When Madrona was founded 30 years ago, the internet browser was just emerging. Venture capital — at least here in the Pacific Northwest — was nascent. Yet, four visionary founders put their own capital at risk, starting Madrona to help founders build new companies. As we discussed at our Annual Meeting on March 18, that same spirit exists today. In fact, the very definition of venture is “a daring and risky journey,” and we endeavor to share that journey with exceptional founders every step of the way.
The inevitable ups and downs of any journey worth taking apply to all participants: Founders setting out to build something that doesn’t yet exist, employees choosing an uncertain startup over a predictable job, angel investors backing that vision long before product-market fit, and firms like Madrona, building multi-decade partnerships with outstanding entrepreneurs and investors through all types of global macro, technology industry, and venture capital market cycles.
Over the years, the adventures have taken us from the early days of SaaS, cloud, and mobile to the rise of intelligent applications that today are accelerating further in the era of agentic AI. But one of the constants is the relationship between risk and reward — and the belief that when navigated with purpose and long-term conviction, those two can work productively together to create value.
Experience and Perspective as Our Guide
Looking back on past Madrona milestone anniversaries, we were just emerging from the great financial crisis in 2010 when we celebrated our 15th, along with the fund-making sale of Isilon to EMC. Our 20th anniversary came along in 2015 as cloud-native companies such as Smartsheet, Apptio, and Heptio were accelerating their growth. At our 25th anniversary in 2020, Madrona helped launch and support All-In-Seattle and other high-impact causes to provide for those in need, just weeks after COVID reshaped the world.
This year, we celebrated our 30th with a memorable conversation between Microsoft CEO Satya Nadella and Madrona Managing Director Soma Somasegar in the context of what we believe is one of the most globally transformational technologies ever: Applied AI that enables automated reasoning.
Through each of these cycles, we’ve remained grounded in the same principles. We believe in prepared minds, not just so we can recognize disruptive technologies and trends early but also so we can help founders capitalize on them. We look for founder-market fit, where the “why us” is as powerful as the “why now.” And we stay focused, investing primarily in our core areas of technology and geographic capabilities and conviction — with the scale, experience, and network to go long.
The Current Market and Madrona Context
2025 has the potential to be a more risk-on innovation market environment, even amid lingering macro uncertainty. Inflation has substantially moderated. Interest rates are steady and likely to decline. Public and private companies are getting leaner and more focused. And both strategic buyers (as evidenced by the Google —> Wiz and ServiceNow —> Moveworks transactions) and private equity firms are ramping up their acquisition interest with substantial capital to deploy.
In that kind of environment, taking smart risks matter more than ever.
We’re seeing the questions shift from defense to offense —from “How do we clarify business drivers and extend runway?” to “How can we accelerate into a stronger market position?” Founders are experimenting more aggressively again. Companies that can sustainably execute are stepping into category leadership.
The race to capture value from applied AI is on. But, as we highlighted over a year ago and again at our Annual Meeting, the most important AI model is the business model. We believe enduring value will be captured not in frontier AI models but in layered abstractions, vertical workflows, and business-model innovation.
In that dynamic context, our view of company building through engaged partnership remains a constant. We roll up our sleeves on day one and are actively involved through every phase of the journey. That’s what founders expect — and that’s what our investors, primarily university endowments and foundations, value. Now, with $770 million of new capital entrusted to our team across Madrona’s early-stage Fund X and acceleration-stage Fund IV, we’re a firm with the fresh capital, team resources, and operating experience to continue going the distance with founders. We’ve never been more energized for the opportunities to help build the next generation of transformational companies in the Pacific Northwest, Silicon Valley, and beyond.
A Virtuous Cycle that Transcends Market Cycles
One of the images we shared at our Annual Meeting was the Madrona “family tree” — a visualization of the companies, people, and ideas that have grown out of this ecosystem over many years. From Amazon and Microsoft to early pioneers in SaaS like Concur and Smartsheet, consumer disruptors like Redfin and Rover, and early AI/data innovators like Snowflake and AI2 — these branches tell a story of risks taken that improved the world.
That sense of interconnected growth was also reflected in the newly released Innovate State map — an interactive view of the Greater Seattle startup economy developed by Greater Seattle Partners, Microsoft, GeekWire, and others. We’re honored to be recognized as one of the region’s top anchor institutions helping propel this ecosystem forward.
Perhaps even more powerful than how the ecosystem looks today is the idea of the virtuous cycle that the tree and map represent: the founders who return to build again or pay it forward to the next generation of entrepreneurs. The ambitious builders who spin out of established companies to start something new. The cycles of technology disruption that inspire people to reach for the stars while maintaining the values that keep us all grounded during the inevitable ups and down.
That’s the journey for Madrona and our portfolio companies. Risky? Absolutely. But as we’ve seen time and again — when you believe early in and actively support founders who have genuine “founder-market fit” and the curiosity, triangulation, and decisiveness to succeed — the reward is worth it.
Here’s to the next 30 years!
