- Seattle has a growing entrepreneurial ecosystem supported by large tech companies like Microsoft and Amazon investing heavily in R&D. The city government is also committed to making Seattle an entrepreneurial hub. - While the venture capital community was small in the 1970s-1990s, it has expanded significantly since 2000. Seattle saw record VC funding in 2014 and has strengths in biotech, software, and enterprise software. - Seattle continues to attract talent and sees growing jobs in areas like healthcare, retail, manufacturing, and professional services, outpacing national income and population growth. The large companies also drive knowledge spillovers that support startups.

1. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
1
AfterattendingGeekWire’sStartup DayFriday,Icame away more energetic about the Seattle startup ecosystem than I
had beenjusta fewshortweeksago. The Mayor’s openingspeechshowedthe city’scommitmenttothe entrepreneurial
community. Giventhe momentumof the event, I wanted to share my view on Seattle and the community I have seen.
In May of 2013, I embarked on a westward trip for my MBA internship at Amazon in Seattle, WA. Not only was I
interestedinlearningexecutionfromone of the best operations companies in the world, but I also wanted to be in an
ecosystemthatI believedwouldhave agreat entrepreneurial community in conjunction with satisfying my hunger for
the great outdoors. The summer in Seattle was enough to wet my appetite about coming back full-time in 2014.
Through2013-14, whenI had discussionsaboutfull-timeinSeattle, most people mentioned rain and dreariness. In my
pursuit to fully understand the area, I kept doing my research before moving here full time this spring. I quickly
recognized that the region is home to many of the Fortune 500 Companies, Wall St. Darlings, fast growing top tech
companies, biotech, and a culture of exploration.
As I am still new to Seattle, and continue to learn and meet people here, I am more impressed by what I see, what I
read,and the people Imeet throughout the Seattle area. While Seattle may never be The Bay area, I think Seattle will
continue to rapidly expand the entrepreneurial and venture hub faster than many ecosystems. The region is home to
several large public companies who are heavily investing in tech and R&D, regional talent that is spurring a positive
feedback cycle of growth and investment across various sectors, which inevitably will create unique knowledge
spillovers, and the startup culture amongst this unique community is accelerating at a faster rate.
History
Seattle hascontinuedtoprove itself tobe agrowthand innovation
hub over the past 3 decades. Seattle is now home to many large
tech and public companies, the venture community and tech
community did not develop overnight. Currently, Seattle public
companies represent $793B of enterprise value, TTMRevenue of
$342.9B, and 4 are Fortune 500 businesses. Forbes recently
published the top Tech Visionaries with Microsoft and Amazon
CEO’s in the top 10, and backing it up is the large investment in
R&D with Amazon and Microsoft cumulatively spending nearly
$20B in R&D in the last year. While Seattle dominates the retail
sector as home to the large public companies of Amazon.com,
Costco,Nordstrom,Starbucks, Zulily,andZumiez,itisalsohome to
many other large private retailers and brands such as REI, Brooks,
and Outdoor Research. Many of these businesses are leaders in
their industry, and are well known for their “stealth tech”
investments, or rather proprietary technology that enables them
to be better than their competition. For example, Starbucks
recently brought on Kevin Johnson as COO (former Juniper
Networks CEO). Additionally, the company is leading the market in mobile payments with 16% of all in-store
transactions. Other companies, like Seattle Genetics, driving technological advances to cure cancer. Overall, it is
interestingtosee the global impactof publicSeattle companies.The view issharedbyanalyzing Seattle’s publicequities
outperformance of the S&P500 in 2014 of 14.5%1
to 10.2%, despite Amazon being down 21.1% in 2014.
