Washington DC(AFP): Just days after the 2016 presidential election, a young venture capitalist called an emergency staff meeting.
Prepare for a storm of publicity, he told one of the start-ups that he had helped found. There would be questions about his political affiliations and loyalties, he said. There would be questions about the survivability of the start-up, a health insurance company named Oscar Health. The world was about to change, he said.
The venture capitalist was Joshua Kushner, whose older brother is Jared Kushner — the husband of Ivanka Trump and one of President-elect Donald J. Trump’s closest confidants. And that meeting at Oscar Health was just the beginning of a new and unsettling chapter for the younger Mr. Kushner.
At 31, Joshua Kushner has built his technology investment firm — Thrive Capital, which has financed the photo-sharing app Instagram and the e-commerce company Jet.com, among others — largely behind the scenes, keeping his head down while pursuing deals. But with his older brother’s rising profile and growing role in the incoming administration, Mr. Kushner is now getting caught up in the scrutiny. Two of his worlds are colliding.
In the weeks after the election, Mr. Kushner has grappled with many questions over Oscar Health. The company, which is one of Mr. Kushner’s most prominent investments, sells health insurance to individuals under President Obama’s Affordable Care Act. That is a law that Jared Kushner is uniquely positioned to influence now that he is a senior adviser to the president-elect, which puts his younger brother and the start-up in an awkward position.
At the same time, Joshua Kushner has had to deal with queries from investors in his venture capital funds who have asked him how Mr. Trump’s ascension would affect his work. Some wondered whether he would join the White House. Others worried that the presidential circus would be a distraction, especially since ties with his brother might make it difficult to maintain a distance.
Mr. Kushner has had to reassure investors that he remains committed to Thrive, which is based in New York and has amassed nearly $1.5 billion from wealthy individuals, foundations and the endowments of universities like Princeton, Harvard and Yale. (Oscar Health was founded in the offices of Thrive.) For some money managers, even a loose connection to an incoming president could open doors that might otherwise be closed, but Mr. Kushner has told his investors that he is determined to avoid involvement in politics.
“Josh doesn’t want a public profile,” said Darren Walker, the president of the Ford Foundation, which is an investor in Thrive. “He assured us that he would remain focused on Thrive.”
So far, Mr. Kushner has largely succeeded in taking a different path from the rest of his family. While Jared and one of their sisters, Nicole, went into the family business, real estate, Joshua broke from that mold by founding technology start-ups and then getting into venture capital.
To date, money from Mr. Kushner’s immediate family members represents less than $5 million of his venture funds. Jared is now divesting his shares in Thrive because of his move into the White House. The Trump family has not invested.
That is not to say that Joshua Kushner is not close with his family. He is tight with his parents and two sisters, as well as with Jared (who is four years his senior) and with Ms. Trump, whom he refers to as his sister, not his in-law.
While the brothers are known by friends and colleagues as ambitious workaholics with ties to power brokers on both coasts, in many ways their paths have diverged. Jared Kushner has emerged as an increasingly public figure since becoming the face of the family’s real estate firm, Kushner Companies, and buying the publisher Observer Media. That company’s newspaper, The New York Observer, has mythologized the city’s media, real estate and political power brokers for a generation of New Yorkers. Jared is also often photographed at society events with Ms. Trump, and is now frequently seen in the background of meetings with the president-elect.
But Joshua Kushner has maintained a lower profile. While he has dated the model Karlie Kloss for four years, he is rarely seen out with her. He does not party or drink. Unlike most venture capitalists, Mr. Kushner also does not blog, and he posts to Twitter infrequently.
“Most moguls love to name-drop and tell you about their vacations and appeal to you with how celestial their orbit is, but that’s not Josh,” said Patrick Collison, the chief executive of Stripe, a mobile payments start-up in San Francisco that Mr. Kushner has invested in.
Mr. Kushner declined to speak on the record for this article, and a spokesman for Mr. Trump declined to comment. In an interview, Ms. Trump said that “Jared and Josh have a very special relationship defined by tremendous love, admiration and mutual respect.” She declined to talk about politics.
