Madrona at 25, Reflections and Looking Ahead

Wow, this was not the 25th year we had envisioned. What this year has done is bring us together and has brought to the forefront how important community is for all of us – individually and as a venture firm. The essay below is an excerpt from a book we produced about the history of the firm and Seattle’s growth – it is from the entire Madrona team to the amazing community of innovators around us.

And if you want some history – check out How do You Start a Venture Firm? Here’s Our Story – a Founded & Funded podcast with early Madrona founders and team members telling the story in their own words.

We all have dreams and the power to imagine what might be possible. If you focus on a real need and a real opportunity that appears to be timed right, you might just turn the improbable into the inevitable. Amazon, Isilon, Redfin, Smartsheet, Snowflake, Apptio and many more of our companies did just that.

Anything that is truly aspirational needs grounding in some core principles and beliefs. Words and actions you can live by on a daily basis like curiosity, humility and integrity guide you in both good times and hard times. And, with a little good fortune, you might learn your way into a winning core strategy that can persist for decades and potentially change the world.

At Madrona, our core focus is helping exceptional entrepreneurs and their teams create successful technology companies primarily based in the Pacific Northwest. We roll up our sleeves from Day One and bring a long-term perspective to the company building journey.

At Madrona, our core focus is helping exceptional entrepreneurs and their teams create successful technology companies primarily based in the Pacific Northwest. We roll up our sleeves from Day One and bring a long-term perspective to the company building journey. We also have a mindset that there are immense opportunities to innovate that will persist for decades to come. So, as we help build the next generation of lasting companies, we are trying to build a bigger pie of economic success and opportunity across our entire community.

One of Madrona’s founders, Bill Ruckelshaus, liked to remind us that things never change as much in one year as you expect they will, but they change more in a decade than you could possibly imagine. And, things have changed more since 1995 than we could have imagined. We have moved from hardware to the cloud, from client-server to intelligent software-as-a-service and from PC’s to “always on” smartphones. The changes are immense across many different aspects of technology, business models and societal expectations – but what remains the same is the human element.

We start with extraordinarily talented entrepreneurs – believing in them, supporting them, opening doors for them. And that effort involves the whole Madrona family, inside and outside the firm, to help those entrepreneurs and their companies succeed. Employees at our companies, researchers at the University of Washington and beyond, investors who believe in us, and countless partners in the broader ecosystem; together we are working to build world changing technologies, businesses and communities. After all, in the innovation ecosystem it is still Day One and we believe that will be true for the long run.

The next 25 years…

At Madrona, we have been committed to a consistent strategy for 25 years. We have also foreseen and embraced changes in customers, technologies and society that produced countless breakthrough products and companies. This combination of anticipating change and sticking to core principles is at the heart and soul of Madrona’s plans for the next 25 years.

That means, we will continue to be founder-driven as the next generation comes up with new ideas we can’t even imagine today. For the future founders in our midst, it is your grit, optimism and insatiable curiosity to solve problems better than they have ever been solved before that inspires us. And, that too will never change.

There’s no reliable way to forecast what’s going to happen over the next 25 years. We know from experience we will get some things wrong, but there are a few major trends we can envision. Technology will increasingly be involved with every interaction we have in the physical world, from home to store to vehicles. Devices and sensors will become more ubiquitous and less observable enabling humans and “things” to be constantly connected. Software will be infused with data and machine learning to become “dataware” and augment human intelligence in almost every vocation. Combining DNA, the code of life, with human-generated code will unlock intersections of innovation in the biological and computer sciences previously unimaginable.

One thing is for sure. Nothing can shake our belief in this region’s entrepreneurs to see around corners and build technology that will change the world.

One thing is for sure. Nothing can shake our belief in this region’s entrepreneurs to see around corners and build technology that will change the world. Seattle and the entire Pacific Northwest will be a global powerhouse in technology innovation for decades to come, at a pace faster and more innovative than elsewhere.

So many people including entrepreneurs, investors, community, team and family members have supported us throughout Madrona’s journey. Thank you for your partnership and friendship. We are excited about pioneering, discovering and innovating together for many years to come.

Welcome Anu!

We are thrilled to welcome Anu Sharma to the investment team at Madrona. Anu brings to our firm the rare combination of leading cutting-edge products and scaling new services at Amazon Web Services, co-founding her own startup, working as a venture capitalist, and writing code for enterprise products as a developer.

I had the pleasure of meeting Anu at AWS’ re:Invent conference several years ago. We stayed in touch, along with a number of others at Madrona, like Soma Somasegar, comparing notes on technology trends and new company opportunities. Even more important than her rare combination of experiences, we were struck from the outset by Anu’s insightful thinking and strong culture fit with our approach at Madrona. Specifically, her team and people focus, customer orientation, collaborative and warm interactions, long-term thinking, passion for products and technology, and curious mind. So, fast forward several years, and we could not be more excited to have Anu joining our team.

Most recently, Anu led product management for AWS Outposts, a fully managed service that extends AWS infrastructure, AWS services, APIs, and tools to virtually any datacenter, co-location space, or customer premises. This experience squarely in the center of enterprise customers embracing the cloud computing model and hybrid clouds gave her incredible purview into many of the broader trends around the next generation of enterprise software infrastructure. Over the course of her 8 years at AWS, Anu also had the opportunity to work on a variety of other products, including EC2 accelerated instances and Firecracker, enabling many related technologies — such as machine learning and serverless — that underpin many of our most exciting investment themes.