While this list includes companies headquartered in the Seattle Region, it does not include the companies that have
large development offices in the area such as Google, Cisco, Disney, Facebook, SpaceX, Boeing, HP, BlueBox, EMC,
1 2014 market-capitalization weighted return of Seattle public equities
Top 20 - Seattle Public Equity Performance
Name 2014 - YoY CAGR
Nautilus Group 78.5% 52.7%
Cray 24.9% 37.3%
Alaska Air Group 65.9% 33.0%
Expedia 24.9% 27.7%
First Financial Northwest 13.8% 25.0%
Timberland Bancorp 8.3% 24.7%
Banner -2.5% 21.7%
Starbucks 4.1% 20.3%
Seattle Genetics -19.8% 16.0%
Costco Wholesale 20.8% 14.5%
Weyerhaeuser 15.9% 14.0%
Nordstrom 27.3% 13.2%
Barrett Business Services -69.7% 12.1%
Pope Resources -2.2% 11.8%
RealNetworks -7.7% 11.3%
Clearwater Paper 30.2% 11.2%
Amazon.com -21.1% 11.2%
Microsoft 26.1% 11.0%
Riverview Bancorp 52.6% 10.6%
Esterline Technologies 9.8% 10.1%
Source: FinDynamics, S&P500, Company Financials

2. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
2
Palantir, andthisisby no meansexhaustive.Also,this listof publiccompanies doesnoteveninclude the IPOs out of the
Seattle marketin2014, namelyJuno Therapeutics, Acucela, Alder Biopharmaceuticals, Trupanion, Immune Design nor
the rumored IPOs of Apptio, Avalara, DocuSign, INRIX in 2015. Seattle is ranked 15 on Inc. Magazine’s 5000 Fastest
Growers with 92, and 107 in Washington. These companies have $2.0B in revenue and have trailing 3 Year growth rate
of 41.2% in keysectorsof consumerproducts/food&beverage,Software/IT, enterprise solutions, and health/medical.
Lastly,Seattle ishome to several universities, most interestingly is the University of Washington which as of 2012 was
rankedfourthinresearchinstitutionsspending$1.1Bin 2012 betweenscience andengineering.The UW isalsoownerto
1,867 patents, which is 16th out of universities and colleges. Also, the university is investing heavily in
entrepreneurship. In my first month, I was fortunate to meet a faculty member at Arthur W. Buerk Center for
Entrepreneurshipand hearsome of the plansto continue todevelopentrepreneurs atthe University.Thishasalso been
shown by the schools accelerator called UW Center for Commercialization New Ventures Facility, which also won an
award by the 2014 University Business Incubators Global Index.
Growth in Jobs - The Good Kind
Seattle hasbeenaddingasubstantial amountof jobs since the
2008 recession. Total employment has added 123K jobs from
2009-13. The jobs added were in healthcare - 30.7%, retail -
12.8%, manufacturing– 12.7%, andprofessional,scientific,and
technical services –11.9%. Additionally, income per capita has
increased 14.3% between 2009- 2013, or 2.7% per year
outpacing U.S. income per capita of 2.5%. Additionally, the
population increased at 1.1% CAGR compared to the U.S. of
0.7% leading to a cumulative income growth of 20.9% vs. U.S.
17.2% from 2009-13. Additional 3rd
party research on
WalletHub suggests that Seattle has a cluster of STEM jobs2
and is rated 6th
overall in addition to being 6th
most educated
cityin the country3
,and LinkedInpoints out the top industries
that Seattle is clustered in and defining the city:
cloud/distributed computing, game development, algorithm
design and more. While much of the talent may currently be
tied up in the large public firms, over time the continued
knowledge spillover effects and idea generation will spur
greater rounds of innovation.
The Right Mix of Community
Since I arrivedinSeattle in2014, I have beenimpressedalsobythe people.WhilesometimesIhearpeople talkingabout
the “Seattle Freeze”, I actually have seen quite the opposite. People here seem to be some of the most friendly,
collaborative, and intelligent people I have had the pleasure to meet.
One of the thingsthatI have noticedsince movingtoSeattle isthe “Meetup”groups thathave beenestablished to grow
the entrepreneurial community.Some are betterthanothers, butmypersonal favoriteshave been StartupGrindSeattle
and NewTechSeattle –bothof whichhave beenextremelyinclusive,collaborative, and energetic. The people I meet at
these events always share a common passion of entrepreneurship, technology, and Seattle. Regardless of your
personally or skillset, anyone in Seattle can find a Meetup for a sector he or she is interested in, or a group of people
2 http://wallethub.com/edu/best-worst-metro-areas-for-stem-professionals/9200/
3 http://wallethub.com/edu/most-and-least-educated-cities/6656/
Jobs DefiningSeattle - ResearchPerformedbyLinkedIn
Source: Defining A City By Its Professional Skill Set with Data From LinkedIn

3. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
3
that are at leastinterestedinthe same passions,which in my opinion helps to boost the collaboration and networking
necessary to build a strong ecosystem.
