According to GeekWire, Seattle venture firm Founders’ Co-op has raised $50 million for its sixth fund, matching the size of its previous 2021 fund. The firm, founded in 2008 and known for early investments in billion-dollar companies like Remitly, Outreach, and Auth0, will deploy 80-90% of capital to Pacific Northwest founders at pre-product or pre-revenue stages. The fund targets approximately 30 companies with initial checks ranging from $1 million to $1.5 million, aiming for 10% ownership at first investment. Managing partner Chris DeVore emphasized that the firm’s strategy remains focused on being “the best first-check investor” in the region rather than competing with larger later-stage funds. This disciplined approach to regional early-stage investing offers important lessons about venture capital specialization.
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The Strategic Power of Geographic Concentration
Founders’ Co-op’s consistent focus on the Pacific Northwest represents a sophisticated counter-trend in venture capital. While many firms have expanded geographically in pursuit of deal flow, this firm demonstrates the advantages of deep regional expertise. The concentration allows for unparalleled network effects – the team can leverage local relationships, understand regional market dynamics, and provide hands-on support that would be impossible across multiple time zones. This approach creates a compounding advantage: successful founders become advocates, talent clusters develop, and deal flow becomes increasingly proprietary. The firm’s location within Foundations, described as a “love-letter to the local founder community,” further amplifies these network effects by creating physical proximity to the region’s most promising entrepreneurs.
The First-Check Philosophy as Competitive Advantage
Chris DeVore’s statement that “your fund size is your strategy” reveals a sophisticated understanding of venture economics. By maintaining a $50 million fund size rather than pursuing growth, Founders’ Co-op avoids the portfolio construction problems that plague many expanding venture firms. Smaller funds don’t need billion-dollar outcomes to generate strong returns – they can achieve top-quartile performance with more modest exits. This allows them to focus on earlier, riskier investments where their regional expertise provides maximum advantage. The firm’s explicit positioning as a “first-check investor” that doesn’t compete with later-stage funds creates alignment with both founders and subsequent investors, eliminating the signaling risk that often plagues early-stage deals.
Pacific Northwest’s Technical Talent Advantage
The firm’s continued bullishness on Seattle reflects deeper structural advantages in the region’s technology ecosystem. Beyond the obvious presence of Amazon and Microsoft, the Pacific Northwest has developed a distinct technical founder culture that prioritizes product depth over hype cycles. This aligns perfectly with Founders’ Co-op’s stated focus on “ambitious technical founding teams” rather than specific verticals. The region’s universities, including University of Washington’s strong computer science program, feed a steady pipeline of technical talent. More importantly, the success of previous investments like Auth0 and Remitly has created a founder-to-founder mentorship culture that accelerates new ventures. As DeVore noted in his blog post announcing the fund, this people-first approach matters more than any particular technology trend.
Disciplined Investing in a Volatile Market
Founders’ Co-op’s consistent fund size and strategy through multiple market cycles demonstrates remarkable discipline. While many venture firms chased larger funds during the 2021 boom, this firm maintained its focus, positioning it well for the current market correction. The concentration on pre-product and pre-revenue stages means the firm invests when valuations are most rational and technical risk is highest – exactly where their expertise provides maximum value. Their approach contrasts sharply with the “spray and pray” mentality that infected venture capital during the zero-interest-rate period. By sticking to their proven model, they avoid the dilution of focus that often accompanies fund size growth, maintaining the operational intensity that makes early-stage investing successful.
The Future of Regional Venture Capital
The success of specialized regional firms like Founders’ Co-op suggests a broader shift in venture capital toward geographic and stage specialization. As the industry matures, the advantages of local knowledge, concentrated networks, and operational focus become increasingly apparent. Founders’ Co-op’s track record – from their initial founding in 2008 through multiple market cycles – provides a blueprint for how regional firms can compete against larger, geographically dispersed competitors. Their continued ability to raise capital from both returning and new limited partners indicates that sophisticated investors recognize the value of this focused approach. In an era of AI hype and market volatility, their consistent focus on backing strong technical founders solving meaningful problems represents a timeless venture strategy that transcends any particular technology cycle.
