Bill McAleer and Enrique Godreau remind me of an old couple. They’ve been through the ups and downs together. They’ve raised three children (OK, venture funds) in the past 10 years. They even sometimes finish each other’s sentences. And together they’ve built Voyager Capital into one of the most forward-looking venture firms in town.
First, some vital stats. Voyager Capital, based in downtown Seattle, has some $370 million under management. It raised its funds in 1998, 2000, and 2007. It does primarily early-stage deals across three main tech sectors: software and services, wireless, and digital media (including e-commerce, advertising, and marketing). It has a satellite office in Menlo Park, CA, and just opened a branch in Portland, OR, last month. Earlier this month, Voyager led an $8 million Series B investment in Los Gatos, CA-based Nusym, which makes software for verifying electronic designs.
I had a chance to sit down with McAleer and Godreau last week to talk about Voyager’s strategy and how it fits in with important trends in the tech industry. They discussed some of their portfolio companies, but they also expounded on the broader theme of “connected computing” (sometimes called ubiquitous computing) and how the Seattle area is uniquely positioned as a tech-business center. They also touched on the effects of the current financial crisis on investment strategy, and how they view the broader future of venture capital.
When McAleer and Godreau co-founded Voyager Capital in Seattle back in 1997, the tech world was a different place. Microsoft still ruled in software. The Web was just taking off, and Google didn’t exist yet. Amazon.com was just two years old. McAleer had come from Seattle-based Aldus (inventor of PageMaker) with a background in multimedia, and had his own firm for three years working with early-stage companies. Godreau had come from Gartner Group and Adobe by way of Xerox PARC; he was an early backer of Seattle-based aQuantive, which had a big IPO in 2000 and was bought by Microsoft for $6 billion last year. “We thought this region would take off as a tech region,” says McAleer.
But there were a number of challenges. “When we first started, it was how to get really senior talent into the city,” says McAleer. “That’s changed a lot. But back in 1997, there were still only a couple of opportunities they could go off to if their startup failed. The cost to build is somewhat less here [than Silicon Valley], so there’s a cost advantage. The other challenge is to attract really top-notch sales and marketing talent. It’s still thin in terms of really qualified marketing people. On the plus side, with the connected computing trend, consumers are leading rather than businesses.”
I’m a technical guy by training, so I wanted to hear more about this trend, and where the Seattle area fits in. McAleer explains connected computing as the “next stage of computing”—the next step in its evolution from mainframes, desktops, and PCs to the Web, Web 2.0, and smart mobile devices. As I see it, the proliferation of smartphones, social networking, and increased connectivity is changing the way people live, and is leading to all kinds of new applications for consumers and businesses. “We’re going through another sea shift in technology,” McAleer says.
He continues, “The unique thing about Seattle is with the software, wireless, and digital media base… eventually we’ll be connecting at all times. Seattle is really well-positioned for the blend of all three… Most other tech areas don’t have the richness in anchor tenants and available talent. When we started investing, you’d see teams from one company. Now you see teams that are from a mix of companies. And around all that has grown up a capital infrastructure, supported by a strong university.”
“This geography happens to have a lot of skills,” says Godreau. “With Linux in Portland, Nintendo and Xbox designed here, network and wireless companies here, and prominent retailers like Nordstrom, Costco, Starbucks. What happens when you combine those elements? You get the computing of the future. That distinguishes us from the Valley,