Anotherkeypoint to make is the city government wants the city to be defined as an entrepreneurial destination. The
city of Seattle has
State of the Growth Sectors and Capital
The first venture firm found in 1977, Cable & Howse
Ventures and even by the 1990’s, only 3 existed: Cable &
Howse,OVPVenture Partners and The Phoenix Partners.
Until then, entrepreneurs had to fundraise on Sand Hill
Road in the Bay Area4
. However, given the favorable
economic climate for businesses in Washington, and the
Seattle Area,continued growth and investment into tech
has not stopped. The growth in tech from the large
companiesinthe area continues to pump capital into the
economy, and is spurring a new cycle of startups. But
since then, the VC community has expanded
tremendously, and even though the oldest firm OVP
Venture Partners closed in 2012, other firms have been
investing heavily. Since 2000, the landscape has shifted
slightlyasthe lengthbetweenroundshasincreasedonlyslightlywhilethe average roundsize has declined from $20.4M
in 2000 to $6.7M in 2014. A large driver of this was the increase in seed deals from 18 in 2008 to 70 in 2014.
Seattle hada record yearfor private capital fundingin 20145
. During the year 235 venture firms and angels participated
in264 roundswith222 companiesraising$1.8B in venture,seed,convertible rounds, growthequity, and crowdfunding,
whichas a 45.3% increase over2013. Seattle’sVenture Capital sectorbeatNew YorkCity’s VC per capita by nearly eight
foldat $2,500 perperson;also,NewYork City deals numbered 906 compared to Seattle’s 260. In order to continue this
performance, the positive feedback cycle of investment in tech and talent must continue. Fortunately, talent has
continuedto flowintothe city, so a need of additional growth capital will be needed in the years to come despite the
number of investors, including venture, private equity and angels now totals 123.
Seattle has been heavily invested in Biotech and IT/Software.
During 2014, the top 3 sectors for investment rounds were
Biotech, software and enterprise software. The top 10 sectors
raised a cumulative $1.2B in 2014. The largest included Juno
Therapeutics (now public), Adaptive Biotechnologies, INRIX,
Bensussen Deutsch, and VentiRx Pharmaceuticals totaling
$435M infundraising. Also,70 businesses raised $64Min seed
or angel rounds, down from $68M in 2013. Some of the most
notable industries were in software + enterprise (33 rounds;
$242M), analytics(0rounds; $135M), mobile (8 rounds; $14M),
and finance (5 rounds; $88M). Another industry to watch in
Seattle is Cloud/Infrastructure, which raised $115M in 12
rounds.Since 2008, 10 companieshave raised$13M infunding,
4 Cook, John. “A History of Seattle Venture Capital.”2006 Jan 11.SeattlePi. [online]
http://blog.seattlepi.com/venture/2006/01/11/a-history-of-seattle-venture-capital/
5 Data and analysisfrom Crunchbase- Data Export - All Companies with Recorded Fundraising YTD Dec. 2014
Sector Numberof Rounds Sectors AmountRaised
Biotechnology 30 Biotechnology 435,808,205$
Software 29 EnterpriseSoftware 168,409,968$
EnterpriseSoftware 14 Analytics 134,810,018$
Analytics 10 Finance 88,300,000$
Mobile 8 SportingGoods 77,500,000$
SocialMedia 7 Software 73,839,218$
E-Commerce 6 RealEstate 71,000,000$
HealthCare 6 HealthCare 46,195,016$
CuratedWeb 6 CleanTechnology 42,366,199$
CleanTechnology 6 Networking 41,000,000$
Source:Crunchbase-Data Export-All Companies with Recorded Fundraising.Dec.2014
Top10SectorsbyRoundandbyAmountRaised
Total Amount of Capital Raised by Companies
Amount Raised
Funding Round Type 2013 2014
venture 1,036,840,855$ 1,553,288,254$
private_equity 141,524,356$ 186,300,000$
seed 61,956,748$ 67,782,346$
angel 9,428,742$ 3,579,000$
convertible_note 1,600,000$ 4,635,000$
product_crowdfunding 2,901,454$
undisclosed 1,266,000$ 1,106,118$
equity_crowdfunding 20,000$
Grand Total 1,252,616,701$ 1,819,612,172$
Funding Year
Source: Crunchbase - Data Export - All Companies with Recorded Fundraising.
