Pioneer Square Labs – Investing More In Seattle

Pioneer Square Labs (PSL) launched today. We led the round and I’m joining the board. PSL, based in Seattle, is a not a VC firm, accelerator, or incubator, but instead is a startup studio, which is a company that creates companies.

The co-founders are Greg Gottesman, Geoff Entress, Mike Galgon, and Ben Gilbert. Greg is a co-founder of Madrona and long-time VC. Geoff worked with Greg at Madrona for a decade and is one of the most prolific and successful angel investors in the Pacific Northwest. Mike was the co-founder of aQuantive which was acquired by Microsoft for $6.2 billion. Ben was a co-founder of Madrona Labs with Greg.

PSL was announced today at GeekWire’s conference and there’s an extremely comprehensive post explaining how it works at Top Seattle investors raise $12.5M for new ‘startup studio’ Pioneer Square LabsMarcelo Calbucci, who is part of PSL, explains in his post Next Chapter: Pioneer Square Labswhy he joined and what’s unique about the approach.

At Foundry Group, we’ve experimented with lots of different things around company creation and early stage investment. In addition to our direct investing, we co-founded Techstars which has had a profound impact on company creation around the world. Techstars now owns Startup Weekend and Startup Week, which extend Techstars impact on and support of the Entrepreneurs Journey. We’ve made over 60 investments through FG Angels – our AngelList syndicate – and are one of the most prolific investors on that platform. We’ve invested in over 30 VC seed funds and emerging managers, supporting even more investors and founders at the early stages.

We have a lot of investments in Seattle. Currently active ones include Rover.com, Spare5, Moz, Glowforge, Cheezburger, and Impinj (via our Mobius funds). Previous investments include Gist (acquired by RIM) and BigDoor (which failed). Mattermark, which is based in San Francisco, just opened an office in Seattle. Techstars has a big presence there, including much of the team from Startup Weekend. And we have another new investment based in Seattle that should close mid-October.

We’ve known and worked with Greg Gottesman for over a decade. We consider him one of our closest friends and most trusted partners in the VC world. We’ve had ups and downs together, which is critical to building a real relationship in this business (if everything is good, it’s bullshit, and if everything is bad, it’s no fun.)

When Greg started talking to us about the idea for Pioneer Square Labs, we were immediately interested. Two of our Seattle investments – Rover.com and Spare5 – came out of the Labs effort that Greg created at Madrona. While Rover.com preceded Labs (and was actually a Startup Weekend project that Greg led the team for), it was the prototype for Labs so we understood the concept well. Both Rover.com and Spare5 are doing great and validated the premise of the Labs concept for us.

The last piece of the puzzle was how to fund something like this. I encouraged Greg to have an extensive syndicate of VCs and angels as the goal was to build an engaged, invested community around PSL. The result is a magnificent group of 13 VCs and over 50 angel investors.

When we saw the opportunity to invest even more in Seattle, working with three of the strongest leaders we know in the early stage market with an amazing collection of VCs and angel investors, jumping in with both feet was a no-brainer.

  • Gordon Flammer

    This is a great counterpoint that closes the loop on your post yesterday as it seems in this case the amazing product is the people.

  • Thanks for the shout out Brad. I’m super excited to join this journey!

  • greggottesman

    I just want to thank Brad publicly here. When I came to Brad with this idea earlier this year, his first reaction was very simple and authentic: what can I do to help? It wasn’t about money or why this
    might (or might not) be good for Foundry or Brad. It was about honestly figuring out whether this idea made sense and how he could help make it better. The investment stuff came much later. As a VC for almost 20 years, having worked with many hundreds of investors, I can tell you that’s not typical. Having Brad lead our round and be a part of what we are building is a privilege we won’t take lightly.

    • David Ngo

      That’s a rare attitude to come across. An honest curiosity for the truth and for giving an idea a fair shot, is always valued in any professional environment. I found the best designers, managers, investors, etc are all able to put aside their preconceived notions or opinions, and take a collaborative approach to finding the best solutions. (And on the flip-side are also able to put them aside when they don’t work out without too much personal attachment)

      I’m so excited to see how your grand experiment works out. I come from Stanford’s Design Program, so I’m very much a proponent of rapid prototyping startup ideas. And there are so many great ideas that come out of such “ideation factories” that sort of die on the vine, because nobody is there to take it out of its infancy stage.

      There’s two sides to the entrepreneur life that you guys are finally joining together. On the one side, you have curious risk-takers and experimenters like myself that love to come up with new ideas and test them out in the field as quickly and cheaply as possible. But like many other entrepreneurs, I found this is limited by how much savings or funding I can procure. And I’m often wondering, “What is it that I don’t know, that someone else with more experience would know, that could be the missing piece to really scale this idea?” And I also think finding the right people to “grow” the idea to a thriving business, is not always the person who came up with the original idea or tested it out.

      Then on the other side you have experienced folks at big companies that would love to start a business, but don’t have the idea or want to take the big risk of testing it out. People with obligations, but with vast experience they could leverage.

      Finding the right match, of course, is the hardest and most challenging part of that equation. That and determining the right level of “traction” or metrics of success to say that this idea is “ready for primetime” or the handoff. But the latter I bet is easier to determine with enough intuition from doing multiple startups already.

      Anyway, I’m super excited by Pioneer Square Labs and would love to help out in any way I can. I live in SF, but you are seriously making me reconsider whether I should move to Seattle. 🙂

    • Jesse Schenk

      Saw you at the summit Greg, some very cool ideas you guys have.

  • buzzbruggeman

    Great to see good friends put this all together. Reminds me of the Biblical quote “from those who are given much, much is expected”, and I have no doubt PSL will will meet and exceed that idea.

  • tamccann

    As a good friend to Brad, Greg, Geoff and much of the team and one of the angels in PSL, I am ecstatic about the whole thing. And, having started Gist in a similar way, I know the model can work! I feel privileged to be involved and so excited to have another reason for Brad and the Foundry crew to be in Seattle more often!

  • Talk about a stellar team. Can’t wait to see what comes out of this new startup lab…

  • Love to hear the reflections and generalizable lessons along the way of what makes the “studio” or “labs” model work at some scale. There are some really interesting variants out there already and curious to see how PSL compares…

    • Yup – I’m sure they / I’ll be writing plenty about it.

  • Kenneth Lustig

    Having worked with many of you over the last decade, I cannot think of a stronger team to enable this model in Seattle. This will be a terrific edition to the Seattle startup community. Very much looking forward to watching PSL develop and the learnings by Greg, Brad and the team, along the journey.

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