J2 Ventures, a Boston venture capital firm focused on technologies that could improve national security, has raised $150 million for its second investment fund.
Founded four years ago by Army veteran Alexander Herstrick and former Wall Street chemistry doctor Jonathan Bronson, J2 has backed startups such as MesaQuantum, a New Mexico-based company developing a location technology to replace GPS. Femtosense, a California-based company that equips smart devices with artificial intelligence, doesn’t invest in startups that develop guns, weapons or products that harm people.
“As the first venture capitalists observed and designed, working for the interests of the national security apparatus is the best way to scale world-changing companies,” Herstrick said. “Not only is innovation the best deterrent to conflict, but working for a higher purpose and protecting freedom is the best way for entrepreneurs to build value in any sector.”
Both men have unusual backgrounds in the VC industry.
Herstrick was a medical consultant and military intelligence officer in the Army Reserve who deployed to Afghanistan and Iraq in 2017. After returning home, he worked for the Secretary of Defense’s Defense Innovation Unit, trying to identify startups developing technology that would benefit the Pentagon.
Bronson received his PhD in Chemistry from Columbia University, where he focused on the application of computational machine learning techniques to molecular biology, and went on to serve as Chief Operating Officer of BetterPath, a medical records startup, and Director of Private Equity Investing at D.E. Shaw, a New York hedge fund.
The two first met about 15 years ago while working as paramedics. Herstrick was an undergraduate and Bronson a graduate student at Columbia University.
Unlike many in the venture capital industry who shy away from bureaucratic government agencies, Herstrick and Bronson want to back startups that work closely with the government and help companies access grants and other sources of public funding.
Bronson said the goal is to develop technology that has potential civilian applications as well as military and defense uses. “DoD money is behind every major technology development, from airplanes to computers,” he said.
Advisers to the company include retired Navy Vice Admiral Raquel Bono, who served as director of the Defense Health Agency, who said in a statement that the J2 is “providing our service members with best-in-class capabilities.”
J2’s $150 million second fund is more than double its initial $68 million fund in 2021, despite a tough fundraising environment. Venture capital firms are expected to raise $37 billion in the first half of 2024, the lowest annual fundraising level since 2019, according to a report from market research firm PitchBook and the National Venture Capital Association.
Investors in J2’s new fund include Wall Street bank JPMorgan, the New Mexico Investment Council and insurance companies. MetLife.
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow Ampressman.
