Pioneer Square Labs Raises $12.5 Million from 13 Venture Firms and over 50 Angels

Pioneer Square Labs ("PSL"), a new startup studio, today announced that it has raised $12.5 million from 13 venture capital firms and over 50 angel investors to create and launch startups. Venture capitalist and Rover.com founder Greg Gottesman, super angel Geoff Entress, aQuantive co-founder Mike Galgon and Madrona Venture Labs co-founder Ben Gilbert founded the company and are joined by an experienced team of developers and designers.

PSL is a studio that creates its own startups. It is not a venture fund, incubator or accelerator. PSL expects to test hundreds of ideas, gathered from multiple sources, and then use its own team to launch companies around the best ones. During the company-creation process, PSL builds product, signs key customers, and actively recruits talented entrepreneurs, technologists and designers to serve as founders of a spin-out team. PSL also engages its large venture capital and angel investor base to provide initial funding for these spin-outs.

"Everything for us is about finding those great entrepreneurs, pairing them with an idea that has traction, and setting them up for success in every possible way," said Gottesman, who over 18 years helped to build Madrona Venture Group into a leading venture firm as one of its initial Managing Directors. "We are looking for uncommon talent, those slightly crazy individuals who against better judgment believe now is the time to leave that cushy, secure job to build the next great Seattle company. We take a bunch of risk off the table to give that person the best shot."

Top Venture Firms and Angel Investors

Foundry Group led the financing round, with participation from 12 other venture firms in Seattle, Silicon Valley and across the country. In addition to Foundry Group, other venture investors include Bezos Expeditions, Greycroft Partners, Madrona Venture Group, Maveron, Menlo Ventures, MHS Capital, Sinclair Digital Ventures, Techstars Ventures, Trilogy Equity Partners, True Ventures, Voyager Capital, and Vulcan Capital.

"I have never seen this number of VCs and angels backing something like this," said Foundry Group’s Brad Feld, who will join PSL's board as part of the financing. "It's unique to Seattle and says a lot about the quality of the team and what they're building."

Participating angels include many of the most active investors in the Seattle area and Silicon Valley, as well as well-known technology CEOs and founders. They include Rich Barton (founder of Zillow and Expedia), Bob Nelsen (Managing Director of Arch Venture Partners), Scott Dorsey (founder and CEO of ExactTarget), Ryan Holmes (founder and CEO of Hootsuite), Rudy Gadre (former Facebook general counsel) and serial entrepreneurs Bill Lee and Jonathan Sposato. Entress, Galgon and Gottesman also contributed significantly to the round.

"A key part of our strategy was assembling a large syndicate of great investors," said Entress, who has invested in more than 150 companies in the Pacific Northwest, including Big Fish Games, Elemental Technologies, Hootsuite, and Isilon Systems. "These investors funded us primarily for the opportunity to invest in our companies. That’s great news for our spin-out CEOs.”

Focus on Software and Services Companies

PSL builds software applications and services, focusing on businesses that can demonstrate customer traction within a short amount of time. These businesses most often will have money changing hands and generally fall into two categories: consumer services and lightweight business applications. The PSL founders were involved in the creation of aQuantive, Rover.com, and Spare5, and the earliest stages of helping to build buuteeq and Redfin, all of which would fit into these categories.

A Talented Team

The PSL team includes three former startup CTOs and technology executives: Aria Haghighi (formerly of Apple and Prismatic), Ryan Kosai (formerly of ExtraHop Networks and Athleon), and Marcelo Calbucci (formerly of EveryMove and Seattle 2.0). Gottesman and Entress worked together for almost a decade at Madrona, and Gottesman and Gilbert successfully helped launch Madrona Venture Labs, an in-house startup studio. Entress, Galgon and Gottesman have worked together on various companies for almost two decades.

"Our team loves the early-stage. That’s what we’re really good at," said Galgon. "Our job is to take an idea through early traction and then hand it off to a world-class CEO who doesn’t have the capital or idea to start his or her own thing, but is ready to lead a company to greatness."

Gottesman now serves as a Venture Partner of Madrona. Entress will continue to serve as a Venture Partner at Voyager.

Seattle: A Perfect Home

Seattle is home to some of the largest technology companies in the world, including Amazon and Microsoft. These companies have spent the last several decades attracting top technology talent to the Seattle area. Seattle also boasts entrepreneurial success stories like Boeing, Costco, Nordstrom and Starbucks.

“I can’t imagine a better place in the world to do this,” said Gilbert. “Seattle is bursting with talented entrepreneurs, many of whom are looking for that next great idea. If we do our job well, together with these entrepreneurs, we can build some incredible companies.”

PSL is housed at Galvanize (http://www.galvanize.com/campuses/seattle-pioneer-square/) in the Pioneer Square neighborhood of Seattle.

About Pioneer Square Labs

Pioneer Square Labs is a Seattle-based studio that creates and launches technology startups. For more information, visit www.pioneersquarelabs.com.

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