Pack Mentality

Ken Horenstein is out to unravel the mystery behind venture-capital investing. In doing so, he seeks to shine a national spotlight on the prolific technological innovations created by researchers at the University of Washington.

Horenstein’s new pre-seed and venture fund, Pack Ventures, is focused almost exclusively on budding entrepreneurs who are part of the University of Washington network, including students, faculty and alumni. Horenstein, who was recruited to lead the company by several prominent members of the Seattle-area VC community, says the goal is to back 25 to 30 founders over the next two to three years, primarily those in pre-seed and seed stages.

Horenstein is quick to point out that he’s not “reinventing the wheel.” Similar funds exist at top research universities across the country, including Stanford,  the University of California – Berkeley, the University of Michigan, Harvard and MIT. Pack VC, however, is the first of its kind in the Pacific Northwest.

The University of Washington has become an undisputed research powerhouse. The UW has spun out about 260 companies since 1990, according to university statistics. Those businesses have raised almost $8 billion in funding, with 60% of that coming in the past five years alone. Based on research from Seattle firm PitchBook Data, Horenstein estimates that the UW network has created 10 unicorn companies (a valuation of more than $1 billion) in the past decade.

Recent successes include Turi, a machine learning-company acquired by Apple Inc. for $200 million; software firm HashiCorp., which raised $16 billion in its initial public offering last year; and several businesses with connections to the UW Institute for Protein Design, including Sana Biotechnology (a $500 million IPO last year) and Lyell Immunopharma, whose IPO generated $425 million. 

Several Seattle-area VC heavyweights are among Pack’s 35-plus founding investors, including Madrona Venture Group Managing Director Matt McIlwain, Pioneer Square Labs cofounder Geoff Entress and Chris DeVore, managing partner of Founders’ Co-op and a longtime UW supporter.

“The UW is a magnet for global talent in both the technical and liberal arts disciplines needed to form high-performing entrepreneurial teams,” DeVore says. “One of the key factors to accelerating the UW’s startup growth is a dedicated pool of risk capital and a network of experienced builders mentoring and guiding the next generation of UW founders.”

For Horenstein, Pack VC is highly personal. He is a third-generation University of Washington graduate who also received an advanced degree from UW. He says Pack is working to take advantage of the federal JOBS Act, legislation passed in 2012 that relaxes regulations on companies seeking to raise funds from investors.

“We’re  intentionally going out and trying to bring in a new group of investors who might not normally be familiar or have access to the asset class,” says Horenstein, a self-described venture nerd who adds that Pack VC can serve as a bridge between typical angel and VC investing. “We feel like this is the right model to actually make something that’s sustainable.”