ portfolio companies, Fetch Rewards and Plyfe, also spoke to the luncheon meeting, which drew about 75 people to the Sheraton Madison hotel.
Andy Walker, a Stoughton native and UW-Madison computer sciences graduate, said he returned to the Madison area in 2011 to raise his family after working for the U.S. Department of Defense and launching several start-ups in other parts of the country. Walker is now with Fetch Rewards, whose technology lets grocery shoppers scan the barcodes of products they are buying as they walk through the store.
The system speeds checkout and offers shoppers coupons while giving food companies a chance to “hyper-target” their market, he said.
Fetch, which took second prize in the UW’s G. Steven Burrill Business Plan Competition in 2013, is testing its technology in four grocery stores, including Fresh Madison Market, and hopes to be in 20 stores by the end of 2014 and more than 500 stores a year later, Walker said.
Memorial High School graduates Mateen Aini and Zaw Thet co-founded Plyfe, an automated marketing platform, in New York City because so many brands are located there, Aini said. They have 10 full-time employees, mostly in New York, but are working with an employment firm in Madison, he said.
Tom Still, president of the Wisconsin Technology Council, which includes the Wisconsin Innovation Network, said Philosophos’ tech office idea is similar to an arrangement the Wisconsin Security Research Consortium has signed with Altamira Technologies Corp., a McLean, Virginia, technology company working on national security issues. The subcontract also was announced Tuesday.
“It boils down to having a talented workforce that’s available for information technology projects that take place on a regular basis,” Still said.