Episode 11 now available!

Ep 11 - Laura Strong, Founder & CEO of Valency Fund

​Funding Alternatives and Growth Capital for Wisconsin Startups​

Laura Strong has spent 25+ years navigating the intersection of science, startups, and capital. Chemistry PhD → biotech executive → health tech operator → fund manager. Along the way, she kept seeing the same problem: great Wisconsin companies that didn't fit the traditional venture model.

In this episode of the Startup Wisconsin Podcast, Laura breaks down why not every good business should raise venture capital, how Valency Fund's alternative financing models work, and what founders misunderstand about equity investment. Plus: why Wisconsin exits take 15 years and what that means for your fundraising strategy.

Episode Topics

• Why venture capital math doesn't work for most Wisconsin companies
• Alternative financing: revenue-based financing, redeemable equity, structured exits
• The research behind Wisconsin's extended exit timelines
• How to match your capital type to your business model
• Madison's startup ecosystem dynamics
• What founders get wrong about raising money
• Manufacturing and agribusiness opportunities in Wisconsin
• Teaching entrepreneurship at UW Madison

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→ Listen to the Interview​

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Key learnings

Not every good business is a fit for venture capital

Here's something a lot of founders don't hear enough: just because your business is good doesn't mean it's right for VC funding. Laura makes a really important point that venture capitalists need 10x returns in 3 to 5 years to make their fund math work. That's the game they're playing.

If your business model isn't built to deliver that kind of outcome, you're not a bad founder with a bad idea. You're just playing a different game. And that's totally fine. You might have a great company that can grow sustainably, throw off cash, and support your life for decades.

But if you take venture capital money expecting that path, you're going to run into problems. The key is understanding what kind of business you're actually building and finding the capital that matches.

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Wisconsin startups take way longer to exit than the national average

This one really stuck with me. Laura's research from 2017 showed that Wisconsin companies were being held for 14 to 15 years before an exit. That's way longer than the typical venture fund lifecycle of 10 years, and it's significantly longer than the national average.

So what does that mean? It suggests there's a mismatch between the types of companies being built here and the traditional venture capital model. A lot of Wisconsin startups aren't designed to be quick 10x exits. They're solid, growing businesses that just need more time.

That's not a weakness, but it does mean founders need to think carefully about what kind of funding actually fits their timeline and goals.

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If you take equity investment, success means selling your company

Laura put this pretty bluntly: if you take angel investment or venture capital money, success in that model is selling your company. Hard stop. There's no other way for those investors to get their return.

So before you start chasing equity funding, you need to ask yourself some honest questions. Do you actually want to sell this thing someday? Can you realistically build something attractive enough to acquire? Are you okay with the pressure of hitting the numbers that make an exit possible?

If you're dreaming of building a legacy business that you run for 20 years and pass down to your kids, traditional equity investment probably isn't the right path. And that's okay. There are other options. You just need to know what you're signing up for.

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How you handle failure determines your future opportunities

One of the most interesting things Laura shared was that after her cancer drug development company failed financially, multiple angel investors told her they would invest with her again. That's huge.

And it came down to one thing: she was a good steward of their money. She executed on the plans she said she would execute on. The science didn't work out, but she did everything she could in good faith.

Investors understand that startups fail. What they're watching for is whether you were honest, whether you worked hard, and whether you made smart decisions with their capital. If you can demonstrate integrity even when things don't go the way anyone hoped, you preserve relationships and open doors for whatever comes next.

Individuals are the real catalysts in any startup ecosystem

When we talked about what makes a startup ecosystem work, Laura made a point that really resonated with me. Organizations matter, but individuals are the ones who actually make things happen. Whether someone is running a formal program or just organizing a meetup on the side, it's specific people taking initiative that moves the needle.

She mentioned noticing a lot of energy coming out of Milwaukee's startup scene lately and wondering if Madison was keeping up. That kind of healthy competition between cities is great, but the lesson is the same everywhere.

If you want your ecosystem to thrive, it starts with individuals showing up and putting in the work. You can't just rely on institutions to do it for you.

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The capital you take shapes what you end up building

This is one of those insights that sounds obvious but trips up a lot of founders. When you take money that comes with certain assumptions, you start building toward those assumptions whether you meant to or not.

Laura's advice is to think beyond just this fundraising round. Where do you need to be in 3 years? In 5 years? In 10 years? Map that out, even if it's just a rough sketch, and then find capital that actually aligns with that trajectory.

Don't just take money because it's accessible or because the investor is down the street. If the assumptions don't match, you'll end up building something different than what you set out to create. And that can really hurt your chances of success.

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Innovation comes from people doing the work

Laura shared something that got me excited about Wisconsin's potential in industries like manufacturing and agribusiness. Wisconsin is ranked number two in the country for manufacturing employment. That's a massive base of people who understand how things actually get made.

And here's the thing about innovation: it usually comes from people who are doing the work and notice something could be better. It's not some genius in a room somewhere theorizing about problems they've never experienced.

Laura mentioned seeing a map of all the small Wisconsin companies that supply parts to GE Healthcare. It's this whole network of businesses spread across the state. That kind of proximity to large companies and real industry expertise is where startup opportunities hide. We might just not be looking hard enough yet.

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What is the Startup Wisconsin Podcast?

A new show where you can learn about Wisconsin's growing tech scene. Hear the stories of startups, founders, investors, and the incredibly generous people making it happen every single day.

​See All 11 Episodes​

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Upcoming episodes 👀

• Jessica Silvaggi (UW Milwaukee Research Foundation)
• Michael Ceely (Coaching for Entrepreneurs)
• Ben Camp (Recovery.com)
• Russ From (Wayfi Wireless)
• Angela Damiani (Midwest Founders Community)
• Joey Friedli (Trashpoint)
• Jillian Bichanich (Growing Cubbi and Launching a 2nd Startup)

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Have questions?
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jacob@startupwi.org

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