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Madrona’s Matt McIlwain

Madrona Venture Group’s Matt McIlwain doesn’t think history is repeating itself when it comes to another technology bubble, even though the market for initial public offerings continues to remain red hot and valuations are shooting up for startups. (Most recently evidenced by the $3.2 billion that Google paid for Nest).

Part of the reason for that is that McIlwain believes the technology companies of today are rooted in substance, building substantial businesses in important areas such as cloud computing, mobile, enterprise software and, as with Nest, home sensor networks.

“There is always a risk that you are going to have hype cycles, and that the sizzle is going to get out in front of the substance,” McIlwain tells KING 5 reporter Renay San Miguel. “What’s interesting about this current cycle is there’s a lot of substance to it. Now the companies that are going public have substantial revenue, substantial revenue growth, and while not always profitable right when they’re going public, they’re managing their way to profitability, so we feel more confident in the substance of this current cycle.”

In terms of areas of interest in 2014, McIlwain cited online marketplaces; big data/analytics; cloud computing; and the Internet of things. He also added that the Seattle tech scene is a bit underappreciated on a national level, but he doesn’t think that’s necessarily a bad thing.

You can watch the full 20-minute interview with McIlwain, an investor in companies such as 2nd WatchApptio, and ExtraHop, on KING 5 or below.

Read McIlwain’s previous guest post on GeekWireA cloudy 2014 for enterprises? Three trends to watch

Editor’s note: KING 5 is a media partner of GeekWire.

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