In this episode of the Startup Project, host Nataraj sits down with Aviel Ginzburg, a central figure in the Pacific Northwest’s tech scene. Aviel’s journey is deeply intertwined with Seattle’s startup evolution, from founding Simply Measured (acquired by Sprout Social) to his roles as Managing Director at Amazon’s Alexa Accelerator and now General Partner at Founders Co-op. He offers a candid look into the world of early-stage investing, sharing how his perspective has shifted from focusing on product to understanding the founder’s core motivations—often finding success in those who are ‘irreparably broken’ and driven by an innate need to build. Aviel also discusses the recent volatility in the venture market and introduces Foundations, his new community-focused initiative designed to be an anchor for Seattle’s startup ecosystem, aiming to foster the collaboration and serendipity needed for the next wave of innovation.
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Nataraj: Hello everyone, welcome to Startup Project. I am your host Natraj. Today my guest is Aviel Ginzburg, founder of Simply Measured, which was acquired by Sprout Social. He was managing director at Amazon’s Alexa Accelerator, he’s also a general partner at Founders Co-op, and he’s now co-founder of Foundations, which is a shared workspace and accelerator, an anchor to Seattle’s VC ecosystem, or trying to be.
Aviel Ginzburg: Exactly. The way that you’re answering it shows the work that we need to do. We’re defining it right now as an invite-only community of founders in the startup ecosystem. It has one part that looks like an accelerator and one part that looks like a co-working space, and we’re going to do a better job of explaining what it is as we figure it out ourselves in 2025.
Nataraj: We’ll get to Seattle Foundations and everything about it. A good place to start this conversation would be with Chris DeVore, your partner from Founders Co-op. He was on one of the best episodes of Startup Project. We had a really great conversation, and I’ve been following Founders Co-op’s work and Chris DeVore for a while. How did you get to start working with him?
Aviel Ginzburg: For better or worse, my entire career has been wrapped around Founders Co-op and has involved Chris. I graduated college in ’07, at the beginning of the Great Recession. I knew I wanted to do something in tech, maybe tech and finance. I was from the East Coast, and the plan was to go to New York. Then everything just went to shit. All of my peers who were graduating were having their jobs pulled. So I had been building small website businesses to pay my bills in college, and I just said, okay, let’s go all in and do this.
So a buddy and I decided to found a company. Before we closed on the friends and family money, I realized very quickly that we were about to lose all of it because we had no idea how to actually start a startup. We were reading TechCrunch and thinking, let’s do that, but neither of us had worked at one. We hadn’t even really talked to someone who had been there and done that. So I said, I have to go West and see what this is like. I didn’t know anyone in SF, but I had one good high school friend at Microsoft, so I wound up in Seattle not knowing anyone.
Less than a week after I started, there was a startup weekend. Back then, everybody would get in a room and build together. There were 150 people from early Amazon, Microsoft, and the budding Seattle startup ecosystem. It was like, okay, let’s pick an idea, form divisions, and all build together. It’s insane to get 150 people to work on the same thing at once. It’s a complete shit show. But I raised my hand and said, I’m a designer, I’ll lead the design department. Was I a designer? I don’t know, but I was more confident than everyone else who said they were.
So I found myself rubbing shoulders with what eventually became the who’s who of the Seattle tech community. Out of that, I landed a job at a company called Aperture, which was funded by Founders Co-op and Madrona. Within two weeks of arriving in Seattle, I was right in the middle of that community, so I got to know Chris. He knew my plan was always to start a company. I was clear with the founders that this was for me to learn and there was nothing they could do to keep me.
I was lucky enough to watch that business work. I think so many people start their career at a startup that goes nowhere or at a big company where you’re stuck in a tiny hole. I was able to write code, design products, talk to customers, and act as a product manager. When I felt I had enough confidence, paired with the fact that I think what makes founders founders is that they just can’t not start something, I started working on nights and weekends with my best friend, hacking together anything we could with Twitter data and Facebook data. So I said, it’s time to go off and start a company, but I don’t know exactly what it’s going to be. Chris and his then partner, Andy, said, we like you, you should do it, we’ll just write you a check. We incorporated as Untitled Startup, which was the precursor to Simply Measured. Chris made me put together a pitch deck that he ripped to shreds and made me feel like he wasn’t going to invest, but he did anyway.
So I transitioned from an early employee to founding CEO, which then transitioned into head of product and engineering. But I was finding that I was much more interested in the zero-to-one of things—going from idea to MVP to customer traction. So I was naturally spending more time with Chris and Founders Co-op. I found myself wrapped up as a pseudo-venture partner, which turned formally into a venture partner in 2014. Then, when we sold Simply Measured, I transitioned into a GP role. It has been 17 years of working every possible seat inside of the Founders Co-op portfolio. Now, it’s just Chris and I working together and investing in new companies.
