J-Ventures investors meet in Palo Alto in April 2023. (Photo/Courtesy J-Ventures)
J-Ventures investors meet in Palo Alto in April 2023. (Photo/Courtesy J-Ventures)

This Jewish-founded VC fund calls its unusual funding model a ‘capitalist kibbutz’

Israeli and American Jews have found common cause in the Silicon Valley orbit of venture capital, turning what is ordinarily a competitive, highly individualized system into a collective with shared goals.

Prominent venture capitalists Jim Koshland and Oded Hermoni are founding partners of J-Ventures, a fund they launched three years ago and describe as a “capitalist kibbutz.” They decided to refer to it that way because investors from different industries carry out much of their work as a team, akin to the collective work of a kibbutz: They all bring their expertise to the table, everyone’s opinion is considered, and they make investment decisions together.

One of the fund’s broader missions has shifted over the past decade from bridging a gap between local Israelis and Jews, to connecting Jewish entrepreneurs, investors and community leaders worldwide.

“The Jewish world is fragmented, and it’s a problem,” Hermoni said. “We all have a cousin in Israel, but Jews in New York don’t really know Jews in San Francisco anymore, so we’re doing something to proactively connect people by building trust through investment.”

J-Ventures now has $70 million under management and more than 400 investors who include venture capitalists, startup founders and community leaders — most from the Bay Area and Tel Aviv, with some in other countries such as Australia and Uruguay.

Collectively, the group has screened over 10,000 companies and together invested in 43 startups in various sectors — from payroll and worker compensation startup Hourly to bee pollination technology inventor BeeHero. J-Ventures invests up to $1 million per startup and often coinvests with larger venture firms, such as Bessemer, Lightspeed and Andreessen Horowitz. In total, startups backed by J-Ventures have raised a cumulative $2.5 billion.

Jim Koshland, left, and Oded Hermoni are the co-founders of J-Ventures.
Jim Koshland, left, and Oded Hermoni are the co-founders of J-Ventures.

Nearly a decade ago, Koshland and Hermoni leveraged their track records as investors in more than a dozen “unicorns,” or privately held startups valued at $1 billion or more, for a pilot project: to connect “two tribes” — local Israelis and American Jews — in a business context. They reached out to their network of tech and community leaders to get the project off the ground.

“It worked extremely well,” said Guy Miasnik, a Bay Area-based Israeli entrepreneur and original member of J-Ventures. “The quality of the people, as well as the quantity of the people joining, created this new ecosystem where the two tribes found commonality in working together.”

The team gained momentum and in 2015 — four years before J-Ventures — launched a $2 million seed fund for early-stage, individual angel investing (investments made in exchange for company equity). Called J-Angels, it attracted a good number of executives and investors, including angel investor Marc Abramowitz, Alloy Ventures Partner Dan Rubin and former Jewish Community Federation and Endowment Fund board chair Tom Kasten. Members consulted with one another on smaller projects, but they didn’t invest together or make decisions as a group.

“Then people wanted it to be even bigger and to create a real fund, so out of that came J-Ventures’ kibbutz concept,” said Koshland.

The fund’s 400-plus investors, known as limited partners or LPs, aren’t silent. In J-Ventures’ unusual operating structure, all involved pull their weight, referring startups for potential investment, say, or using their expertise to help with research and recommendations.

Over the past three years, J-Ventures has grown, and a fair number of new members aren’t Jewish or Israeli. Yet the collective spirit of a kibbutz holds, Hermoni said. To maintain the egalitarian ethos and make sure no single voice dominates, there is a $500,000 cap on the amount that anyone is allowed to invest. A second approach has been to filter for the right people.

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“Everyone who joins is very accomplished, but we also make sure that they’re a mensch or wo-mensch,” said Hermoni. “We don’t have schmucks whose egos are too big for a kibbutz. So everyone is humble and contributes something.”

Since the project’s inception, members have been inspired to launch J-Ventures offshoots: strategic stewardship provided by J-Advisory; a giving foundation called J-Philanthropy; knowledge sharing through J-Insights; environmental, social and corporate governance funding through J-Impact; and a fellowship that teaches college-age cohorts the foundations of investing called J-Fellows. There is even a “sanhedrin,” modeled on the rabbinic courts of ancient Israel, that allows members to discuss contentious issues of the day such as the proposed judicial overhaul in Israel and growing antisemitism.

The apparent camaraderie and absence of ego that are hallmarks of J-Ventures were striking during a recent monthly meeting in Palo Alto. With a reporter observing, several dozen members sat together and evaluated three new startup pitches.

In a sort of informal parliamentary style proceeding — or “minyan” as Hermoni calls it — the group voted to conduct due diligence on two of the startups and formed committees of a half-dozen experts on the subject matter.

Among the LPs present in the recent meeting were Y. Dan Rubinstein, Physera’s co-founder and former CEO, and his son Gil Rubinstein. The high school senior is a program lead for J-Fellows. “A true kibbutz is made up of people of all ages,” the teen said.

Indeed, the room was full of multiple generations, including Hermoni’s 10-year-old daughter Lia. After a Zynga executive opined on one of the startup’s $25 million funding rounds, Lia asked if the company had tested its gaming product on kids, who tend to be their core consumers. It was a great question, several members agreed.

“Even if we have our differences in the Jewish community,” said Hermoni, “we can manage to set them aside and work together, because we all care about the next generation.”

Valerie Demicheva
Valerie Demicheva

Valerie Demicheva is a journalist and photographer whose work has been published in the San Francisco Chronicle, Women's Wear Daily and Silicon Valley Magazine. She's covered culture, tech, media, restaurants and philanthropy in the Bay Area for over a decade.