Beyond this deep understanding of enterprise customers and cloud technologies, Anu previously was herself a co-founder of a company, LifeLemon, in the consumer apparel e-commerce space. This appreciation of what it is like to walk in the founder’s shoes is an invaluable asset as she now turns to helping entrepreneurs with their journeys. Further, in addition to stints leading marketing at Flipkart (their 40th employee) and a developer at Oracle, Anu also spent two years as an Associate at Softbank Venture Capital in India. This broad experience building products, founding and operating a company, and helping founders scale their businesses, in both enterprise and consumer segments, will allow her to bring a wealth of empathy, assistance and insights to companies in our portfolio and founders across the Pacific NW.

“Working with world class teams can be a once-in-a-lifetime opportunity, and Madrona has stood out as one such remarkable team for me. Involved from day one in building and scaling businesses, Madrona has been a genuine partner for young companies in the Pacific NW. I’m excited to be part of the team that has seen what growth at successful businesses looks like and is committed to partnering with founders focused on solving problems for their customers,” said Anu.

Anu has hit the ground running in her first week. She looks forward to meeting and engaging all of you in the Pacific NW innovation economy. Anu will work with our current portfolio and also work with founders who are in the early stages and are looking for a partner and funding to help grow their company. Look her up! Anu is particularly interested in next generation infrastructure services, intelligent applications, and financial services.

You can follow Anu on Twitter here: @anusharma.

Madrona Welcomes Katie Drucker and Mark Britton to the Team

Today, Madrona announced the hiring of technology entrepreneur, investor, and advisor, Katie Drucker, to head the industry and business development relationships and partnerships for Madrona and its portfolio of companies. Relationships, whether they be customer or partner, are crucial for companies at all stages. Recognizing this Madrona has built programs such as an annual CIO summit, CIO briefing days and regular tech meetups that bring enterprises and startups together. Katie will operationalize Madrona’s ability to create strategic relationships that move the needle for portfolio companies as they drive revenue, customer growth, and build market fit.

As the Head of Business Development and Partnerships, Katie brings a global and Seattle-based approach and network to building meaningful relationships with both corporate and governmental organizations looking to be on the cutting edge of technology innovation. Her role will include deepening and expanding of Madrona’s network of senior execs, advising companies on partnership strategies, and building deep customer relationships – all designed to enhance customer and partner engagement programs for Madrona’s portfolio.

Katie brings a career of building partnerships and creating networks at the highest levels as a founder, CEO and COO of technology-based startups in SaaS and cyber security and six years as an investor at Trilogy Equity where she sourced deals, served on boards, and developed strategic relationships. Within this role Katie led deals focused on the mobile industry, helped source and recruit talent, and led investments and follow on rounds for early stage companies. Most recently she was the Managing Partner at Cascade Target Group, a business development and consulting company focused on elevating technology startups to government agencies. Prior to Cascade, Katie was co-founder and CEO at Sigby/Protemo and COO of PolyVerse, where she led fundraising, shipped products, and drove business development and ecosystem creation. She is excited to focus in developing the tech ecosystem that surrounds Madrona and its portfolio companies, driving new opportunities and value for all stakeholders.

Mark Britton joined Madrona in early 2019 as a Strategic Director. As a long-time fixture in the Seattle technology scene for his perseverance and leadership of Avvo, Mark brings a point of view to Madrona built over a career of company building one of the landmark Seattle companies. Starting life as an SEC lawyer, Mark quickly discovered the entrepreneurial bug and founded Avvo in 2006, a marketplace to provide regular people with information and access to legal counsel. The company raised $132 million and was acquired by Internet Brands in January of 2018. Mark left Avvo in April to explore his next steps and we are excited that part of that step is working with Madrona and our portfolio companies.

Strategic Directors are established operators who work with the Madrona team as we evaluate investment thesis and specific companies, while also sharing their incredible wealth of knowledge with Madrona’s portfolio companies. Other recently appointed Strategic Directors at Madrona are Steve Singh, Betsy Sutter, Sujal Patel and John McAdam.

“As Madrona builds our team to support Seattle entrepreneurs we couldn’t be more excited to have Katie and Mark on board. We are excited to have Katie bring her drive and network to play an integral role with all of our companies as they work with us leading up to and after funding. We spend intense time with our companies, focused on adding value to them and their team from day one to the long run through their entire journey and go-to-market know-how and partnerships are incredibly valuable to companies of all sizes,” commented S. Somasegar. “Mark is an insightful leader and we are excited to have him on board to share his knowledge and experience of company building through economic ups and downs with us and with our portfolio companies. Having these two leaders on board illustrates our strong passion and capability to continue to deliver for our founders and companies. Welcome to both of them to the Madrona family.”

New Positions and Faces at Madrona

From left to right: Troy Cichos, Jennifer Chambers, Tasha Tieu, Ted Kummert. January 2019.

Recognizing the achievements of employees and the expanding footprint of the firm, Madrona today announced a set of changes to the core team that administers and operates the day to day business of the firm. Additionally, the firm expanded Venture Partner Ted Kummert’s role to include Chief Product Officer in Residence.

Also announced today that Hope Cochran became Managing Director.

