Strategy Session

Strategy Session: Joy Ventures Takes Specialized Approach To Investing

Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.

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Joy Ventures got its start about four years ago, born out of a joint vision of partners and investors who saw an opportunity in companies focused on wellbeing and joy.

The firm has a $50 million fund and started out focused on Israeli founders, looking at early-stage companies with a mission to incubate local companies. Over the last few years, the firm expanded its model and scope and is now investing internationally and in more advanced funding stages, said Miri Polachek, CEO of Joy Ventures.

We spoke to Polachek about why the firm decided to be specialized, the challenges of staying that way, and lessons learned. What follows has been lightly edited for length and clarity.

Miri Polachek, CEO of Joy Ventures

How many investments have you made?

Polachek: We have nine companies in our portfolio. Initially, we were less concerned with publicizing, but now the companies are announcing the investment. We most recently invested in Embr Labs that has a wrist-wearable for thermal regulation.

What is the firm’s investment thesis, and how did you come to it?

Polachek: Where we started was narrowly focused around emotional wellbeing, which has a direct affect on your emotional state, reducing stress, improving mood and enhancing sleep.  Over time, we have taken the holistic approach to how to look at improving lives with joy, and it can be anything related to social, physical and wellbeing. What we look for is even less about labels and more about if the experience created feels good and brings meaningful change. We are also in the consumer space, so we care about human-centered approach and design that can be seamlessly incorporated and used regularly.

What are the benefits to specializing in a specific area of interest?

Polachek: To the companies, we bring deep expertise into one domain. We have built an understanding of the market, network, service providers and experience to help companies across all of their stages.

Are there any challenges to taking this route?

Polachek: The main challenge is getting enough deal flow. We could do digital health, and that is huge, but consumer wellbeing is still nascent. There are hundreds of companies, many in the first generation of wellbeing, so they will probably not be the ultimate solutions — it’s very much one-size-fits-all or a content library of meditations. It is not as personalized for specific users, and the experience of using the products is not yet as good as we like to see or not necessarily effective.

We still believe in the opportunity and potential. Those are some of the reasons we have a unique model where we invest in companies out there and provide resources to supporting founders with crazy ideas. There is still so much opportunity, and we believe there is a need to build up new ventures and bring domain-specific support to help them start things from scratch. We can be their sounding board and initiate prototype and customer experience.

What lessons have you learned along the way?

Polachek: One very generic lesson is all about the founders and having to pick great teams. There is a fine balance between smart people who are experienced and smart people who are not very experienced. You can tell they are bright, motivated and hardworking, and have to bet on their ability to execute. Then you have experienced founders who know how to build a company. It’s hard to put a finger on who will succeed — not just execution, but the relationship with your companies. Find people you believe can execute and work well with. We are still very early in the process, and the companies are still young and don’t all have success stories yet.

We believe, in our space, that great ideas will be born out of the intersection of disciplines: creative and human-centric combined with technology and business. We’ve learned over time how to negotiate deals and how to find companies. We pride ourselves on believing in being approachable and community driven, engaging with the community, and engaging globally, so we hear from anyone who has a startup and wants to innovate.

Illustration: Dom Guzman
Photo of Miri Polachek, CEO of Joy Ventures, courtesy of the company

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