Kushner & Weinstein: Jewish VC Insiders
Josh Kushner, son of Charlie Kushner and brother of Jared Kushner, runs Thrive Capital together with his VC partner Jared Weinstein, a former ‘body man’ for President George W. Bush who was born in Birmingham, Alabama where his parents are prominent members of the local Jewish community. They were recently profiled by Crain’s New York Business.
The moment when Facebook purchased Instagram last April for $1 billion should have been a cork-popper for Thrive Capital. Four days earlier, the small venture-capital firm had been the lead investor in a $50 million financing round that valued the photo-sharing app at $500 million.
But instead of toasting the unexpectedly speedy and lucrative exit, partners Josh Kushner, 27, and Jared Weinstein, 33, rewarded their staff with motivational Post-it Notes stuck on their computer monitors: “Heads down. Stay focused. Ignore the noise.”
Thrive is a venture-capital shop that attempts to tune out any unnecessary din. Its website is a blank white page with only an email address in small print listed as a contact and a one-line description of the firm. The Twitter account for Thrive has never tweeted. There is no Facebook page.
“We’re not out there because it’s not about us,” Mr. Kushner said, sitting in his office in the Puck Building, which happens to be owned by his family, on Lafayette Street . “The best way to find out about us is to ask people we’ve worked with in the past.”
That’s all rather rare for a typical VC firm that touts its most successful investments and showcases members of its team online. Thrive can afford its cool, silent-partner approach in part because it’s already part of an in crowd of tech and wealth in New York City.
Josh Kushner is the youngest son of the real estate developer Charles Kushner and the brother of Jared Kushner, CEO of the company that owns The New York Observer and husband of Ivanka Trump.
As an undergraduate at Harvard, Josh Kushner was roommates with Alexander Blankfein, son of Goldman Sachs CEO Lloyd Blankfein, and Alexander de Carvalho, an heir to the Heineken fortune. His Instagram feed includes beautiful stills of his girlfriend, Victoria’s Secret model Karlie Kloss. He counts tech enthusiast Ashton Kutcher, whom he met through his brother, as someone he turns to when he needs to bounce around business ideas.
It’s a rarefied world Mr. Kushner travels in, and yet he comes across as shy and serious. He recently moved into an apartment two blocks from the office, he explained, because he found himself spending too many nights sleeping at his desk.
Mr. Kushner claims that the midnight-oil lifestyle suits him more than attending red-carpet events—and that he’s content to remain known as “the brother of Jared.”
He says he loves real estate and the family business, but is eager to make his own name in a different realm.
The White House years
Meanwhile, his VC partner, Mr. Weinstein, offers a different set of insider contacts. He worked in the White House between 2002 and 2009 and for three years served as President George W. Bush’s “body man,” charged with anticipating the day-to-day needs of the leader of the free world and accompanying Mr. Bush just about everywhere.
Mr. Weinstein is still close with the former president, who remains available should he ever need advice. In fact, it was Mr. Bush’s counsel that led Mr. Weinstein to Mr. Kushner.
The two met while sitting next to each other at a Harvard Business School event for accepted students that Mr. Weinstein had originally considered skipping. His sights had been set on Stanford, and his visit to Cambridge, Mass., was perfunctory, to appease Mr. Bush, who recommended Harvard, he said. Mr. Weinstein enrolled at Stanford, but the pit stop paid off. In 2011, he joined Mr. Kushner in New York City as partner.
Since then, Mr. Kushner and Mr. Weinstein have established themselves as a new breed of venture capitalist—one with an adult-size bank account but no adult supervision; with little operating experience but a well-connected family and social network; and with the good fortune of setting up shop in New York City at the moment it became cool to be a tech entrepreneur on the East Coast.
“They don’t have an experienced gray-haired partner,” said veteran New York tech entrepreneur Kevin Ryan, CEO of online retailer Gilt, who doesn’t have any business dealings with Thrive. At 33, Mr. Weinstein is the oldest person on the nine-person team. “What they do have is a network of 30-year-olds who they can help hire into your company,” Mr. Ryan said. “I find them more interesting and creative, with their finger on the pulse, than many other firms.”
When Mr. Kushner started the firm in 2010, it was widely assumed he was just another trust-fund kid playing around with a chunk of the family’s change. His first round was funded with $10 million, almost entirely by media executives. The small pot was enough for Mr. Kushner to make seed investments next to more established venture-capital firms like RRE Ventures.
“When they started, people thought daddy bought Jared [Kushner] a newspaper and Josh a VC job,” observed Sam Hamadeh, founder and CEO of PrivCo, a firm that specializes in research about private companies. “But family money can only get you so far. If that money doesn’t make you money, you’re not going to get more investments.”
Their early investments were successful: Hot Potato, a social–networking site, was purchased by Facebook in 2010 for $10 million in cash. Group-texting app GroupMe was sold to Skype in 2011 for more than $50 million.
The summer Mr. Weinstein came on board, Thrive raised institutional money for the first time, from Princeton University, and secured backing from PayPal founder Peter Thiel and Hall Capital. In September 2012, Thrive raised $147 million. “Three-year-old venture-capital firms simply don’t typically raise $147 million in venture funds in just 10 weeks,” Mr. Hamadeh said.
But Thrive has a proven track record for such a young company. It has made early investments in online eyewear startup Warby Parker, crowdfunding site Kickstarter, online women’s retailer Nasty Gal, 3-D printing company MakerBot, scientist social-networking site Research-Gate and music site Spotify, among many others.
Mr. Kushner describes the fund as “stage agnostic,” but Thrive is perhaps best known for coming in early and playing a significant role beyond just providing cash in building a company.
Thrive recently bet on Harry’s, a website that sells handmade razors and shaving products, after getting to know the founder, who was part of the original Warby Parker team.
“They’re on the board of our company,” said Harry’s founder, Jeff Raider, referring to the VC team. “They’re very close partners we built the company with. We’ve hired three people directly through Thrive. The fact that they’re involved lent us a ton of credibility.”
A major reason Thrive is able to provide support to its partners might be because it doesn’t take on too many projects at once. In its first year, Thrive funded only four companies; since 2010, it has averaged six to 12 investments a year, a spokesman said. It now funds more than 40 startups. Other firms of the same size typically make 30 to 50 investments a year, according to PrivCo.
“[Thrive] only backs and actively supports its handful of top ‘draft picks’ each year,” Mr. Hamadeh said, “while some other VC firms just throw everything at the wall and hope some of them stick.”
A few weeks ago, Mr. Kushner was headed to a lunch with another entrepreneurial partner, Robert Reffkin, founder of real estate website Urban Compass. The two got to know each other during Mr. Kushner’s brief stint at Goldman Sachs, where he worked before business school. Thrive was an early investor in Urban Compass, an online apartment-hunting tool that pairs listings with “neighborhood specialists.” It now has 80 employees. Mr. Kushner remains involved in many of the strategic calls at Urban Compass, which plans to one day go public.
“I believe businesses can be built from anywhere,” Mr. Kushner said. “And the most creative people in the world are in New York.”