In the administrative team, Troy Cichos was promoted to COO and Partner, and Jennifer Chambers was promoted to Administrative Partner. The firm also welcomes a new Controller, Tasha Tieu.

Running a venture firm with nearly $1.6 billion under management is no small feat. With five active funds, a staff of 35 including a value-add team and a full administrative assistant cohort, Madrona’s administrative team has taken on bigger and bigger roles over the past several years.

Troy Cichos joined Madrona in 1999 and was most recently Administrative Partner and CFO. Over the past twenty years, Troy has provided the firm with exemplary guidance as the firm has consistently raised funds, invested in companies, expanded in staff, facilities and founded new entities such as Madrona Venture Labs and Create33. As COO, Troy manages all legal, HR, IR, Tax/Audit for the firm and for Madrona’s venture funds. He manages the team of value-add staff and back office administrators and advises Madrona’s companies on financial management, tax, and legal issues. His role encompasses all operations of the firm.

“Troy brings a unique mix of subject-matter expertise, operational excellence, great people skills, and a love for Madrona and all our constituents. His leadership and counsel is indispensable to our firm and portfolio companies in areas from structuring deal documents, advising on tax strategy, consulting on leases and real estate questions, working with our investors, and providing leadership for all our firm’s operations. Troy always brings his A game and is a constant positive presence in the office and with all the important partners we work with to help our companies and support the Seattle ecosystem,” Tim Porter, Managing Director.

Jennifer Chambers joined Madrona in 1997 and as Administrative Partner works on both fund and Madrona office management. During her time at Madrona, she built and scaled the back office to accommodate the growth of Madrona’s funds, portfolio, team and facilities. As part of the value-add team she assists Madrona portfolio companies with the decisions and vendors they need to successfully set up their own back office – everything from choosing a benefits provider to finding office space. She works with Madrona’s investors as part of the fund management, both distributing and calling capital as needed in the life of a fund and planning and managing the content of our quarterly and annual meetings. Additionally, she manages a team of administrative assistants and Madrona facilities. Jennifer’s prior title was Fund Administrator.

“Jennifer has been a crucial piece to the success of Madrona. There are very few if any aspects of Madrona that Jennifer does not regularly influence and she sets the tone for Madrona’s culture with her contagious positive attitude,” Paul Goodrich, Managing Director.

Tasha Tieu joined Madrona in late 2018 as a controller focused on accounting, tax and audit functions for both Madrona and Madrona’s venture funds. She comes to Madrona from four years working in audit with technology and retail clients at EY. Tasha holds a Bachelor of Arts in Business Administration and Master’s in Professional Accounting from the University of Washington Michael G. Foster Business School. Tasha is also a Certified Public Accountant in the state of Washington.

Venture Partner Ted Kummert is excited to expand his role to Chief Product Officer in Residence. In this role, he works deeply with Madrona’s growing startups who are facing product, business or engineering challenges that require some hands on, in the trenches work.

Building on his over two decades at Microsoft leading the development of several of that company’s core enterprise products, Ted also spent four years at then Madrona portfolio company, Apptio, leading the transformation and creation of SaaS solutions for enterprise and federal CIOs and CFOs based on the company’s core platform. Apptio went public during his tenure and was recently acquired by Vista Equity Partners for ~$2billion.

Ted applies this and his years of management experience to work closely and, for extended periods of time, with engineering and management teams of Madrona portfolio companies in the early and growth stages to help navigate some of the difficult decisions they face as their business, product offerings and organizations grow and scale. Continuing to serve as a Venture Partner as well, Ted will also work on identifying, vetting and making new investments.

Kristina Bergman, Founder and CEO of Integris Software commented, “Ted has been an invaluable partner for our management and engineering team as we help companies comply with new data privacy laws, such as GDPR and CCPA – map data, apply policies, and automate remediation. Building for enterprises, especially in a heavily regulated area is a complex task and Ted’s years of experience helped us execute and build a highly scalable distributed solution for Data Privacy Automation that is being adopted by global brands to protect their most important assets.”

My Next Role – Managing Director at Madrona

Hope Cochran and Amy Nelson, Founder and CEO of The Riveter. March 2018.

I am so honored and excited to be expanding my role with the Madrona team. I have long admired Madrona, not only for their sustained excellence in investing in local NW companies, but for their well-earned reputation for doing so with intellectual rigor, hard-work and integrity. And when I joined the firm as a Venture Partner two years ago, I found that the Madrona reputation is built through careful attention to the needs of entrepreneurs. That is why I am proud to be deepening my relationship with Madrona as a Managing Director. It marks the beginning of a new professional adventure, one in which I plan to lean heavily upon my own experiences as an entrepreneur and CFO as I work directly with our companies.

People, first and foremost, will continue to be my overriding focus. Having been a founder and executive in both small and large companies, I understand what it’s like to create business plans, navigate tricky financings and launch new products and services; but as I reflect upon my own successes and failures in business, what is most impactful is the quality of the people within each venture. I understand the importance of surrounding yourself with talented and driven personalities who are comfortable in periods of tumultuous change, who keep calm and focused in times of crisis or extreme growth. The stresses and strains of being an entrepreneur can be very challenging day-to-day, but the rewards are worth the challenges. The most important of which has been the life-long relationships I have with the people from my previous companies, relationships that have been forged from periods of intense joy, frustration, success and failure. I’m looking forward to investing in NW entrepreneurs who are eager and ready for a similar ride. So as I develop my investment thesis while at Madrona, it will always start, and stop, with identifying great people and teams regardless of industry or technology. In my opinion, successful teams and leaders are the most important factor in any venture.

