Matt McIlwain and Greg Gottesman are leading the charge at Madrona

At a time when many are proclaiming the death of the traditional venture capital firm, Madrona Venture Group seems to be hitting its stride. The Seattle firm, originally founded 17 years ago as a loose network of prominent angel investors, raised a $300 million fund in June. That marked the largest in Madrona’s history, and came in well beyond its $250 million goal.

Greg Gottesman

That’s good news for Seattle area startups, since money still matters even at a time when it’s becoming cheaper to start technology companies.

Led by the firm’s next-generation leaders Greg Gottesman and Matt McIlwain, Madrona is flying the flag for Northwest startups in a big way. And it’s not just by writing checks.

Gottesman is actively involved TechStars and Startup Weekend, helping some of the earliest-stage startups get off the ground. (Heck, Gottesman even had time to launch a new company on his own, the online pet sitter marketplace Rover.com). McIlwain combs the halls of the University of Washington, seeking top technical talent and supporting the state’s top research university.

“We are not trying to build the best companies in the Pacific Northwest,” McIlwain told GeekWire earlier this year. “We are trying to build the best companies in the tech ecosystem that happen to be based in the Pacific Northwest, and that’s been our strategy really since the founding of Madrona.”

Madrona’s strategy appears to be working. It not only bankrolled one of the region’s biggest success stories in recent years in Isilon Systems, but it doubled down on the company when it looked like it was going to go out of business. (Isilon sold to EMC for $2.25 billion in November 2010).

We’ll recognize the Newsmakers of the Year at the GeekWire Gala, Dec. 6 at McCaw Hall in Seattle. Details and Tickets Here.

Now, it is funneling money to some of the Isilon alumni, participating earlier this month in the $24.5 million funding round for stealthy data storage startup Qumulo. Madrona also is a backer of Apptio, one of the most promising enterprise software startups in Seattle with a value of $600 million. (Apptio’s Sunny Gupta also is a GeekWire Newmsaker). Other notable investments include Buuteeq, Redfin, Z2Live and Appature.

Most impressively, one of the damning critics of the current state of venture capital, The Kauffman Foundation, is an investor in Madrona’s $300 million fund.

It is hard to single out individuals at a partnership, but Gottesman and McIlwain are ushering in a new era at Seattle’s best known VC firm. For that, we’ve chosen both of them as 2012 GeekWire Newsmakers of the Year.

We’ll be spotlighting all of our 2012 Newsmakers on GeekWire, leading up to the GeekWire Gala on Dec. 6 at McCaw Hall in Seattle. Many of the newsmakers from the list, including Gottesman and McIlwain, will be joining us and the rest of the tech community on that night to mark a remarkable year of news. Details and tickets here for the big night.

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