Nataraj: So talk to me a little bit about what Founders Co-op is doing right now. Are you actively investing? At what stage and what type of checks are you writing?
Aviel Ginzburg: We are at the tail end of our fifth fund, which is a $50 million fund. The average check size is about a million to a million and a half, investing in pre-seeds and seeds in the Pacific Northwest mostly. COVID sort of screws up what geography really means, but we find that we gravitate towards founders who are culturally Seattle. That means you learned how to build at an Amazon or a Microsoft and you gravitate more towards unsexy business workflow problems rather than flashy consumer products. We’ll be doing the first close of our next fund within the next month and are actively deploying. The thing about us is neither of us are finance people. We’re both founders ourselves. We never worked at a larger venture firm. We have no associates. We act very much like a startup itself. Our process feels more like interacting with a former founder who’s deploying his own capital into really early-stage things that they find interesting.
Nataraj: One thing you mentioned on a podcast was that you did these things overlapping—you were an investor while you were a founder. I can relate to doing multiple things. I invest, I work at a big company, and I do a podcast. Talk to me about how your thesis of investing and finding companies evolved.
Aviel Ginzburg: When I was starting to make investment decisions as part of Founders Co-op, I was still actively operating. I was anchoring too much on product and on what I would do if I was running the company. I was thinking way too much about the product, the customers, and the opportunity rather than the founder. That was a hard lesson to learn because I invested in a couple of companies and watched as their direct competitor became a monster. I knew that was going to be a thing, but what I really messed up is that the only thing that really matters is the people. I just did not yet have the pattern matching to know what behaviors and motivations make a great founder. So much of success is about luck and upcoming challenges that you aren’t expecting. I was bringing my perspective of, I know what good product looks like, I know how to take things to market. Frankly, that initially made me a bad investor.
Nataraj: Right now in AI, you see certain types of companies will succeed, but now you have five competitors in the area. Who are you going to invest in?
Aviel Ginzburg: As a fund, I think you can run a strategy if you are a thematic fund with enough dollars and access. You can see everything in a space and pick the winner. It’s hard to do that at the pre-seed and seed stage. Ultimately, as a seed-stage investor, your job is to get really good at identifying a very specific type of founder and be good at knowing how to help them. Focus on those folks. Don’t feel FOMO about missing out on other things.
It’s embarrassing to look at what a lot of folks do. They’ll put out a whole thesis on AR/VR, then they’re a crypto fund, then an AI fund. Then you learn pretty quickly that a company did a 180-degree pivot after they invested, so the whole reason why it was in the fund is completely wrong. Ultimately, early-stage investing is like casino-level risk in people. The reason why it works is that you make enough investments that something does work and takes care of the rest. How you become good at it is through having enough experience with enough founders and seeing the movie play out enough times. I was part of the selection committee for Techstars Seattle from 2010 through 2020 as well, so I have seen thousands of companies from pitch to exit. Ultimately, when I look at a founder, I look at how they’re tackling an opportunity, the shape of the market, and the market opportunity. I can see all the different directions this can go. What you are underwriting is really just the human and the market they’re going after. That’s it.
Nataraj: You mentioned pattern matching. Are there any specific things that are deal-makers or breakers when you look at certain types of founders?
Aviel Ginzburg: Motivation matters a lot to me. Why are you doing this and where does your energy come from? A lot of times, the folks that have that infinite, renewable energy resource are those who are building something because there’s something broken in them. They’re just filling a leaky bucket for the rest of their life with creating something new. They find happiness and satisfaction in the work, in building, not in a specific technology or product. They just have to be putting something into the world or they’re falling apart. You work with crazy people, and I love that.
Mental health is a big factor. Depression is real, I’ve lived this as a founder—high highs, low lows. But your job is to ride that wave. You don’t want to find someone who gets one-shotted by finding peace and happiness and is no longer motivated. I’ve seen it happen where someone says, ‘I discovered the love of skiing, and now I have a family and I ski, and I’ve found balance in life and I no longer care if my company succeeds or not.’ You want to find founders who are irreparably broken, so they’re just going to keep charging forward and build. My bond with them is that I’m the same way. I’m not here giving you money trying to take advantage of what’s broken about you. I’m saying, I’m broken too, and living this path fulfills me. It can fulfill you too. Let’s go on it together.
Nataraj: That’s a pretty good way to put it. I grew up in India, and when I came to the US, I noticed a similar dynamic. Entrepreneurship in the US is so de-risked in a lot of ways. The only risk you’re taking is mostly on time. If you’re a developer at a big tech company, you should technically be doing a startup because it is de-risked. You will find some seed money eventually. The Indians who come here are a bit more broken by their childhood. They have more motivation. If you have a really stable childhood, that motivation doesn’t exist. They’re happy doing what they’re doing.
