1Mby1M Virtual Accelerator Investor Forum: With Mike Edelhart of Social Starts and Joyance Partners (Part 2)

Sramana Mitra: Social Starts and Joyance Partners are two separate funds. What are the fund sizes?

Mike Edelhart: We are about $70 million all in. We will be more than doubling in size. We are investing out of Social Starts fund four which is just under $20 million. Social Starts is about $50 million all-in across the funds.

Joyance, which is a single-LP fund, is $7 million right now. It is one fund investing in the US and Europe. It will be four funds by this time next year. We are just starting the fund raise for Social Starts fund five. 

Sramana Mitra: You started off by saying you’re investing globally but Joyance is US and Europe?

Mike Edelhart: That’s correct. Right now, Joyance is a US-based fund that invests in the US and Europe and occasionally in Asia. We are doing our first investments from that fund in India right now. Next year, there will be a full Joyance fund based in Europe. Social Starts will be a worldwide fund. 

Sramana Mitra: Where are you based?

Mike Edelhart: During these interesting times, in San Francisco. We have folks all over the US and Europe. Generally I’m in the Bay Area and New York, Europe once a quarter, and several times in Asia. 

Sramana Mitra: Let’s talk a little bit about some of the companies that you’ve invested in that are representative of how you think about investing.

When you talk about a particular case study, talk about how you encounter them. What did they come to you with? What is it about them that convinced you to write a check?

Mike Edelhart: Before I talk about the companies, it’s probably best to talk about how we operate the fund. It’s not like most venture capital funds. Each year, we take our funds all the way to the foundation.

We rebuild them each year based on a tremendous amount of research – macroeconomics, scientific, and human trend research to identify 8 to 10 specific investment areas of focus for that year. We alert our team to look for companies in those areas. Our team is very diverse.

The team is backed up by a suite of AI tools that we have built here essentially designed to light up every brand new company in the areas that we are interested in. We identified 10,000 companies last year. We evaluated 6,000 companies last year to drive 61 investment transactions.

We’re the third or fourth most active early stage fund by deal volume at any given point in time. In many cases, we found them. Sometimes, companies will find us. As often as not, we will actually reach out to the companies based on the research.

When we started, Social Starts was tracking wearable social mobile technology. We were present when Ben Silverman of Pinterest gave his first ever public presentation on the ideas that led to Pinterest. We wrote his first check. We have been investors there since the beginning.

Using these techniques, we picked up the early indications of e-commerce and wrote the first check to Box. In fact, we discovered that company while the CEO was still at Zynga. That’s the pattern of our fund. Since 2016, we have focused on individual health in the same way. We talk about five T’s. The first is timing. It’s the single biggest reason that startups fail.

Why we put so much effort in identifying these segments each year is we want to be sure that right now is the right time for this segment. The science is right. The human attitude is right. The world situation is right for this to be become real and important to a lot of people today. We test for that. We actually publish this in blog posts.  

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mike Edelhart of Social Starts and Joyance Partners
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