Dec. 2014

4. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
4
and the cityis well onits’wayof establishingitself asa cloudcentral city. Core to thisvision are companies like Amazon
WebServices,HP,MicrosoftAzure,andGoogle are workingoncloudinfrastructure anddistributedcomputing. Quentin
Hardy’spiece inthe NY Timessaiditperfectly, “Seattle hasquicklybecome the centerof the mostintensiveengineering
incloudcomputing:the designandmanagementof global-scaledatacenters.6
”Here iswhere we see companies scaling
to build off of the cloud – Tableau, Concur, Chef, Apptio, Socrata. University of Washington Distributed computing -
cloud, big data, analytics, and mobile.
One thing to note after all the discussion of capital raised is capital returned. While the region may not have had a
WhatsApp, Nest, or Oculus Rift, yet, the region has, and does, return a fair amount of capital to investors. Since 2000,
Seattle RegionIPOshave raised$5.9B, with the largest industries that benefited being: Retail Communication ($1.6B),
IT/Internet Related ($1.2B), Biotech ($0.9B). Additionally, while difficult to gather the total amount, Crunchbase data
shows$4.6B returnof capital for venture firms via acquisitions since 2000. Given the fundraising and focus on cloud in
the area, one can onlysee itisa matterof time before ahome run happens. Witnessing SAP’s acquisition of Concur for
$8.3B in 2015 is a strong sense of the deals that could happen in Seattle.
Venture Firms
Seattle has an active internal community of investors. Primarily
the largest firms since the closing of OVP and Frazier are
Madrona, Maveron,and Ignition. Madrona’scurrentlyonits fifth
fundof $300M in2013. Previousexitsinclude Amazon,buuteeq,
appature, and PayScale. Its’ current portfolio consists of
companies like Apptio, Dato (formerly Graphlab), ExtraHop,
Impinj, Julep and REDFIN.
Maveronis a consumer-only focused venture firm and raised its
fourth fund of $240Min 2013 with a strategy of investing in one
seed stage business of $100K-$200K per month. Ignition raised
its fifth fund of $150M in 2013 as well. Maveron’s exits have
includedeBay,Capella,Potbelly,Groupon,Zulily, Trupanion, and
Shutterfly. The firm’s current portfolio include companies like
August, General Assembly, Julep, and Peach.
The rest of Seattle’scompaniesraise capital throughacceleratorsandangels, such as Chris Devore, Geoff Entress, Rudy
Gadre, AndyLiu, Gary Rubens7
,AndySack, andFounder’sCo-op,Alliance of Angels,TechStars, and the new Startup Hall
inthe UniversityDistrict.The accelerator/incubatorshave beenquickly expanding to provide much needed capital for
the seedstage gap to venture.Leadersof TechStars Seattle have started Founder’s Co-op, which has raised its 3rd
fund
of $10M.
Alliance of Angelsinvestsacross consumer,IT/Hardware,andbiotech/lifesciences.The Alliance recentlyraised another
$5.3M this year. Previous exits include SNAPin Software and Daptive while it has a large active current portfolio with
companies like Apptentive, Airbiquity, DocuSign, and Julep.
TechStars Seattle continues to build a strong portfolio as well. Since 2010, 51 companies that have gone through the
program and have raised $91M, six have failed, seven have been acquired, and the remaining are still active. The
6
http://bits.blogs.nytimes.com/2014/06/11/seattle-the-new-center-of-a-tech-boom/
7
http://www.geekwire.com/2014/gary-rubens-qa/
Top 10 Investing Firms by Number of Rounds
Investing Firm 2013 2014
Madrona Venture Group 16 16
Alliance of Angels 17 10
9Mile Labs 7 9
Fledge 7 5
Rudy Gadre 7 4
Founder's Co-op 6 4
Maveron 4 5
Techstars 8 1
Ignition Partners 3 5
Andreessen Horowitz 5 3
Top 10 Rounds 80 62
Number of Rounds by Year
Source: Crunchbase - Data Export - All Companies with Recorded Fundraising. Dec.
