More cash for Pacific Northwest startups: Founders’ Co-op raises $25M fund, its largest ever

Founders’ Co-op Managing Partners Chris DeVore and Aviel Ginzburg. (Founders’ Co-op Photo)

More investment dollars are flowing into the Pacific Northwest startup ecosystem thanks to a new fund from Founders’ Co-op.

The Seattle-based early-stage venture capital firm just closed a $25 million fund, its fourth and largest ever since launching in 2008.

Founders’ Co-op will follow the same playbook it has used in years past: being the first institutional check and anchor tenant in the seed round for companies it bankrolls.

The firm writes checks in the $250,000-to-$750,000 range for budding startups across the Pacific Northwest. It has backed more than 90 startups, including companies such as Remitly, Outreach, Auth0, Crowd Cow, Apptentive, and others. Those companies have collectively gone on to raise more than $1.5 billion in follow-on capital.

“We aren’t thematic investors but are focused on technical founding teams solving hard problems into which they have unique insights, which tends to lead us to enterprise software, from developer tools up through workflow automation and systems of intelligence,” Founders’ Co-op Managing Partner Chris DeVore told GeekWire last week.

GeekWire previously reported on this fund last year, when Founders’ Co-op raised the initial dollars. The last fund clocked in at $20 million four years ago, which followed a $7.7 million fund in 2012 and a $2.7 million original fund.

DeVore and Andy Sack started the firm in 2008, along with partner Rudy Gadre, a former Facebook and executive. Sack stepped away from day-to-day duties several years ago, leaving the Seattle firm in the hands of DeVore, who recruited Seattle entrepreneur Aviel Ginzburg, co-founder of Simply Measured, to the team as a venture partner. Ginzburg was promoted to general partner last year. Sack and Gadre are still involved as venture partners.

Many in the Seattle tech economy have bemoaned the lack of homegrown capital available in the Pacific Northwest over the years. DeVore is one of the biggest advocates looking to change that imbalance.

“Somehow, all of a sudden, it’s ten years later,” DeVore wrote in a blog post. “We’re still doing the same thing we’ve always done, but the world has changed around us.”

In his blog post, DeVore noted the growth of Seattle as a tech hub, with Amazon, Microsoft, and a flurry of remote engineering outposts helping increase the talent pool exponentially:

“We’ve spent the last ten years honing our craft and building a community of founders, investors and mentors dedicated to our shared mission of making the Pacific Northwest the best place in the world to start a software company. Over the same period, our regional startup ecosystem has grown and changed in ways we never imagined, offering a more diverse and talented pool of potential founders than we’ve ever seen.

As with our first fund back in 2008, it looks like we’re heading into another cycle of uncertainty in the global economy. We expect markets to slow, or even contract, over the next few years. We expect the last several years’ run of easy money for startups to end along with it. Putting that all together, we know for sure that the founders we back in this next cycle will be some of the best we’ve ever seen.”

Investors in Founders’ Co-op mostly come from the Pacific Northwest and are a mix of founders and tech executives, plus family offices and foundations. The State of Oregon, via its Oregon Growth Board, invested again in the fourth fund.

DeVore also runs Techstars Seattle, which announced its 10th class in February. Ginzburg, meanwhile, leads the Alexa Accelerator, another Techstars program that Amazon helps operate in Seattle. Founders’ Co-op, Techstars Seattle, and the Alexa Accelerator are all run out of the University of Washington’s Startup Hall.

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