Seattle's Madrona Venture Group is the equivalent of Fremont Brewing Co. Photo Kurt Schlosser.
Seattle’s Madrona Venture Group is the equivalent of Fremont Brewing Co. Photo Kurt Schlosser.

Walk through the industrial section of Seattle’s Ballard neighborhood and within minutes you’ll likely stumble on an amazing craft brewery where delicious Porters or fresh India Pale Ales are poured by entrepreneurial brewmasters.

Craft breweries are everywhere, and not just Ballard. These small microbreweries are taking root across the country, delivering specialized beer to those who want something a little different than a Miller High Life or Budweiser.

A growler on a table at Stoup brewery in Seattle
A growler on a table at Stoup brewery in Seattle.

What does this have to do with startups or venture financing?

Well, leave it to venture capitalist David Beisel of NextView Ventures, who just penned a super interesting guest post on CB Insights about the parallels between a new breed of venture capitalist, known as the micro VC, and those craft breweries who are making unique micro-beer.

Beisel argues that those micro VCs who specialize in a specific type of investing (say enterprise software) or a specific geography (say Seattle) can find success alongside the higher-profile and much larger firms like NEA or Andreessen Horowitz. Most interestingly, Beisel points out where VCs don’t really want to land. He writes:

It’s not all good news, however, as there still remains one very dangerous place to be in a mature market. If you can win by being the Budweisers or Andreessen-Horowitzes of the world or you can win by being the local craft brewers or hyper-focused VCs, the danger zone thus becomes the middle.

Source. CB Insights
Source. CB Insights

Beisel’s commentary not only got me thinking of my favorite microbreweries in Seattle, but also the venture capital landscape in the Northwest.

Let’s be clear: There are no “Budweiser-sized” venture capital firms here. And that’s unlikely to change anytime soon.

But, like the craft breweries of Ballard, there are a decent number of specialists. In fact, given the dynamics of the venture capital scene in the Northwest, nearly everyone is a specialist of some kind.

Here’s my look at four Seattle area funds, and their microbrewery doppelganger.

Founder’s Co-op, which just raised a $20 million fund, is laser focused on making “the Pacific Northwest the best place on the planet to build a world-class software company.” The fund is small, but partner Chris DeVore says they can have a big impact by finding the very best entrepreneurs and doing everything in their power to make them succeed.

In beer terms, Founder’s Co-op is the equivalent of a “nanobrewery” — a fresh up-and-comer like a Populuxe, Stoup or Reuben’s Brews.

pyramid99
Inside Pyramid’s brew house in Seattle.

The biggest player in Seattle — Madrona Venture Group — also is focused geographically.

Even with a $300 million fund and an outsized impact on the region’s VC scene, it is certainly a long way off of Budweiser status. A bit older and mature, Madrona is still very much in the craft stages. It is the equivalent of a Fremont Brewing or Georgetown Brewing Co.

Bellevue-based Ignition at one time looked as if it was attempting to move toward mega-brewer status, but the firm downsized in 2013 with a $150 million fund and tightened its focus on enterprise software and infrastructure deals. The firm still invests heavily in Silicon Valley, in addition to Seattle. But given its Eastside roots, we’ll compare Ignition to Black Raven Brewing Co. in Redmond.

Maveron, the Seattle venture firm co-founded by Starbucks CEO Howard Schultz and former investment banker Dan Levitan, also has a very specific focus. While it invests nationally, the firm exclusively looks at investments in the consumer arena. Given its size and scope, Maveron is more like Pyramid.

So, there you have it. The parallels between Seattle’s VCs and Seattle’s microbrews. Let us know what you think.

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