2014

5. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
5
location currently has 108 mentors many of them are repeat entrepreneurs, C-Level executives, and Seattle Tech
Leaders.
While this is just a snapshot of the firms and community in Seattle, it gives a good picture of the prominence and
continuedgrowth,mentorshipandleadershipof the tech/entrepreneurshipscene, and a view down the road of what’s
to come next.
What I Expect to See in the Future
Seattle’s strong angel system will continue to help to boost seed
roundsinthe area. Non-Seattle investors came in for a significant
amount of rounds, but were concentrated in a few specific
sectors.The large funds do recognize the opportunities and value
inSeattle. A few greatexampleshave happenedjustrecentlywith
Distelli,ITdeploymentmanagement, closing a round of $2.8Mled
by Andreesen Horowitz, and Tune raising a $27M Series B from
Accel, Icon, and Performance Equity Management. Additionally,
the Angels are off to a good start too with the Alliance of Angels
raised another fund for $5.3M. Personally, I think Seattle’s
VCs/Angels will get Seed Stage to Series B rounds, and the large
fundswith dry powder will likely wait to enter until later rounds.
Particularlywiththe large firmsprovidingmuchneededcapital for
the companies raising C-D rounds to bridge until IPO or
acquisition.
Seattle is continues to establish the base of talent necessary to be successful, and I believe has the right culture to
develop these companies. Furthermore, as the center of cloud computing grows, it will continue to attract big data
analyticscompanies,andmobile /pervasivecomputing device companies, the core of future computing. Additionally,
the continued strength in biotechnology will also drive growth in the venture/entrepreneurial community. The next
logical stepisa continuationof cross-collaborationbetweenindustries.All industriescanandwill benefitfrom the cloud
/ mobilityrevolution,andSeattlehasuniquelypositioneditself as the hub of innovation in that space. I look forward to
continue toparticipate inthe Seattle Ecosystemand meet entrepreneurs making a difference and building businesses
every day.
Top 10 Seattle Sectors Non-Seattle Firms Invested In
company_market Number of Rounds
Software 34
Enterprise Software 25
PaaS 20
Biotechnology 14
Mobile 14
Analytics 14
Finance 12
Payments 10
E-Commerce 8
Home Renovation 8
Source: Crunchbase - Data Export - All Companies with
Recorded Fundraising. Dec. 2014

6. SeaTech: My Impression of the Seattle’s Entrepreneurial Ecosystem
6
Sources:
http://blog.pitchbook.com/vc-by-region-in-2014-bay-area-nyc-pnw-europe/
http://info.crunchbase.com/about/crunchbase-data-exports/
https://www.cbinsights.com/
http://mattermark.com/
http://online.wsj.com/home-page
http://www.wsj.com/news/technology
http://venture-capital.alltop.com/
http://venturebeat.com/
www.meetup.com
http://www.geekwire.com/
http://www.xconomy.com/
http://www.inc.com/inc5000/list/2014
http://fortune.com/fortune500/
http://www.pwcmoneytree.com/
http://www.geekwire.com/2012/ovp-venture-partners-close-shop-30-years/
http://www.geekwire.com/2015/seattle-no-6-overall-best-metro-areas-stem-jobs/
http://www.geekwire.com/2015/big-apple-vs-rain-city-graphical-look-vc-investing-nyc-seattle/
http://www.geekwire.com/2014/charts-show-exactly-whats-wrong-seattles-startup-scene-whats-right/
http://www.geekwire.com/2013/seattle-vcs-sound-problem-money-entrepreneurs/
http://infographiclist.files.wordpress.com/2011/10/designcommission_4e60fa990541d.png
http://www.geekwire.com/2015/impressions-seattle-mba-trekker/
http://bits.blogs.nytimes.com/2014/06/11/seattle-the-new-center-of-a-tech-boom/
http://blog.linkedin.com/2014/10/22/defining-a-city-by-its-professional-skill-set-with-data-from-linkedin/
http://www.inc.com/christine-lagorio/biggest-startup-acquisitions-of-2014.html
Zephyr Database
Crunchbase – December 2014 Data