Hanauer was born to a secular Jewish family in New York City and raised in Bellevue, Washington.[3] His brother is Adrian Hanauer, majority owner of Seattle Sounders FC and a minority owner of the Seattle Kraken. After earning a philosophy degree from the University of Washington, Hanauer began to work at family-owned Pacific Coast Feather Company, where he served as co-chair and CEO.[4] In the 1980s, he co-founded Museum Quality Framing Company, a large West Coast franchise.[5]
In the 1990s, Hanauer was an early investor in Amazon.com, where he served as an adviser until 2000. He founded gear.com, which eventually merged with Overstock.com, and Avenue A Media, which was acquired by Microsoft in 2007 (under the name aQuantive) for $6.4 billion.[6] He has managed, founded, or financed over 30 companies across a broad range of industries including manufacturing, retailing, e-commerce, digital media and advertising, software, aerospace, health care, and finance, including Insitu Group (purchased by Boeing for $400 million), and Market Leader (purchased by Trulia in 2013 for $350 million).
In 2000, Hanauer co-formed the Seattle-based venture capital company, Second Avenue Partners which “looks to invest in promising teams and transformational ideas in a wide range of areas including internet, consumer and social media, software, and clean energy.”[7] The company advises and funds early stage companies such as HouseValues,[8] Qliance,[9] and Newsvine.[10]