Some funds invested in narrow categories like AR/VR during the 2020-2022 period. It was a sign of so much capital that there were funds with inexperienced fund managers being created left and right. We created a lot more new funds which will never be successful.
Aviel Ginzburg: Money became functionally free. So you’re looking at, if money is free, where do I find alpha? When you run out of ideas, you say the best place to put that money is in the unknowable, in things that don’t exist yet. That led to an outrageous amount of first-time funds. A first-time VC is bringing their network with them. They haven’t yet saturated it. It’s all these amazing, smart people I know from my operating days, now let’s give them capital. Somebody can get $20 million and immediately deploy it into all these awesome-looking companies because they know the right people. An outsider looks and thinks, this person is a great investor. But you realize this isn’t really a venture capitalist; this is just someone with a great network who now has capital and just deployed it right into their network. They were not being thoughtful about if there is a real business. All that was also masked by markups.
The fun part is the excitement you get around a new idea. Then you invest, and it’s all downhill from there. Nothing ruins a good story like data. In the beginning, you’re going to the moon. Then you learn, this business is terrible, what was I thinking? You have this high, and then it goes to shit. That first investment meeting, you’re just wondering, what is this? You come into that first meeting thinking, how bad is it going to be? Then you build yourself out of the hole into a great company. That’s where the real work is. A lot of folks will not raise future funds. They’ve realized this isn’t that fun or enjoyable. The side effect is there are a lot of companies that raised money that shouldn’t have, and we’re still going through that pain.
Nataraj: I think the biggest distortion was the opportunity size. Every idea was exaggerated to be a billion-dollar opportunity.
Aviel Ginzburg: I would take that even further. People were saying there are $10 billion opportunities because unicorns went to decacorns. That started to make the model work. But if the company can only be worth $1 billion and you started at a $50 million pre-seed valuation, your fund is fucked at inception.
Nataraj: There’s also this winner’s bias. The winners became the Mag 7 and these trillion-dollar companies. So now everyone will say ‘trillion,’ and then you can justify a seed round of a billion dollars, which is happening with AI companies.
Aviel Ginzburg: There are some areas where there could be winner-take-all market opportunities. But I’ve also come to see over time this illusion that great companies have an arc that’s constantly up and to the right. Things move so fast these days that there are amazing companies where their enterprise value is high and then it goes to zero because the world moves. Part of your job is to invest in the company and know when to get out.
For example, we invested in a seed round of this company called Ally, which ended up selling to Microsoft. It was OKR software. We invested right before OKRs took off and before COVID, so there was this insane accelerant. We got approached by Microsoft for an acquisition. At the same time, we had a term sheet from a major fund offering $100 million at a billion-dollar valuation, even though we had single-digit ARR. We had many conversations with the founder about what’s the right way to go. We ended up selling to Microsoft.
Now, fast forward two and a half years. Microsoft acquired the product, put it into Microsoft Viva, and made it Viva Goals. Then they announced they’re just shutting it down because their strategy has shifted to co-pilots. They just don’t care anymore. Those two other competitors are functionally screwed. So, was that a bad investment? I underwrote a category that never came to exist. But one investment returned nearly a billion dollars and another similar one will return zero. Trying to reconcile that is crazy. You have to think about that sometimes, even in a great business, the local maximum may be the global maximum.
Nataraj: Let me ask you this, was that acquisition sort of a fund returner for your fund? So it was an easier decision for you from the perspective of the fund?
Aviel Ginzburg: As a seed investor, I was very aligned with the founder. It was a meaningful return rather than just another turn on capital.
Nataraj: This reminds me of Clubhouse, which got an acquisition offer of $4 billion from Twitter. They went and raised a similar amount from A16Z at a similar valuation. When COVID dropped, the hype for audio products dropped, and everyone featurized Clubhouse. At that time, the rational choice, even if you’ve only spent two years on the company, is to sell.
Aviel Ginzburg: I think it is. That’s the point I’m making. Just because Clubhouse got featurized and there was no long-term residual enterprise value does not mean it should be viewed as a failure. You created something of value that there were buyers for. Something does not have to exist on its own in perpetuity to be successful. We sort of lost sight of that over the past decade. It almost became a bad thing to sell your company, like you sold out. Instead, the chip on your shoulder was to build a unicorn. Now we have hundreds of unicorns that are going to go to zero.
Nataraj: One more point and we’ll shift to Foundations. This was also the time where secondaries were huge. Founders who were shrewd enough to make the rational choice of taking more secondaries were also winners.
