Raised $1 million from 22 people to start Amazon in mid-1990s
Co-founded venture capital firm Madrona Venture Group
Tom Alberg, co-founder of the venture capital firm Madrona Venture Group and an early investor in Amazon.com Inc., has died. He was 82.
Alberg died Friday, according to a statement released by Madrona.
In the mid-1990s, Alberg helped Amazon founder Jeff Bezos raise money for the fledgling e-commerce company. Part of Alberg’s role was to explain the promise of the infant internet to potential backers. It took 12 months, but the fund raised $1 million from 22 people, including Alberg and Bezos’s parents, who typically invested $50,000 apiece for a 1% stake.
“It’s very risky,” Alberg said at the time. “But Jeff is for real. He’s obviously a smart guy. He’s very passionate about it.”
Bezos launched his company in July 1994 and opened the amazon.com website in July 1995 to sell books. In the first few weeks, Amazon made $6,000 to $10,000 in sales, and by the end of September was making $20,000 each week, Alberg said in a 1999 Wired magazine interview.
“It was clear there was a trend there,” he concluded.
To say the least. Amazon went on to become the world’s largest online retailer, selling everything from socks to mattresses (and, yes, books), and Bezos became, for a time, the world’s richest man.
When Amazon went public in 1997, Alberg’s name was the only one of those 22 initial investors mentioned in the S-1 filing. He owned 195,000 shares at the time, a stake he reduced over the years.
Alberg served on the Amazon board for more than two decades, before stepping down in 2019 to make way for new blood. At the time, Bezos tweeted: “I’ll miss his sound judgment, deep well of business & life experience, and his quick wit. He’s a smart business person and even better human.”
Bezos on Saturday issued a statement calling Alberg a friend and a “visionary.” Other tech industry titans including Microsoft Corp. Chief Executive Officer Satya Nadella and Amazon CEO Andy Jassy also paid tribute to Alberg.
Amazon was Alberg’s defining investor moment. But through Madrona, which he co-founded in 1995, Alberg helped advise and take public a range of startups. Most were based in and around Seattle, where he grew up.
One was Impinj Inc., whose wireless technology helps companies identify, locate and authenticate billions of everyday items from apparel and golf balls to luggage. Under Alberg, Madrona also profited from an early investment in storage provider Isilon Systems Inc., acquired by EMC Corp. for $2.25 billion in 2010.
In 2009, President Barack Obama tapped Alberg’s industry expertise and named him to the National Advisory Council on Innovation and Entrepreneurship.
Tom Austin Alberg was born on Feb. 12, 1940, in San Francisco to Thomas Alberg and Miriam Twitchell Alberg. He earned a bachelor’s degree in international affairs from Harvard University in 1962 and then a law degree from Columbia University.
After graduating, Alberg joined the New York law firm of Cravath Swaine & Moore as an associate before switching in 1967 to Perkins Coie, a large Seattle firm. He made partner there in 1971 and was principal counsel for Boeing Co., Alaska Airlines and a number of early technology companies.
Before starting Madrona, Alberg helped sell LIN Broadcasting and McCaw to AT&T and was executive vice president of AT&T Wireless from 1990 to 1995.
He wed twice. In 1963, he married Mary Ann Johnke. They had three children: Robert, Katherine and John. Alberg divorced Mary Ann in 1989 and wed Judith Beck. They had two children: Carson and Jessica. Alberg was survived by Judi, his five children and four grandchildren, Madrona said.
On the side, Alberg taught himself winemaking, working with award-winning vintner Mike Januik to build Novelty Hill Januik Winery in Woodinville, Washington. He was also an avid sailor.
Summing up his career on the Madrona bio page, Alberg said: “The most difficult part of my job? Measuring my enthusiasm for every idea I hear. There are a lot of exciting ideas out there.”
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