So what am I looking for in new ventures besides great entrepreneurs? I will obviously rely heavily on my past experiences. I have worked in several technology-based industries during my career as an entrepreneur and executive—ERP, B2B software (PeopleSoft/Oracle), telecom and wireless (Clearwire/Sprint) and most recently, video games (King Digital/Activision). In addition, I am on the Board and Audit committees for a diverse set of public companies – MongoDB, Hasbro and New Relic. All these experiences and roles will inform my analysis as I add to the Madrona portfolio with new investments. As I have led companies through period of rapid change, there have been several areas that always seem to need attention and improvement.

When a company grows quickly, processes often break under the strain. Having been an executive at companies that experience very rapid growth, I understand and appreciate that the systems and processes required to build a sustainable company must be flexible, scalable and easy to roll-out. Therefore, I am interested in cloud-based B2B systems and software that enable companies to be more nimble as they manage their internal and external processes. Legacy solutions that are inflexible and hard-to-upgrade just don’t work anymore. Furthermore, there is a great need for ML/AI and robotic automation processing to improve various internal processes within organizations. Every department within an organization, from tasks as varied as financial forecasting to determining efficient locations for holding inventory, can be improved with thoughtful application of technology.

In the role of CFO, you often realize that your best forecast, or most consistently produced dashboard is only as good as the data that sits below it (customer, inventory, financial, sales, etc.). How many times was I proud of my finance team’s ability to produce metrics, only to realize that the data behind it wasn’t being stored or sorted accurately?! Today, a company needs to be able to make instant decisions, based on trends and patterns they read in real time. The ease and speed of access, the cleanliness, consistency, analysis and protection of underlying corporate data is crucial.

Finally, CFOs ultimately deal with the money, so this is an area where I have my own bumps and bruises from first-hand experience. Banks come to you with promises of ease of use, the ability to quickly move money, invest it wisely, low fees, etc. But all CFOs know, this is an area of great frustration. It often comes with multiple fees, low yields and difficulty in managing across multiple institutions and regions. On a consumer level the problem is only magnified and often misunderstood by the individual user. There are a lot of burgeoning Fintech companies out there tackling many of these problems, but there is much to be done. As you watch the flow of funds from the point of a consumer or a business, it is astonishing how much margin is taken at each juncture – whether it be fees, the days lost in the movement, currency exchanges, credit card processing, etc. I love the innovation that is happening in this space – both at the level of large scale corporate clients to the individual consumer and look forward to finding and supporting companies that are diving into this challenge

It can’t be ignored that I am a woman executive and investor in a largely male world. I have loved my career but at times I have had to fight for it. It is a joy and passion of mine to support women to thrive in all ranks of a corporation. It is not an issue of not enough female talent in the workforce. I hear that counter-argument all the time and I am amazed that some believe this to be true – have they met the women I know?!

Businesses today can and are starting the journey to recognize the untapped talent they have in their diverse workforce. It needs intentionality. In my experience, it is not going to happen by being passive. I applaud companies and other organizations that are taking intentional steps to address equality in all areas of a company. And, I am a staunch believer that businesses today should be active in addressing equality of opportunity throughout their organizations, from boardroom and C suite and at every level and department.

Madrona has been a leader in working for greater equality at our companies. Over the past two years, I have led Madrona’s participation and support of OnBoarding Women, with our partners at Deloitte, Perkins Coie and Spencer Stuart. OnBoarding Women is focused on creating more opportunities for women to serve on corporate boards in the Pacific Northwest. At Madrona, we recognize that the disparity in the public company boardroom often starts when the company is private and the board is primarily investors – often not a very diverse group. By opening up independent seats early in a company’s journey, the company has the opportunity to diversify the perspective at a crucial point in the company lifecycle, ideally with a woman or otherwise diverse candidate. One of my fellow managing directors has had 5 of the last 6 independent director appointments on his portfolio company boards be women.

As I embark on the next phase of my career, I am so honored to be part of the Madrona team. My most important asset as a professional is my reputation. A reputation is shaped by the people with whom you surround yourself. I couldn’t ask to be surrounded by a more fantastic group than the entire Madrona team.

Terry Myerson Joins Madrona as Venture Partner

We are thrilled to announce that Terry Myerson is joining Madrona as a Venture Partner. Terry has a broad set of technical and business leadership experiences and has been a successful entrepreneur. His insights both at a technical and a business level combined with his penchant for action is something that will be valuable in working with start-ups and entrepreneurs whether they are at an early stage or have reached a level of scale at a later stage.

Terry joins us from a long and illustrious career at Microsoft where he was most recently the Executive Vice President for the Windows and Devices Group. While at Microsoft, Terry was responsible for the software platform and devices within Microsoft’s workplace, gaming and cloud solutions. This included Windows, Surface, Xbox, Windows Server, InTune, Advanced Threat Protection and HoloLens Mixed Reality.

Terry started out as an entrepreneur. He founded Intersé, one of the first web software companies, which Microsoft acquired in 1997.

