Trilogy

This post was authored by Yuval Neeman

At Trilogy, we’ve long believed in the strength and potential of Seattle’s tech ecosystem. Since 2006, we’ve invested approximately $300M across dozens of local Seattle startups. In 2012, we identified and filled a critical gap as the first dedicated Seed-stage investors in Seattle, helping fuel the region’s startup growth when infrastructure and early-stage funding were limited.

Over the past two decades, we’ve watched the Greater Seattle Area evolve from a market dominated by a few large incumbents into a thriving, multi-layered startup ecosystem. Today, the city and its surrounding area boast a broader and deeper set of technology companies, investors, and talent than ever before. This growth didn’t happen overnight – it was the result of strong anchors, increasing startup activity, successful exits, and the compounding effects of reinvestment back into the community.

For an ecosystem to really thrive, various supporting layers are required. Our job as seed stage investors is to support some of the earliest stages, but there still remains a vital necessity for startups to be able to scale into growth stage and ultimately—if a few things go right—large public companies.

Layer 1: Lighthouse companies

So, starting with the largest layer: within a 15-mile radius of our office in Bellevue, WA, lies an astounding $5 trillion in technology market capitalization. Anchored by global tech giants, Amazon and Microsoft—our region’s “lighthouse companies”—Seattle continuously attracts elite technical talent. We view these two companies as formative training grounds for a substantial portion of our founding teams.

What continues to be important about the incumbents in our backyard is that despite their size, they remain innovative. They are investing heavily in AI, staying at the forefront of innovation in the industry.

Layer 2: HQ2S and the mid-market

And don’t forget about the companies with their second headquarters based in the Greater Seattle Area. Some of the most recognizable businesses in the world have “HQ2” here, employing thousands of people.

This layer has added to the diversity of our tech talent and business models. Importantly, this layer also helps retain a lot of talent – if you leave Microsoft, you don’t have to move to another city for another Big Tech opportunity.

Layer 3: Notable exits

The next cohort of companies we think about are the notable technology exits that have happened over the past 15 years. This group has helped spur significant re-investment and served as proof-points to counter any sentiment that you can’t scale in Seattle.

Layer 4: Late growth stage “unicorns”

Later-stage investments have also grown, with some of Seattle’s most notable private market unicorns securing hundreds of millions in investment. Not only does it signal confidence in Seattle’s ability to produce market-defining companies, but it is also incredibly good for the early-stage ecosystem.

With more growth capital and exits, we are also seeing inbound talent migration beyond engineers: sales, marketing, and general business expertise is now more ubiquitous. These professionals are often more willing to take earlier-stage roles than traditional operators at Big Technology companies, often joining as early as Series A/B. This phenomenon is a more recent development and is absolutely critical for companies’ ability to scale here.

Final Layer: Early-stage

At the early-stage, institutional capital is relatively abundant. We are biased as we consider ourselves to be a part of this layer, but we think it’s a terrific time to be involved at this stage. Over the past decade, we have seen a steady rise in early-stage VC-backed companies, with the exception of the nationwide post ZIRP-fueled bubble.

Looking ahead

The most recent count of Greater Seattle Area startups is more than 1,400, and we are poised for continued growth.

When we began focusing on seed-stage investments, we were the only dedicated fund in the space. Today, the ecosystem has expanded meaningfully, with many new funds joining the market — a positive trend we’re glad to see and expect will continue.

Trilogy remains committed to our original mission: using the expertise we’ve built over more than a decade of specialized seed-stage investing to support and grow Seattle’s next generation of technology startups.

With a strong talent base, major tech anchors, and a growing investment community, this city is a formidable force in the global startup ecosystem. I look forward to Trilogy and our portfolio companies continuing to compete on a global scale, and the overall future of Seattle’s tech scene and the Pacific Northwest.