Valency Fund: A New Approach to Scaling WI Startups

Valency Fund is a unique, non-profit fund designed to bridge a critical funding gap for growth-stage businesses in Wisconsin. Founded by Laura Strong, Ph.D., a seasoned biotech leader and strategic investor, the fund aims to support companies in three of the state’s core industries: advanced manufacturing, agribusiness, and technology.

With a mission to foster sustainable economic impact through innovative capital solutions and strategic partnerships, Valency Fund seeks to empower founders who are ready to grow but face challenges securing traditional venture capital or bank loans. The fund prioritizes companies with predictable, recurring revenue and a clear path to profitability, offering flexible financing options such as revenue-based financing, supply chain financing, and redeemable equity.

Fund founder and CEO Laura Strong sat down with MKEStartup.News (MSUN) to share her vision for Valency Fund, insights into its funding philosophy, and the unique approaches being explored to help Wisconsin companies thrive.

MSUN: What inspired you to create Valency Fund?

Strong: I have been in the biotech and entrepreneurship ecosystem in Wisconsin for the last 25 years. Through that time, I founded companies, mentored startups, and saw a persistent funding gap. Some businesses weren’t a good fit for venture capital because they didn’t have that rapid financial growth potential, and they also weren’t ideal candidates for traditional bank loans. That gap often stalls growth, and I wanted to find a way to address it.

MSUN: What makes Valency Fund’s approach to funding different from traditional venture capital or bank loans?

Strong: We’re testing a few financial mechanisms that sit between those two extremes. One interesting model is revenue-based financing, which is common for SaaS companies. We’re exploring how to apply that to other high-margin businesses that don’t fit the SaaS model. Additionally, we’re looking at supply chain financing, which helps companies leverage capital from their existing customer base. Another unique approach is redeemable equity, which allows companies to buy back equity from the fund rather than being pressured to sell the business. It’s a model that aligns well with Wisconsin’s culture of building generational companies.

MSUN: Why did you decide to structure Valency Fund as a nonprofit?

 Strong: Our goal is to make money and recycle that capital back into Wisconsin businesses. By being a nonprofit, we have the flexibility to experiment with different financing vehicles without the pressure of delivering rapid returns to investors. This structure allows us to focus on sustainable growth while still generating returns that can be reinvested locally.

MSUN: What kind of businesses are eligible for Valency Fund support?

Strong: We partner with growth-stage companies in Wisconsin’s core industries: advanced manufacturing, agribusiness, and technology. These businesses must have recurring revenue and a clear path to profitability. They should also be at an inflection point where additional risk capital can significantly accelerate growth.

MSUN: When do you anticipate making your first investment?

 Strong: I expect our first investment to happen sometime in 2025, after we complete our ongoing customer research to identify the most effective financial models. Our initial hypothesis is that companies will be looking for capital infusions in the range of $100,000 to $500,000.

MSUN: What kind of impact do you hope Valency Fund will have on Wisconsin’s entrepreneurial ecosystem?

Strong: I hope to catalyze sustainable growth by forging strong connections between founders, partners, and resources. Just as the word “valency” in chemistry reflects the capacity of atoms to form bonds, the fund aims to unite the right resources to help companies thrive. Ultimately, we want to support Wisconsin businesses in building a robust, scalable foundation for long-term success.

To learn more about Valency Fund, connect with the organization here.