At Microsoft he took that penchant for action that is crucial for startup founders to lead teams to create some of Microsoft’s most successful products. His team created Windows 10, which has the highest customer satisfaction of Microsoft platforms to-date with over 700 million customers and growing. Terry also led the Exchange team, during which time it became the world’s most popular business communications system and the foundation for Office 365.

I have had the opportunity to partner and work with Terry over the years right from the time he was working on Exchange and all the way up to when he was running the Windows business for Microsoft. Particularly as I was responsible for the developer products, there were many times when I partnered with Terry and his team who were building platforms to ensure we had a great developer story. During all those interactions, the thing that stood out the most for me was his laser focus on delivering value for the customers and ensuring customer success. There were also several instances where we ended up making shared technology bets and I knew that he would deliver.

Terry currently serves as a member of the board of trustees for Seattle Foundation, which is dedicated to making the great Seattle area a stronger and more vibrant community for all.

Venture Partners both look at new investment opportunities as well as help our existing portfolio companies with their management, engineering and business experience. Terry is a very seasoned operator and brings a lot to the table.

Please join us in welcoming Terry to Madrona.

Welcome Elisa La Cava

We are thrilled to introduce the newest member of our investment team, Elisa La Cava, who has joined Madrona as Senior Associate. We are fortunate to meet many, many impressive associate candidates, but Elisa really stood out with her mix of start-up, strategy consulting, and venture capital experiences. Elisa is going to be spending her time sourcing innovative companies, evaluating new investment opportunities, working with entrepreneurs across the portfolio, and broadly getting involved in the Pacific NW start-up ecosystem.

Elisa joins us after having completed her MBA at Northwestern’s Kellogg school in June. While in business school, she had an impactful internship at MATH Venture Partners conducting due diligence, portfolio analysis, and attending partner meetings each week. She also had a deep dive in M&A with an internship in the very active AT&T Corporate Development group. Prior to b-school, Elisa worked at Deloitte Consulting in Seattle where she worked with technology and life sciences companies. She was also involved in developing Deloitte’s first Diversity and Inclusion go-to-market strategy, as well as leading an international pro-bono consulting program for non-profits in Latin America.

Elisa has also been part of an early stage start-up and lived the various issues facing founders from the inside as an early employee at Seattle biofuel manufacturer General Biodiesel.

Elisa grew up in Woodinville and is happy to return to the PNW. We are excited for her to bring her large local network and passion for the region to bear engaging with founders across the region.

Elisa commented: “During business school, I had my first experience working in venture capital and instantly loved it because I could help innovative companies reach their full potential. From the moment I started meeting the team at Madrona, I knew that this was the place I wanted to do this longer-term. Madrona has a world-class team and the resources to help startups not only gain instant traction in today’s market, but also position themselves to adapt and scale as markets change. I am also passionate about the growth of the community here in Seattle, specifically, because it is my hometown. I am beyond excited to be back in Seattle and at Madrona, and am ready to dive in and help support the next wave of world-changing founders and startups.”

I’m sure you will see Elisa at a local startup event sometime soon. Hopefully you will have a chance to meet her and experience her drive and enthusiasm firsthand. I do caution challenging her to a tennis match, however, as she played four years and was captain of Claremont McKenna’s tennis team. While leading the tennis team, she also managed to dual major in Economics and Spanish.

Welcome Elisa!

Announcing $300 Million for Technology Entrepreneurs and Founders

Today the Madrona Team is gratified to announce our latest $300 million fund, Madrona Fund VII, for investing in exceptional technology entrepreneurs and founders in the Pacific Northwest from Day One. Our longstanding endowment, foundation and family office investors see a huge amount of opportunity for growth in our market. We agree – we think the next big technology trends of cloud computing, intelligent applications powered by AI/ML, multi-sense user interfaces and solutions combining the digital and physical world will drive the next decade of innovation are all happening in greater Seattle better than anywhere else in the world.

We look forward to working with great entrepreneurs, co-investors, and partners as we build the next big companies for the future. Here are the details: we raised $300 million from which we will make initial investments over the next 3-4 years and use to continue to support those companies over the long run – often for 10+ years. Four of our companies have IPO’d in the last two years (Smartsheet, Redfin, Apptio and Impinj) and they exemplify how we work. We were there at day one through the ups and downs for every one of those companies. The average time from inception to IPO for those companies was 12 years. We believe whole heartedly in the innovation of people in the Northwest and we are excited every day to get up and work with you to build success.

Thank you!

Below is our press release on the new fund.

Madrona Venture Group Expands Capital for Entrepreneurs in the Pacific Northwest – Announces a New $300 Million Fund for Early-Stage Technology Companies

Fresh from Four IPOs, Madrona’s Fund VII was Over-Subscribed with Investors Interested in Participating in the Growing Innovation Ecosystem in the Pacific Northwest

Seattle, WA – May 22, 2018 – Madrona Venture Group (www.madrona.com) today announced the closing of a $300 million investment fund, Madrona’s seventh. Madrona’s strategy is to partner with the most promising technology entrepreneurs and their teams from day one through the long term. Madrona primarily focuses on great founders based in the Pacific Northwest, which is home to two of the world’s four largest technology companies, Microsoft and Amazon, as well as a thriving technology and startup ecosystem.

