Our Second Generation: Growth and Change at Our Funds

Photo by qinghill on Unsplash

Our funds have been active for 10 years, so it is a natural time for reflection, change, and growth.

Happily, the funds that started it all, Social Starts, are doing quite well. In 2021, we have had four major exits from those early funds. Triplelift and Greenhouse were acquired at near unicorn levels by P/E firms; Epic! was acquired for $500M by the most valuable startup in India, Byju’s; and Boxed is announcing its $930M SPAC. We have also had ultra high-value later-stage rounds such as the current raise from Smart News at a $2B valuation, and Oishii Farms at $400M.

The Social Starts funds were opportunistic and grew out of founder-focused angel investment. Since then, we have greatly deepened our method for finding startups worldwide at birth and turned our full focus on individual health, led by our single-LP fund, Joyance Partners, which we started in 2016. This year, Joyance has added three new funds: A successor to our original US fund, a fund domiciled in Europe, and our first follow-on fund. All will continue to focus on Delightful Moments, how science and tech can help individuals feel happier, healthier, calmer, less subject to pain or anxiety, and more in control. We have passed the 100 investment mark with Joyance and expect to begin seeing initial exits soon.

As our funds have grown, so has our need to manage them more professionally and adroitly. So, we established a management company, Ataraxia Partners, to oversee our current and future funds. Ataraxia is a term from Greek philosophy for a state of profound calm, something we think that people today crave and need.

Ataraxia will oversee the harvest period for our older Social Starts funds, which are now fully invested; as well as manage the Joyance Funds. And Ataraxia will also oversee our new, initial multi-LP fund focused on individual health, SH².

SH² is short for The Science of Health and Happiness Fund. It focuses on individual health, but with a broader lens than Joyance. SH² looks for new science-centric companies that can help people live better, live longer, or both. We are partway through the fundraise for SH² and have made 15 investments from the fund so far, in the US, Europe, and Asia.

All in, these new funds take us to around $185M AUM, nearly triple what we were two years ago.

To keep everything moving forward, we have set up our first Management Group for the funds. Our London investment partner, Neha Tanna, is now Chief Operating Partner for the funds; Michio Painter, our Boston investment partner, Andrew Nealon, our Chief Analyst, and Kevin Dasch, our CFO, join Neha on the Management Group, which will help me run the funds.

While our current funds are young, initial signs of strong outcomes are appearing. Of the 230 active investments across our funds, 24 have valuations over $100M. 20 companies already have unrealized gains over 3X, 5 of those over 10X. And we have 15 companies with IRRs over 100%. None of these measures are final, but they do give us a positive feeling about our strategy and the outcome of the current funds.

What is next for Ataraxia and its funds? Our strategy of identifying the strongest investment segments, finding all the new companies in that frame, investing in the best companies in those areas early, and then pounding capital pre-A into the companies living up to our expectations, is generating a bumper crop of valuable holdings where we have fat A and post-A pro ratas. We will be looking at how best to invest in those on our own or in consort with our LPs in the months ahead.

It has been a great privilege to be part, along with our founder Bill Lohse, of getting our unique family of early-stage funds going. I can’t wait to help our young and talented team move ahead to new achievements in the next few years.

By Managing Partner Mike Edelhart
@MikeEdelhart

Related Posts
Living Longer and Living Better: SH², the Science of Health and Happiness Fund
Why We’re A Data-Driven VC
Where We Are Investing Now: Digital Health and Delightful Moments

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The first venture fund focused on individual health experience, not process.

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Joyance Partners

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The first venture fund focused on individual health experience, not process.

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