Gov. Scott Walker and many Senate members from both parties support a new investment program in which the state would raise about $100 million. Instead of investing through CAPCOs, a manager hired by the state would put this money into venture capital funds that would finance Wisconsin start-up companies. Other states with similar programs have earned their principal back and shared in profits from successful companies.Thanks largely to the University of Wisconsin-Madison, the state accounts for more than 2% of the nation's academic research spending and patent filings. However, companies here receive just 0.55% of the nation's venture capital investment dollars, according to Zach Brandon, director of the Wisconsin Angel Network of entrepreneurial investors. If companies here were attracting their share of venture capital, the state would have about 200,000 more new jobs than it has, Brandon estimates.

Efforts to pass the Senate's venture capital program stalled last fall when Fitzgerald, who is running for U.S. Senate, said he preferred a bigger program that would include a role for CAPCOs. He asked Reps. Mike Kulglitsch (R-New Berlin), Gary Tauchen (R-Bonduel) and John Klenke (R-Green Bay) to craft the alternative Assembly plan.

Lobbyists for the CAPCOs advocated an approach similar to the one they sold to lawmakers in 1999. The CAPCOs said they would tap insurance company investors and finance young businesses to propel the state's economy, if the state would front them the money through future tax revenue. The last program failed to deliver on that promise.

State Sen. Glenn Grothman (R-West Bend), who voted for the 1999 bill, now considers such CAPCO programs "arguably the most unethical pieces of legislation I've seen since I've been in Madison."