In the past two years, four of Madrona’s portfolio companies have gone public. With each of these companies – Smartsheet, Redfin, Apptio and Impinj – Madrona was there at day one and partnered with the team every step of the way. The average time from initial investment to IPO for these companies was 12 years, exemplifying the firm’s long-term commitment to entrepreneurs.

“The entrepreneurs in our region continue to build exceptional companies on the leading edge of major customer, technology and business model changes. We believe cloud computing, intelligent applications powered by AI/ML, multi-sense user interfaces and solutions combining the digital and physical world will drive the next decade of innovation,” said Matt McIlwain, managing director, Madrona Venture Group. “On behalf of the entire Madrona team, we are proud to have the trust of our many limited partners and outstanding founders.”

Madrona Venture Group Managing Directors

Fund VII is Madrona’s seventh fund over the last 23 years and brings funds under management to nearly $1.6 billion. The oversubscribed fund is supported by a diverse set of repeat and long-term investors including the nation’s premier endowments, foundations, family offices, Outsourced Chief Investment Offices (OCIOs) and entrepreneurs.

Madrona’s philosophy of supporting technology entrepreneurs and startups in their earliest days continues with this fund, and the firm will deploy capital to lead and participate in seed and Series A investment rounds. In addition, the entire Madrona team will continue to roll up their sleeves to help with recruiting great talent, making strategic business decisions, amplifying company stories, connecting them with partners and customers and raising follow-on financings.

Mark Mader, long-time CEO of newly public Smartsheet (NYSE: SMAR) commented, “Madrona understood Smartsheet’s vision and the value of our innovation from our earliest days, even when some others did not. In the eleven years since, our partnership has yielded significant growth, supported by Madrona’s valued counsel on market trends, buyer needs, funding, executive talent, and ability to collaborate with other growth investors. As I reflect on the early decisions that made a positive difference for Smartsheet’s business, our decision to partner with Madrona is one that delivered in the short, medium, and long term.”

Madrona has been committed to supporting, spurring and fostering the innovation ecosystem in the Pacific Northwest over its history, ranging from creating Seattle’s first startup studio, Madrona Venture Labs, five years ago; launching and supporting Seattle TechStars; partnering with the University of Washington Allen School of Computer Science; and working with the angel investor community. This year, Madrona will open Floor 33, a Seattle innovation community co-located with Madrona that will house an expanded Madrona Venture Labs and a curated co-working space for founders and their teams featuring programming for residents and the entire community. This 22,000 square foot location will open later this summer.

Current and new portfolio companies will benefit from an expanded group of Managing Directors, investment professionals, Venture Partners and professionals dedicated to helping our companies succeed. Recent additions include: Managing Director, S. Somasegar; Venture Partners, Ted Kummert, Hope Cochran, and Luis Ceze; Strategic Director, Betsy Sutter; investment professionals Maria Karaivanova, Sudip Chakrabarti and Chris Picardo; Talent Director, Shannon Anderson; and Business Development and Investor Relations Director, Alice Ryder.

About Madrona

Madrona is an early stage venture capital firm in the Pacific Northwest. The firm invests in technology entrepreneurs and companies, and works with them to build their businesses. Madrona manages nearly $1.6 billion and was an early investor in companies such as Amazon.com, Apptio, Smartsheet, Rover.com, and Redfin.

Contact: Erika Shaffer erika@madrona.com 206-972-5514

Introducing Madrona’s Newest Strategic Director: Betsy Sutter

We are thrilled to have Betsy Sutter, Chief People Officer of VMware, join Madrona as a Strategic Director.

What is a “Strategic Director” at Madrona? Madrona is fortunate to have a select group of senior operational leaders who mentor talented founders and senior executives of Madrona portfolio companies, advise our rapidly growing companies, and help Madrona navigate key strategic decisions. Our Strategic Directors include Madrona founders, Jerry Grinstein and Bill Ruckelshaus, as well as successful technology company CEOs Steve Singh, Sujal Patel and John McAdam.

Betsy Sutter was VMware’s first HR leader, and she helped the company scale from under 150 employees when she joined to over 21,000 today (not to mention FY18 revenue of just under $8B). As Corporate Senior Vice President and Chief People Officer, she has worked with and advised VMware CEOs Diane Greene, Paul Maritz and Pat Gelsinger – three iconic technology leaders. She brings a unique perspective to Madrona and this role, as she has a keen insight and appreciation for building a strong culture, recruiting and retaining top talent and, critically, how this enables and aligns with business strategy and execution. She additionally plays a role as an industry thought leader and has spoken broadly about inclusion, diversity and building high-performance organizations.

We have already been fortunate to engage with Betsy in a number of different ways. She spoke at our CFO Conference in 2017 and has met with many of our portfolio company CEOs and senior leaders. In every case, our own team as well as our portfolio companies have been impressed with Betsy’s business insight, wisdom, infectious enthusiasm, practical advice, and bias for action. These insights will be incredibly helpful to portfolio companies, whether they are already at scale or at the formation stage.

Betsy has this to say on becoming a Strategic Director at Madrona:

A key element to successfully building the next generation of best-in-class companies is to, at the start, set the key culture and value tenants that will enable innovation. I am delighted to be part of Madrona’s incredible team, and I look forward to sharing my passion for helping companies develop strategies that empower their people, build communities, and ultimately thrive and scale.

