Navigating booms and busts: Matt McIlwain’s venture capital lessons

Matt McIlwain, Managing Director at Madrona, has spent over two decades investing in intelligent applications and driving innovation in AI. With a track record including Smartsheet, Apptio, and Isilon, he brings rare perspective from 25 years in venture capital.

Here’s a glimpse of what you’ll learn:

• 00:43 Introduction to Driving Alpha Podcast

• 00:57 Guest Introduction: Matt McElwain from Madrona

• 01:41 Matt's Journey into Venture Capital

• 03:06 Early Years at Madrona and the Dot-Com Bust

• 04:45 Madrona's Investment Strategies and Success Stories

• 06:29 Driving Alpha for Portfolio Companies

• 09:34 Evaluating Founders: The Power of Why

• 24:49 Navigating Exits and M&A Landscape

• 28:25 Life Lessons and Long-Term Perspective

• 32:40 Conclusion and Future Outlook

 

In this episode

Matt recounts his unconventional entry into venture capital—from auto parts to Amazon-era Seattle—and how he joined Madrona just before the dot-com crash. He reflects on the firm’s resilience through market downturns, the evolution of their early-stage to acceleration-stage investment strategy, and how conviction-driven bets like Isilon and Smartsheet became fund-makers despite difficult timing.

Matt breaks down his “power of why” framework for evaluating startups, emphasizing founder-market fit and the value of long-term thinking. He shares candid insights into Madrona’s hands-on approach with founders, how he spots extraordinary teams, and why curiosity is the ultimate trait in successful entrepreneurs. From navigating exits in today’s M&A climate to building enduring partnerships, this conversation is a masterclass in venture capital longevity.