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Madrona Venture Labs, a sort of pre-seed startup incubator based in Seattle, Washington that bills itself as “an enterprise AI startup studio…for the founders, by the foundershas secured $11 million for its fifth fund, with the goal of empowering the next generation of AI founders.
The funding round was led by sister company, the Seattle-based powerhouse giant Madrona Venturaand featured a group of noteworthy technology executives committed to the success of early-stage enterprise AI founders.
Notable new MVL investors include: Thomas Dohmke, CEO of GitHub; Joe Beda, co-founder and former CTO of Heptio; Brent Frei, co-founder of Smartsheet and CEO of TerraClear; and Michael Hilton, former CPO of Accolade and co-founder of Concur, among others. The fund has also seen the return of previous investors such as Elissa Fink, former CMO of Tableau; Spencer Rascoff, co-founder and former CEO of Zillow; and Mike McSherry, co-founder and CEO of Xealth.
A unique approach focused on risk reduction
Madrona’s unique approach involves investors in its funds actively participating as co-builders and partners. This strategy allows founders within the Madrona network to benefit from partnerships with world-class practitioners, who serve as valuable advisors, direct investors and co-founding board members. Engaging with successful industry figures not only provides financial support, but also brings in-depth expertise and guidance.
According to Mike Fridgen, chief executive officer of MVL, the venture capital firm is actively looking for new founders and plans to back about 12 companies with their new fund over the next few years.
In an interview with VentureBeat, Fridgen outlined MVL’s commitment to pre-seed phase founders: “All we do is help founders de-risk and accelerate and move to the next level.”
The company also welcomed two new AI and technology partners, Larry Colagiovanni and Jay Bartot, who bring extensive experience in technology, product leadership and founding AI startups. Larry Colagiovanni, former CTO and CPO of Limeade, and Jay Bartot, former CEO of MVL spinout Zeitworks, will contribute to Madrona’s history of building data-driven AI startups by offering their expertise in building teams and executing the technical vision.
Looking for founders
Madrona Venture Labs actively seeks founders with product and engineering backgrounds, emphasizing deep domain knowledge, experience, passion for problem solving, and unwavering determination. The firm is committed to promoting diversity and assists founders in prioritizing diversity as they establish their initial teams.
Fridgen emphasized Madrona’s role as a foundation and partner of the founders, providing access to their impressive network of over 150 portfolio companies and successful investors, such as Dohmke and Frei, who bring experience and success in specific areas.
Regarding MVL’s past results, Fridgen said, “We’ve created over 30 companies since 2015. And those companies have gone on to raise more than $260 million and hold a combined value of $629 million.”
He discussed the evolution of MVL’s work with the founders, from big data and intelligent applications to now-critical models and generative AI, with the goal of unlocking new capabilities for the benefit of consumers.
Fridgen pointed to specific examples of companies backed by MVL, such as Xembly, an automated chief of staff for knowledge workers who debuted last year, and Upper levelfocused on people-centric engineering intelligence, such as the kind of bets that MVL will look to replicate success with its new round.
Explaining how MVL works to identify investable founders, Fridgen said, “Sometimes it’s an idea that we’re working on internally, and we’re talking to people who have a great founder idea, and sometimes all the stars align and they come in.” in the company as a founder Sometimes the founder brings us the idea.
“Fiery” founders.
Either way, Fridgen said, MVL is looking for “strong ideas from the founder” and “true insight into a client’s problems and a real solution.” The firm is location agnostic and seeks founders from its headquarters in Seattle, the Bay Area and throughout the United States
The main questions an MVL-backed founder should seek to answer when pursuing endorsement are: “There is a problem here that we now see uniquely and we have a key and an approach that is differentiated and builds a real moat over time ? Is there anything protectable here that we can own and truly be the best in the world? That journey is never a straight line and it takes real commitment (from the founders) to get to the truth.
That’s why MVL ultimately selects founders who have grit and determination, “fire” as Fridgen also puts it.
Looking to the future, MVL plans to build on its core theme of intelligent applications while embracing the generative AI movement. Recent additions to its portfolio include Charmed, an AI-assisted game development company; Augmend, focused on collective intelligence for developers; Storia, specializing in AI-powered video production; and Finpilot, an AI co-pilot for finance.
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