Betsy, welcome to the Madrona family! We look forward to working and learning together and to helping to build the next generation of technology company success stories in the Pacific NW!

Welcome Sudip to Madrona

Today we are excited to welcome Sudip Chakrabarti to Madrona as a Partner on the Investment Team.

Sudip is the kind of team member we look for – someone who shares our passion for helping entrepreneurs build their companies from day one. When we first met, Sudip was an investor at Lightspeed Venture Partners in the valley, a team we have worked with for later stage fund raises for Madrona portfolio companies. His focus on cloud and infrastructure technologies means we crossed paths many times and we were impressed by not only his technical and business expertise in this market but also his approach to working with startups. He gets in and does the work to build companies and help founders succeed in realizing their vision. This is how Madrona approaches company building from day one – to day whatever – we are here to help companies succeed and build the greater Seattle ecosystem.

As a partner at Madrona, Sudip will be focused on investments in the enterprise, infrastructure markets including how open source software and technology is changing the enterprise software landscape.

Prior to joining Madrona, Sudip was a partner at Lightspeed Venture Partners where he led or co-led investments in Streamlio, Serverless, Rainnet, Exabeam and, a Madrona portfolio company, Heptio. He started his investing career at Osage University Partners and subsequently was an enterprise investor at Andreessen Horowitz where he was involved with companies such as Actifio, Databricks, Digital Ocean, Forward Networks, Mesosphere and Samsara.

Sudip also brings the experience of being a founder to the table with entrepreneurs and founders – he started two companies early in his career and understands first hand the triumphs and struggles of company building from day one.

Sudip is our second convert from the valley (Maria Karaivanova joined us from Cloudflare last year) and our first from a Valley VC. Please join us in welcoming Sudip to the Pacific Northwest!

Madrona Appoints Veteran Talent Executive, Shannon Anderson, Director of Talent

We are very excited to welcome Shannon to the Madrona team today as Director of Talent. The talent and recruiting role is crucial for startups and Shannon will supercharge Madrona’s recruiting efforts to help our companies find the right people to scale their businesses quickly.
Shannon will lead Madrona’s Talent function in three key areas:

  1. Power Madrona’s talent hub. Identify and develop top leadership talent and rising stars that will fuel Madrona portfolio companies, potential new investments, and enhance the Pacific NW startup ecosystem.
  2. Be a strategic HR business partner to portfolio companies, with a strong focus on bringing best-in-class talent acquisition practices to the portfolio.
  3. Be a Talent Advisor inside Madrona, providing a Talent perspective on the firm’s investments and decision-making.

In Shannon, we feel very fortunate to have found a proverbial “unicorn” given her experience in all of these areas. Very few, if any, other people have Shannon’s set of experiences that are so relevant to Madrona. She has been a hands-on recruiter, both in the “go-go” days of Microsoft and in running her own talent firm. She has recruited for leadership, engineering and business roles. She has been a Talent leader inside a VC firm (Ignition), and thus has experience with how a venture firm works and how to engage with portfolio companies. Most recently, at Recruiting Toolbox, Shannon has been training companies “how to fish” and become world-class at talent identification, acquisition and retention. All this is combined with Shannon’s massive network of friends and contacts made during her years contributing to the Seattle technology ecosystem.

We see how the right people can make or break a company – and when you get those people on board it can change growth trajectories – or conversely, can be too much overhead early in the game. Shannon is adept at not only finding people but understanding how companies grow and when certain roles are needed.

As Director of Talent at Madrona, Shannon and Talent Associate, Matt Witt, will partner with Madrona’s portfolio companies to define, develop and refine their talent roadmaps, create compelling employment branding, great candidate experiences and fully develop their recruiting and selection capabilities.

When Shannon approaches training for HR and recruiting teams at startups and mid-size companies, she focuses not only on teaching hiring managers and executives how to find and attract the best talent – but, equally importantly, she teaches methods that enable the interview and selection process to create a great 2-way fit, ensuring happy and productive employees that stay and grow with the company over time. As a recruiter, Shannon did this herself – which helped to create an 80% retention rate for key roles.

“I’ve been immersed in the greater Seattle ecosystem for many years. We are fortunate to have so much talent here – and a lot of new talent coming to the area,” commented Anderson. “My role is to help companies attract and keep the right Talent; that’s what gets me up and excited every day. Madrona has been a crucial component to the startup culture here for a long time, and I’m excited to be on the team and to get involved with our portfolio companies to create even more value and success for the Seattle region.”

Shannon is also a frequent speaker and entertaining blogger on all topics of recruiting, HR, and talent. You can find some of her work on Medium.

Madrona Expands the Team, Adds Talent Director, Venture Partner and Principal

Veteran Tech Talent Executive Shannon Anderson Joins as Director of Talent, Luis Ceze, a leader in computer systems architecture, machine learning, and DNA data storage joins as Venture Partner; Daniel Li is promoted to Principal

We are so excited to announce today some great additions to the Madrona Team. Each of these people is incredibly talented and will add a significant amount to what we can bring to our portfolio companies and to the greater Seattle ecosystem.

Shannon Anderson is joining us as Director of Talent. We expound on her role here.