An Investor’s Roots
Joshua Kushner grew up in New Jersey, where his grandparents, Holocaust survivors who immigrated from Europe in 1949, had built apartments. Their properties turned into a $1 billion apartment development business under his father, Charles, who was sentenced to two years in prison in 2005 for making illegal campaign donations, witness tampering and tax evasion. Jared later expanded the family business and bought luxury office properties in Manhattan.
Mr. Kushner and his siblings grew up spending nights and weekends at work with their father, visiting properties, looking at financial data and sometimes skipping school to attend business meetings. In 2004, Mr. Kushner was accepted to Harvard, which Jared had also attended.
At Harvard, Mr. Kushner roomed with Alexander Blankfein, the son of the chief executive of Goldman Sachs, Lloyd Blankfein. His circle also included Alexander de Carvalho, an heir to the Heineken beer fortune. Mr. Kushner dipped into media when he became the executive editor of a short-lived society magazine for Harvard students called Scene, which was founded by the children of Citigroup and Lehman Brothers executives.
During the summers, Mr. Kushner interned at Goldman’s real estate banking division and at the real estate giants Vornado and SL Green with an eye toward working in the industry. But in his junior year of college, he started a company, Vostu, that made video games for social media networks like Facebook. He founded Vostu with two classmates, including Mario Schlosser, who is now the chief executive of Oscar Health.
Mr. Kushner graduated in 2008. The next year, he became a founder of a nonprofit start-up called Unithrive, which helped Harvard students secure loans from alumni.
“Josh stepped away from the family business,” said Ryan Williams, a Harvard classmate who now runs Cadre, a real estate start-up that lets wealthy individuals buy pieces of commercial property developments. The company was started in the offices of Thrive.
Neither Vostu nor Unithrive was a runaway success. Vostu has since laid off most of its employees, and Unithrive is defunct. So, using money generated from Vostu, Mr. Kushner turned away from founding businesses and began investing in them instead, beginning with small investments in companies like the crowdfunding site Kickstarter.
His investments caught the attention of others in the tech industry, including Joel Cutler, a venture capitalist at General Catalyst. “Josh had been able to get into investment pools with the best and smartest in the industry,” Mr. Cutler said. “I encouraged him to start a firm.”
In 2010, while at Harvard Business School, Mr. Kushner started Thrive. He was 25.
In an interview in 2011, while juggling business school with working at Vostu and meeting with start-ups, Mr. Kushner said his job as an investor was to look for new ideas that could change industries through technology. “Any market yet to be disrupted by modern technology will be at some point in time,” he said.
Mr. Kushner said that he would not be content to simply invest in companies, and that he wanted to nurture some from scratch himself. “Being satisfied is not a good thing,” he said.
Mr. Kushner set about building Thrive in a methodical way, drawing on his constellation of connections.
His mentors include Fred Wilson, a venture capitalist in New York best known for investing in Twitter, and Jon Winkelried, a co-chief executive of the private equity firm TPG. Mr. Kushner also befriended Twitter’s chief executive, Jack Dorsey. Peter Thiel, a member of Mr. Trump’s presidential team, a co-founder of PayPal and an early investor in Facebook, was also an early Thrive investor and supporter.
Aryeh Bourkoff, the founder of LionTree, a merchant bank that specializes in tech and media deals, said he was impressed by Mr. Kushner’s focus when the young investor spoke at an event Mr. Bourkoff held in 2011. Mr. Kushner argued before a roomful of media executives that online video would create more upheaval than the cable industry anticipated. Many in the room disagreed with that idea at the time but said he made a compelling case.
By the spring of 2012, Mr. Kushner had scored his first investment hit. He had become friends with a Silicon Valley entrepreneur named Kevin Systrom, who had started Instagram. Mr. Systrom said he had met Mr. Kushner long before he was thinking about raising large sums of money for the app, and the two had stayed in touch.
That year, Mr. Systrom let Mr. Kushner invest in Instagram alongside the prestigious venture capital firms Sequoia Capital and Greylock Partners, illustrating how much personal connections matter. The funding pegged Instagram’s valuation at $500 million. Three days later, Facebook bought Instagram for $1 billion and Mr. Kushner instantly doubled his money.
