J20 eyes major sophomore fund focused on ‘Zillennials’

J20 Ventures, a solo woman-led venture firm focused on companies developing products for ‘Zillennials,’ plans to begin raising its second fund as early as this fall, firm founder and managing director May Li told Venture Capital Journal.

Li founded J20 as a student entrepreneurship organization while studying English at Georgetown University, eventually formalizing its thesis and operations under the name J20 Ventures. She raised her first fund while at the 2016 G20 summit in China, collecting a total of $1 million from a number of Chinese private equity, venture capital and start-up founders.

Based in New York, J20 invests in companies serving the Gen Z and Millennial generations, with an emphasis on future of retail, healthcare and educational tech.

“I’m a very decisive person and like to be ahead of the curve,” she told VCJ. “If I see opportunities, I’m going to think of ways to maximize the potential. I saw these opportunities in my organization in college, and I just thought, ‘Why wait until I graduate?’”

Seven years later, Li plans to target $30 million-$50 million for her sophomore fund, and told VCJ that she will be committing $10 million of her profits to kickstart the vehicle. She said she focuses primarily on US-based companies but has a “side focus on emerging markets in Latin America and India.” Li declined to share the terms of the fund or any LPs she is in discussion with, but did share some of her early plans for its investments.

“I plan to capitalize on my pro-rata rights from Fund I,” she explained. “My first investment out of fund II might be the Series A expansion at Gainful.”

Gainful, a personalized supplement company, was one of Li’s first investments, alongside Vero, a real estate tech company; Burrow, a direct-to-consumer furniture company; and EdSights, an AI-driven educational technology company. Li completed all four investments while still in school, and all four companies were started by members or associates of her student entrepreneurs organization.

“I think J20 founders are truly a special breed and I really want to present them in the way that I saw them when I invested in them,” she told VCJ. “A lot of the companies I’ve backed are eventually backed by some top-tier firms, but I was one of the first checks in. I saw tremendous potential and the ability of the founder to deliver but also to create massive impact in society.”

Finding these companies at the earliest stages is no easy task, but Gainful chief executive Dean Kelly says Li is made for the challenge.

“May Li was literally one of our first-ever checks; she invested in Gainful whilst the founder was building the company out of his dorm at Georgetown,” Kelly told VCJ. “May is very good at identifying not only spaces and businesses very early and providing support throughout that business’s journey, but also the individuals that she looks to invest in, identifying them very early and helping support them. She’s very much a conviction-based investor rather than a lot of the firms that invest in 200 companies hoping one succeeds.”

Gainful has gone on to raise a total of more than $8 million from investors including AF Ventures, Soma Capital and Y Combinator, and plans to raise another Series A round in the near future. Kelly told VCJ that the company is “in conversations with [Li] to put additional capital to work.” (If the deal happens, it would be the third time J20 has invested in Gainful.)

Li also says her own background gives her an edge in the early-stage venture market.

“Being a female Gen Z investor, I feel like I can relate especially well with [the founders] because I’m also a minority within my industry,” she said. “I think the portfolio is a reflection of the investor. It’s easier for me to relate to underrepresented founders, and I’m really proud that I could support founders that didn’t have the classic pedigree that you would expect, and founders that have so much ambition, not only in terms of finance but also social impact.”