Luis Ceze is joining the team as Venture Partner. Luis is an award-winning professor of computer science at the University of Washington, where he joined the faculty in 2007. His research focuses on the intersection of computer architecture, programming languages, molecular biology, and machine learning. At UW, he co-directs the Molecular Information Systems Lab where they are pioneering the technology to store data on synthetic DNA. He also co-directs the Sampa Lab, which focuses on the use of hardware/software co-design and approximate computing techniques for machine learning which enables efficient edge and server-side training and inference. He is a recipient of an NSF CAREER Award, a Sloan Research Fellowship, a Microsoft Research Faculty Fellowship, the IEEE TCCA Young Computer Architect Award and UIUC Distinguished Alumni Award. He is a member of the DARPA ISAT and MEC study groups, and consults for Microsoft.

Luis also has a track record of entrepreneurship. He spent the summer of 2017 with Madrona and has been a vital partner as we have evaluated new ideas and companies for several years. In 2008, Luis co-founded Corensic, a Madrona backed, UW-CSE spin-off company. We are excited to have him on board, continuing and building on Madrona’s long-standing relationship with UW CSE, and working formally with us to identify new companies and work closely with our portfolio companies.

Last but definitely not least, we promoted Daniel Li to Principal. Daniel joined us nearly three years ago and has been an incredible part of the Madrona team. He works tirelessly to not only analyze new markets and develop investment themes that help us envision future companies, but he also dives deeply into his passions. He has built apps that we use internally on a weekly basis at Madrona as well as given a Crypto 101 course to hundreds of people over the past year. He has also proven to be an indispensable partner to entrepreneurs, leading the Madrona investment in fast growing live streaming company, Gawkbox, last year. In addition to digital media and blockchain, Dan has done significant work in investment areas from autonomous vehicles, machine learning, and AR/VR. Dan brings an energy, curiosity and intelligence to everything he does and epitomizes what Madrona looks for in our companies and our team.

We are excited to continue to build the Madrona team to even better help entrepreneurs and further capitalize on the massive opportunity to build world-changing technology companies in the Pacific NW.

Welcome to Kush Parikh

This week, Kush Parikh came on board as an EIR (Entrepreneur-In-Residence) at Madrona. We are excited to have him on board.

You might know him as the former CEO of PayByPhone, the app that saves a lot of time for Seattle drivers and those in and many more cities in the US and Europe.

Kush moved to the Seattle area 11 years ago after being an “intrapreneur” at Texas Instruments working as a principal in their venture group and building several wireless semiconductor businesses including WLAN, Bluetooth and GPS before they became mainstays in our daily lives. Kush came to Seattle to join INRIX, a global leader in road traffic information. He grew to be the CBO (Chief Business Officer) at INRIX and stayed there till 2013. In 2014, Kush became the CEO of PayByPhone, the largest mobile payments company focused on the parking market in the world. The company grew quickly to over 13M users across North America and Europe, processing over $325M in payments and was acquired by Volkswagen Financial Services in 2016.

Kush brings domain experience in both enterprise and consumer services to Madrona. He continues to be an active advisor/investor in start-ups, including being on the Board of Directors of SightLife Surgical, the world leader in corneal care services with a mission to eradicate the planet of corneal blindness.

Outside of work, Kush enjoys golfing, travel and combining those hobbies with his family of four including two girls. Kush has a BSEE from Penn State, an MBA from Duke, and recently attended a CEO/CMO invitation only new economy marketing program jointly led by Columbia Business School and Google.

Welcome SmartAssist To The Madrona Family

It is exciting for me to announce our investment in SmartAssist and to welcome the team to our Madrona family. SmartAssist is applying AI to the business of customer support and is already assisting customers of brands you know including MailChimp and Twilio.

Application development and applications the last 10 years were primarily defined by movement to the cloud, SaaS delivery and touch as an interface. Looking ahead, we strongly believe that applications are going to be defined as intelligent applications with a broader set of natural user interfaces including voice/speech and vision. In our opinion, any application of consequence that is getting built now is an intelligent application. What differentiates the intelligent applications is the use of ML/AI and other techniques to apply on the ever-increasing data sets that enable applications to continuously learn and deliver more relevant and appropriate experience for the customers.

Applying ML/AI to intelligently automate use cases and workflows in enterprises is an area where we see a tremendous amount of opportunity and some of our recent investments reflect that investment thesis. As we think about beachhead use cases of ML/AI within enterprises, customer support stands out as one of the most tangible areas that could be fundamentally disrupted through technology.

By using intelligent routing, automated responses, and predictive modeling, SmartAssist helps enterprises significantly increase the efficiency and quality of services while decreasing customer service costs. The company is based on the platform developed by Wise.io which was acquired by GE in 2016. The team of Pradeep Rathinam and Prashant Luthra had a passion for this business and are taking that core business and building it into SmartAssist. Already they have secured some name brand customers. GE has an interest in the company and we expect to work with them as the company grows.

Another big reason for why we are excited about this investment is the entrepreneurial strength of the founding team. Both Pradeep and Prashant have led and been a part of successful start-ups in the past. Their focus and passion to make a difference in this space makes it a delight to partner with them.

We are thrilled to back the compelling vision of this leadership team and be part of a Seattle area start-up that is focused on driving customer success using ML/AI. All of us at Madrona are jazzed at the potential of what is possible here.

Looking forward to helping realize the potential with the SmartAssist team!