Mr. Systrom and Mr. Kushner have remained close. When the Instagram chief married at a Napa Valley winery in late 2015, Mr. Kushner attended with Ms. Kloss.
Mr. Kushner has developed a reputation among entrepreneurs for an eye for detail. When he was considering investing in Zola, a wedding registry company founded by Shan-Lyn Ma and Kevin Ryan, Mr. Kushner and his team put together their own study of the wedding registry market and what was missing.
“Most other investors I met with said that they’d asked their wives or girlfriends about whether they’d use Zola,” Ms. Ma said. “That was generally their only data point.”
Thrive led a $5.85 million investment in Zola in 2013. Since then, the company has raised more than $40 million.
Thrive’s other investment successes include Twitch, a live-streaming video site for gamers that Amazon.com bought for $970 million, and the e-commerce site Jet.com, which Walmart agreed to acquire for $3 billion. Thrive also owns stakes in hot start-ups like the workplace messaging company Slack and the streaming music service Spotify, each of which are valued at billions of dollars.
Not all of Mr. Kushner’s investments have worked out. It can take a decade or more to determine whether a private company becomes the next Facebook, a failure or something in between. While Instagram was a rare overnight success story for investors, Mr. Kushner has also invested in flops such as Fab.com, a high-profile online retail company that went bust and was later purchased by a manufacturing company in a fire sale.
Oscar Health, too, has not been a smooth ride. Even before Mr. Trump’s election and the uncertain state of the Affordable Care Act, the health insurance start-up had been criticized for its hundreds of millions of dollars in losses and executive departures.
The company has raised about $400 million at a $2.7 billion valuation, with investors including Goldman Sachs, multi-billionaire Li Ka-shing, and Ping An Insurance, a Chinese company with ties to former Prime Minister Wen Jiabao. Oscar Health has scaled back parts of its business, saying it will no longer sell insurance to individuals in Dallas and New Jersey. The company plans to sell insurance to corporations.
In November, Mr. Kushner took the unusual step of publicly defending Oscar Health by writing a blog post with the company’s chief executive, Mr. Schlosser. While they did not take a position on Mr. Trump’s criticisms of the Affordable Care Act, they said both political parties had failed to fix flaws in the health care law. They hoped a Republican Congress would do better, they added. No matter the outcome, they wrote, “we’re in this for the long haul.”
It is unclear if Joshua and Jared Kushner have discussed how a health care overhaul could affect Oscar Health. Representatives of the brothers declined to comment on any conversations they have had about the company.
Mr. Kushner’s work is not totally separate from his family’s. Thrive’s offices are in the NoLIta neighborhood of Manhattan, in the historic Puck Building, which is owned by Kushner Companies. Some start-ups that Thrive has incubated, including Cadre and Oscar, are housed there, too.
The brothers have also made investments together. They founded Cadre with Mr. Williams, invested in it and are advisers to the company.
A Neutral Stance
Even outside of work, Mr. Kushner is earnest about his pursuits. At his 30th birthday celebration in 2015 at the Brush Creek Ranch, a luxury dude ranch in Saratoga, Wyo., where rooms start at around $800 a night, Mr. Kushner talked about goals and values, attendees said.
Mr. Kushner has not been vocal about his political beliefs. Over the years, he has donated about $100,000 to Democratic candidates and causes. Federal Election Commission data shows he has been giving to the Democratic Party since 1999, when he financially supported Bill Bradley and, later, Al Gore for president. He made his last donations in 2014.
Over the 2016 presidential election cycle, Mr. Kushner kept quiet as his brother and Ms. Trump became some of Mr. Trump’s most powerful strategists and surrogates on the campaign trail. In August, Esquire reported that Joshua Kushner was a lifelong Democrat and would not vote for Mr. Trump. A spokesman for Mr. Kushner said he is a registered independent.
In November, Ms. Kloss posed in a photograph on Instagram voting for Hillary Clinton.
“People who are different from you, you can learn something from them,” Mr. Kushner said in the 2011 interview. “At least, I think I can.”