Pioneer Square Labs has announced the launch of PSL Ventures, a Seattle-based venture capital fund that invests in early-stage technology companies. The $80 million venture fund will invest in companies across the Pacific Northwest and also will participate in financing spinouts of PSL’s affiliated startup studio.
The fund’s limited partners include a variety of charitable foundations, institutional investment firms, funds of funds, and technology industry executives and founders. The fund was oversubscribed and closed at the top end of its target range.
PSL Ventures is led by four managing directors: Greg Gottesman, former managing director of Madrona Venture Group and cofounder of Rover.com; Julie Sandler, former partner of Madrona Venture Group and former Amazon product manager; Mike Galgon, cofounder and chief strategy officer of aQuantive and longtime angel investor; and Geoff Entress, former venture partner of Voyager Capital and Madrona Venture Group and prominent angel investor in the Pacific Northwest.
“Our job and our passion is finding the very best entrepreneurs and helping make them successful with capital, talent, a wide range of resources, and every ounce of energy we have,” said Sandler, PSL Ventures managing director, in a statement. “We are thrilled to launch our inaugural venture fund here at PSL and can’t wait to start putting this capital to work supporting even more great founders.”
The new venture fund is affiliated with PSL’s existing studio, which works with local entrepreneurs to launch venture-scale technology companies. The closure of this first fund for PSL Ventures comes on the heels of a $15 million round led in January by Foundry Group in PSL Studio, which has raised $27.5 million to date from over a dozen leading U.S. venture capital funds and over 50 angel investors (including Amazon founder Jeff Bezos).
PSL Ventures will look to lead and participate in pre-seed, seed, and Series A investments in companies founded by entrepreneurs all over the Pacific Northwest. PSL Ventures does not plan to lead investments in PSL Studio spinouts, though the fund may participate in PSL’s spinout financings when led by other venture firms. PSL’s studio team of engineers, data scientists, designers, and marketers will actively support the management teams of PSL Ventures’ portfolio companies.
“Given that we are largely geography-focused, we are tech generalists that are thematically driven,” said Sandler in an email. “We get excited about categories that ‘grow well’ currently in Seattle.”
The focus will include machine learning and artificial intelligence applied to new vertical applications, she said. That’s not surprising, as the Seattle area is home to AI leaders such as Amazon, Microsoft, Allen Institute for Artificial Intelligence, and the University of Washington. Sandler also said that vocal and audible computing startups will likely be a focus, as “you cannot walk down the street here without running into an [Amazon] Alexa developer.”
Cloud and infrastructure startups will also likely be a priority, as the region is home to Amazon Web Services, Microsoft Azure, and much of the Google cloud team.
“As a side effect of this, we’re also flipping the classic venture capital model on its head,” Sandler said. “Today, most VC funds start with money, then layer on ‘value add’ services of varying levels of usefulness. We’re doing the opposite. We start with pure company-building — we’ve raised $27.5 million on the studio side of our business to support our team of engineers, data scientists, designers, marketers, product folks, and an entrepreneur-in-residence program. We have been working with founders for two years to help them launch new companies with strong early success via this studio model. Now, we are adding capital as a layer on top of that.”
She added, “We are not just investors. Yes, we are experienced VCs and founders, but 80 percent of our team are actual, current operators building new venture-scale companies. This team is available to the founders we partner with on our fund side too. It was, in fact, both local entrepreneurs and large U.S. institutional LPs who helped make the case to us that we should be the folks to build a fund like this, and that we should do it now.”
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