a complete package. “By the time I see a project,” Stewart says, “Janis will say, ‘There’s this great enterprise security, or a new way of tracking data on the Internet for advertisers. It works, and here are the milestones the guy has hit. And I have someone in mind to run the company.'” In recent months, OVP has backed EnerG2, an energy-storage and materials startup, and is involved with Arzeda, which designs enzymes for biotech and cleantech applications—both UW spinouts.
Madrona’s Gottesman says he and his colleagues are spending more time on campus these days, in part because their firm is involved with more startups with roots there. Madrona says it has put $50 million into 11 companies from the UW in the past decade, including Farecast (bought by Microsoft for $115 million last year), radio-frequency identification firm Impinj, cloud-computing startup Skytap, and PetraVM. “You’ll see us, if anything, step up our involvement and desire,” Gottesman says.
Other VCs say their approach is not all that different now—they’re not trying to get to know researchers and projects at an earlier stage, for instance. Bryant of Draper Fisher Jurvetson says he’s “not really” over at the UW more often these days. “I’m a great believer in the entrepreneur behind a startup,” Bryant says. “The IP/technology/idea is secondary. The scarcity lies in entrepreneurs, not technology. I don’t see high leverage in getting to know individual professors and their respective projects. I figure that entities like Tech Transfer and key on-campus figures like [computer science professor] Ed Lazowska…will get in touch with me if they identify an appropriate technology that comes with an entrepreneurial professor as a founder.”
So how will all of this positioning shake out in the coming years? Will Madrona, for example, face more competitors trying to get in deals than in the past? “The fight for UW spinouts will ultimately come through Tech Transfer,” says Voyager’s Benson. “The attention UW is getting is at an all-time high. It will be wide open within a couple of years.”
For now, though, VCs are talking more about open opportunities and collaboration, rather than any competition. “UW has not been a competitive place,” says Stewart. “It’s the opposite of Stanford, where there’s a venture guy per day. More attention around UW is good for the whole region. It still takes work. It takes the type of firm and venture partner who will roll up their sleeves. It’s not a mass market opportunity…All the [VC] firms here could do spinouts. But the reality is, it won’t get overly competitive.”
Gottesman agrees, “There will be plenty of opportunities for us and other VCs to spin out companies…There’s more than enough to go around for a lot of folks.” But it’s clear that a firm like Madrona, with its extensive track record at the UW, will continue to press its advantage in terms of the relationships it has built on campus over the years. “We’ll do more than our fair share of startups,” Gottesman says.
[Stay tuned for Part 2, where we’ll hear from Linden Rhoads of UW Tech Transfer, and more VC thoughts on specific areas of interest—Eds.]
