Jason Stein points to Madison’s Guild.com as an example of how “critical that [venture capital] funding can be”:

In the late 1990s, Sikes dreamed of turning her Madison art catalog and publishing business into an Internet site that could sell pieces of art directly to the public. With millions in venture money to strengthen it, Guild.com survived the dot.com bust and now has 35 employees.
“Venture capital helped build this company to what it is today,” Sikes said. “The reason most start-up businesses fail is because they’re undercapitalized. There is an enormous need in Wisconsin for more venture capital.”
Fred Schwarzer, managing director of Charter Life Sciences in Palo Alto, Calif., said most venture capitalists stay relatively close to their East and West Coast offices and don’t get a chance to discover Madison companies like Guild.com.

Rather than drinking the kool aid and simply printing Guild CEO Toni Sike’s statements, Stein should have dug in a bit and run a quick Google search and found that:

• Local investors lost millions during Guild’s chase for west coast VC money
• Guild was bought back from Ashford for less than pennies on the dollar

Holding up guild.com as a local vc success story would be like the folks in Silicon Valley point to their substantial VC investments in massive failure webvan as an example of why they need more venture funding. Local NBC affiliate channel 15 (now a friend of Capital Newspapers madison.com site (!)) ran a brief story on Guild a few years ago. No mention was made of their financial history. I phoned the reporter after the segment aired and asked why this was omitted. She said: “well, the local investors got to keep their [worthless] stock”.
I’m not sure we can point to any successful VC backed firm here. Rather, we can look to those firms that have built businesses brick by brick, such as Epic systems. This lack of big numbers points to the real problem, too few folks are willing to take risks…. (Sikes took some, for sure, but let’s tell the whole story).
Unfortunately, this type of hype is quickly dismissed by anyone doing their homework, which the serious VC’s will do.