Aviel Ginzburg: You need to be able to keep founders properly incented, so I expect some semblance of secondaries to continue. But it got nutty.
Nataraj: Moving to Foundations, I was a Techstars mentor for the last two batches before it got shut down in Seattle. I saw this story closely and can relate to how important that space was. It was one of the anchor points for the Seattle startup community. It got shut down, and I felt that Seattle is probably second or third after SF in terms of talent, but we are all somehow not living up to that potential. Talk to me about why you started Foundations, what it is going to be, and what its goal is.
Aviel Ginzburg: The general thesis is that Seattle should be a much better place to be a founder than it is. Coming out of COVID with the rise of large language models, it was embarrassing to watch the phoenix of SF proper with YC leading the charge. The difference is insulting. I went on a listening tour with founders in the area and found this desire to work and build around others, but also a desire to leave Seattle, which was not a good thing for our ecosystem.
I went back in reflection to why Techstars came to Seattle in the first place back in 2010. At that time, it was the rise of cloud and the SaaS business model. There was this new wave of founders excited to build things they couldn’t before. But there were no best practices. The magic came from people working in real-time around each other and sharing knowledge. That rhymes exactly with what we’re experiencing with large language models right now.
Every startup ecosystem needs an anchor point plus rhythms that allow the earliest stage folks, those who are actively building, and those who have been there and done that to get into the same place at the same time. The idea for Foundations was, can we do that and kickstart a flywheel? We need to anchor this around a physical space because that’s something all three of those categories need right now. We created all these different rhythms anchored by events and an entrepreneur-in-residence program to get people together. Our goal is to help people quickly on their way. Success is having a founder who went down and did YC, while others who were thinking about leaving Seattle have instead found a home and a community here. So far, it’s been a great success. Our mission is to serve the founder community in Seattle and make this a much better place to start a company.
Nataraj: So you’re doing Foundations, but have you thought about what other things should exist in Seattle to live up to its potential?
Aviel Ginzburg: There is a very big need for everything from founder matching to the incubation required to get people out from big tech companies. It’s weird about Seattle that we have more venture studios than venture funds. I think that’s because for a lot of people who have been at big companies, it’s a more comfortable path. But we should have another product here. Going to AI tinker events, you see all these people who are not quite founders, but the rise of large language models has been enough of a catalyst for them to say, I want to go out and start my own thing. There’s room for something more structured that could look like an accelerator.
Nataraj: One thing I also think is missing is that we don’t have enough pre-seed funds that write quick, small checks, considering how much talent we have. We have more studio models where it takes longer to get that first check.
Aviel Ginzburg: It’s not that hard to raise that money from the Bay. What we don’t have, and this will take time, is tons of folks in the Bay Area who made their money on startups and write 50k, 100k checks to people who remind them of themselves. The people who made money in Seattle made it by never leaving Microsoft or Amazon. They buy boats and houses on lakes. Their hobby is not investing in startups. We are starting to see those exits and people have that money, but we don’t have one-hundredth of what there is in the Bay Area. We just need to keep investing in our startup community and building things. Five to 10 years from now, there will be a lot more folks who have had those exits and can write those really quick, easy checks where they’re not asking for a business model. They’re just looking at the human and saying, I’ve been where you are, I want to be part of your journey.
Nataraj: What are you consuming right now—books, podcasts, Netflix—that is influencing your thinking?
Aviel Ginzburg: As someone who has multiple jobs and an eight-year-old, you would be surprised at how much I can consume. For podcasts, I listen to All-In, Rogan, and Jordan Peterson, and then I just pick up random other things. I love sci-fi, so I pretty much watch every sci-fi show that is out there. It’s been a year since I’ve sat down with a good book, but I was reminded to reread ‘The Courage to Be Disliked.’ I would highly recommend that book to anyone who’s ambitious.
Nataraj: What do you know about investing that you wish you knew when you first started out?
Aviel Ginzburg: The feedback loops on investing are really long. I am a builder; I started my career as a software engineer. As an investor, if you try to do more than you should, you mess things up because you are not the co-founder. If you are the type of person who really needs the dopamine hit of having an impact, you need to find other places in your life to place that energy, hopefully in ways that are accretive to your work as a VC. And that doesn’t look like just shit-posting on Twitter, because that’s what I see a lot of people do with that energy.
Nataraj: I think that’s a good note to end the conversation. Thanks for coming on the show and sharing your thoughts. I hope Foundations will become an anchor for the Seattle ecosystem.
Aviel Ginzburg’s insights offer a valuable look into the mind of an experienced founder and investor. His focus on founder psychology and his mission-driven approach to rebuilding Seattle’s tech community provide a compelling roadmap for the future of the ecosystem.
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