Madrona Venture Group’s Tom Alberg describes 1995 as “a watershed year” for the tech world.
At the time, Seattle didn’t have a strong tech-focused investment community. That led Alberg and three other co-founders in 1995 to launch Madrona — a venture capital firm focused on companies in the Pacific Northwest. Alberg says they felt strongly that Seattle needed to have more early-stage capital available to fuel its then-fledgling tech economy.
“That’s really the year the internet took off,” adds Alberg, managing director of Madrona. “Netscape went public, with its IPO in the fall of 1995. Amazon was launched as a site and began selling books on the internet in July of 1995.
“And it was really the year that I say [Microsoft’s] Bill Gates discovered the internet — and wrote the fairly famous email to everybody at Microsoft saying the company had to adapt its business to the internet because it’s going to be a big deal. I mean, the tech economy was really just getting rolling and our goal was to establish a significant, long-term fund that could help provide capital.”
Prior to co-founding Madrona Venture Group, Alberg was a partner at Perkins Coie, one of the largest law firms in the Pacific Northwest. He later served as executive vice president of McCaw Cellular Communications and president of LIN Broadcasting Corp. — both eventually sold to telecom giant AT&T Corp.
To date, Madrona has raised about $1.8 billion across seven funds. Its investment partners include major institutional investors such as BlackRock, the Kauffman Foundation, American Family Mutual Insurance and the University of Washington endowment.
“We’ve made like 250 investments over time,” Alberg says. “I think we’ve had at least 25 IPOs [including Redfin, Smartsheet, Impinj and Apptio in recent years] and probably 50 or more sales of companies for a profit.
“And then you have a bunch of sales where you maybe get your money back and some, probably 20% to 25%, where you lose money because you can’t, no matter how hard you try, always predict who is going to be the most successful and who’s going to fail.”
Technology news website The Information recently listed Madrona as one of the top seed investors in the nation because of its “strong track record of investments reaching IPO.”
Alberg has deep roots in Seattle and a passion for ensuring a better future for the city. He serves on numerous boards in the area, including the Pacific Science Center, Challenge Seattle and TechNet Northwest.
Alberg was one of the original investors in Amazon and only recently stepped down from the e-commerce giant’s board after serving for more than two decades as a director. In addition, he was a member of President Obama’s National Advisory Council on Innovation & Entrepreneurship.
Alberg also has invested in his passions outside of work, co-founding with his wife, Judi Beck, the Oxbow Farm and Conservation Center in Carnation (east of Redmond) as well as co-founding Novelty Hill-Januik winery in Woodinville. He and his wife have five children and four grandchildren, “and you know, they are very important in our lives,” Alberg stresses. “Very important.”
Retirement is not on the horizon for Alberg, who will turn 80 in mid-February, but he is spending less time on investing and more on community-focused efforts to address the big issues affecting the Seattle area — such as the homelessness problem, transportation and education. He’s also penning a book about technology and cities, focused on the Pacific Northwest.
“There’s both an interesting history of technology in the Pacific Northwest and also the issue of cities and tech companies working together,” he says. “What’s the potential for solving some of the bigger problems?
“I’m really promoting the whole idea that government needs to be more willing to work with the tech community and not treat them like the enemy,” Alberg adds. “At the same time, tech companies need to do more. I think we need to be much more solutions-driven.”
A video of Tom Alberg's acceptance speech for the Lifetime Achievement Award can be found at this link.