In the year following the acquisition of his Chicago-based startup, Braintree, Bryan Johnson found himself with some time on his hands.
But rather than try to replicate the success he’d already seen in the fintech industry, he set his focus elsewhere: using technology to make the world a better place.
“After the acquisition, I had the opportunity to choose to do whatever I wanted to do,” said Johnson. “The question that seemed relevant to me was, ‘What problem could I work on that would maximally increase the probability that the human race would thrive?’ The biggest problems in the world require a component of tool development from the hard sciences and there’s an insufficient amount of capital going there. I wanted to provide a solution for that.”
What problem could I work on that would maximally increase the probability that the human race would thrive?”
So, in 2014, Johnson and veteran investment manager Jeff Klunzinger launched OS Fund, a firm that would go on to invest more than $100 million in businesses utilizing deep tech to solve global problems in public health, economic stability and the environment. While neither partner possessed a traditional venture capital background, Klunzinger’s experience investing in a wide range of asset classes and Johnson’s background in technology ultimately led to the fund developing a winning approach.
“When Jeff and I first met, we immediately hit it off,” said Johnson. “We both cared about trying to fund the most consequential, deep tech technology in the world. Typically, when people think about science investing, they automatically conclude that it’s too much of a risk, takes too long and has binary outcomes. But in reality, we've created an investment thesis where we take technology-level risks in deep tech investing. These companies make money along the path to discovery, so we don't invest in a single molecule.”
Currently, the firm is raising $250 million for OS Fund II, a follow up to OS Fund I, which saw 27 of 28 portfolio companies receive follow-on investment. Today, four of its investments boast billion-dollar valuations, and two have been acquired.
According to Johnson, a goal of the new fund is to invest in tech leaders with a specific set of skills.
“Literacy — the ability to read and write — is a basic skill set of society. I'd say we need to acquire a new form of literacy: the ability to create models of an emerging future,” said Johnson. “When we approach a potential investment, I want to see the entrepreneur's ability to identify the right product-market fit, the ability to build tools for future needs, and the hardiness to weather the journey as a founder, which is a tough one.”
But Johnson’s dedication to building technology to improve the world doesn’t stop with OS Funds I and II. He’s also leading a team of techies and scientists as the founder of Kernel, a Venice-based startup using science and technology to build neural interfaces designed to fight mental illness.
Founded in 2016, the company is researching how the brain operates. The hope is that devices can one day be implanted in the organ to improve how it works. While the team — which received a $100 million investment from Johnson the year it was founded — is focused on medical applications, ultimately the goal is to use technology and science to improve human intelligence.
According to Johnson, his experience with OS Fund is making a big impact on how he leads Kernel.
“Before OS Fund, I was only on one side of the equation: the founder side,” he said. “Now, being on the investor side, I find that I learn important lessons much faster because I can cycle through case studies in decision making in multiple industries at a much more rapid rate. I can basically experience building a company 20 times at the same time because I’m dealing with all these founders and their various issues. It gives me a depth of experience I couldn’t do if I was solely a founder.”
While still actively fundraising, OS Fund II has already pre-invested $23.7 million — nearly 10 percent of the fund — in 12 companies.
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