By Tom Still

MADISON, Wis. – Wes Schroll holds no grudges against all the potential investors who said “no” to putting money into Fetch Rewards.

That’s good, because there were far more who said “no” than who said “yes,” especially in the company’s early days.

“As an entrepreneur, you’re going to get 19 no’s before one yes, if you’re lucky,” Schroll told attendees at the annual Wisconsin Entrepreneurs’ Conference, held Thursday on a virtual platform. “You just need to have confidence in your idea.”

Fetch Rewards, which Schroll founded in 2012 while still a student at UW-Madison, is a consumer rewards platform that has grown exponentially of late in terms of investment dollars, users and partners. Because the value of the company has reached $1 billion and climbing, it is what the tech and startup world calls a “unicorn,” a term that speaks to the uniqueness of such rapid growth.

Total investment in Fetch Rewards is about $350 million so far. It has about 500 employees in 34 states today and expects to reach 750 by the end of the year. Madison and Chicago are two “hubs,” although a remote-first approach means its workers can be just about anywhere. Fetch Rewards has millions of users who gain dividends such as gift cards by sending their receipts – from major brands, restaurants and more – via a convenient mobile app.

Schroll noted that Wisconsin has a strong base of angel and venture investors at the “seed” stage, meaning the earliest investments. He noted investments from Wisconsin Investment Partners, BrightStar Wisconsin Foundation and Great Oaks Venture Capital, which isn’t based in Wisconsin but whose founders are state natives. He also credited the Wisconsin Economic Development Corp. for early support.

When it came to later rounds, however, it became much harder to find investment dollars close to home.

Schroll and his team looked outside Wisconsin for most of the “Series A” investment rounds and beyond. That wasn’t because local investors turned their backs on the company, but that kind of money isn’t generally available from Wisconsin-based investors.

Most of the funds domiciled in Wisconsin are small- to medium-sized by national standards. As a result, Wisconsin has one-third of 1% of all U.S. venture capital assets under management – with nearly 2% of the U.S. population.

About 80% of all U.S. venture capital is centered in California, Massachusetts, New York and Texas – so those are states where Schroll and Fetch Rewards looked for investors.

The company was successful and Schroll kept Fetch Rewards rooted in Wisconsin, but not all companies in a similar situation do so. Too often, Wisconsin startups are tempted to move elsewhere in search of the investment dollars they need to move to the next stage.

That’s why the state budget bill under consideration in the Wisconsin Legislature contains a proposed $100-million state investment in a “fund of funds” that would be privately matched by other investors, including those from outside Wisconsin who could bring more dollars to the process.

Such funds are not unusual, especially in other states and cities. Funds of funds are essentially “umbrella funds” that often aggregate many investors. States such as Michigan, Indiana, Illinois, Ohio, Utah, New Mexico, Georgia and more have such funds, as do cities such as Cincinnati and Houston. Michigan’s fund experiences brought many non-Michigan investors to the state – which was just recognized as the fastest-growing venture capital hub in the nation.

Investors in coastal venture centers are looking for deals elsewhere for reasons that range from cost of doing business, reasonable company valuations, quality of life for company founders and employees, and proximity to other resources. In fact, research by the Wisconsin Technology Council shows that non-Wisconsin investors are a part of roughly one in three state deals.

That’s a good reason to entice more out-of-state investors, especially those who bring the kind of dollars needed to bring certain types of companies to scale. Health-related companies that have long regulatory pathways are one example; consumer platforms such as Fetch Rewards, which needs a nationwide base, are another example.

Wes Schroll has kept Fetch Rewards in Wisconsin because he wanted to do so. Others may not have that “Badger State” dedication unless they can find the money to stay here.

Still is president of the Wisconsin Technology Council. He can be reached at