Jonathan D. Fox - Founder & Managing Partner @ Z2

Welcome to another VC Wisdom Pod. We have Jonathan D. Fox with us. He's the founder and managing partner at Z2. He's into value creation and GTM for elite funds. He's part of the US-Israel tech corridors, a 2x founder up in New York. John, welcome to the pod. Tell us a bit more about yourself and what you've been up to.

Hey, Charles. Thanks for having me on the show. I've been watching your stuff for quite a while, and I think you're doing an amazing Happy to get into things.

Yeah, how did you get into Z2? Maybe you can start with that.

I never know really where to begin. If it's to begin when I was 12 and I moved to Israel. Yeah, that's a good one. I moved to— I was born and raised in Manhattan on the Upper East Side, attended private school there. And then moved to Tel Aviv and began public school right away with Israelis from all over. And so it was a mix for me of charm and chutzpah, New York charm and chutzpah, and Israeli charm and chutzpah meeting and colliding. And so I called my company Z2 because I started my career here at the age of 12. at Zaynstein, it's the 7th letter in the Hebrew alphabet, so it was 7th grade, and still to today connecting American abilities and Israeli abilities across both geos, working with investors on both sides, working with tech founders on both sides, working with startups on both sides, It's been a wild ride. Well, we've been doing it since 2018, so we've gone through the October 7th attacks, we've gone through AI, we've gone through many bumpy roads and, you know, big waves, but we're still here and we're very optimistic and bullish on tech in general and on the US and Israeli markets specifically.

How was your time in Israel? I think you've been in the army as well because it's mandatory there. Like, what did that teach you?

Um, yes, so I was drafted by an elite intelligence unit in charge of doing research and then presenting the Prime Minister, the, uh, the Defense Minister, um, the Chief of Staff, etc., uh, on, uh, what was going on, the daily briefs, and, uh, pretty Putting that research to work, so I went to a course in the School of Intelligence and then served my full duty and then reserve duty as well. Many of us do reserve duty as well for many years.

When did you actually immigrate to America, and how was that experience?

I didn't immigrate to America. I was born and raised in New York.

Oh, interesting.

I immigrated to Tel Aviv. Yeah, well, we go back and forth, uh, tons of family and friends and work in both, uh, both countries.

Okay, and up to launching Z2, you were director of biz dev and strategic development project manager. What led you to start your own company?

Um, growing up, uh, first thing I wanted to be was a player on the Yankees. I wanted to be second baseman for the Yankees. But if that wouldn't work out, I always wanted to go into business. Both my grandfathers on both sides were founders and had their own businesses. My father was a businessman and founder and still to this day manages his business. So I always wanted to have my own outfit. I always knew that I would be best, my best Working with a team, leveraging their abilities with my abilities, leveraging my abilities with theirs. I never knew exactly what it would be, but I always knew it would be something.

Okay, and then you launched Z2, like the thesis was sort of a bridge between America and Israel. How's been that thesis? You've been at it since 9 years. Has it exploded? Has it been, you know, challenging in the times of the 7th of October, for example? So tell me about that wild ride, that roller coaster.

Anybody who's founded a company, anybody who's even started a group chat knows that you start out with one intention and one plan. And as Mike Tyson once said, everybody has a plan until they get punch in the mouth. Um, so you set out with best intentions. Uh, what led me to, uh, begin Z2, to, uh, offer, uh, my services and my company's services and solutions, uh, to funds and to investors, um, was an exposure I had to investing, uh, as an angel investor, uh, in different startups. Uh, I was involved at an early stage chat app based out of London, cooperated with Roman Abramovich's Chelsea FC. So we were going to games and we were doing partnerships and we're meeting advertisers and investors and pitching angel investors and different media investors, family offices, different VCs. Um, and so looking at startups as an investor and then being involved as a founder and a builder and an operator in a startup and then being on the sell side, uh, trying to raise capital for that, um, I was enamored with, uh, the other side of the table, the investor side. And I kept saying, um, you know, this is great and I love every morning and I'm happy to work on my weekends, I'm happy to work my nights and days off, um, but, um, if this doesn't work out, I want to go back to the buy side and I want to be involved at meeting smart founders and meeting smart companies, uh, and, uh, and looking at it from that side of the table, um, and so when the startup didn't work out, um, I started Z2 by offering marketing and business development services and solutions, uh, to do investors and high net worth individuals and funds.

Okay, and the model of Z2, you partner up with like startups and/or with, uh, Funds, for example? Is it a monthly fee that you charge? Like, what's the business model here?

Um, it's a triangle. It's, uh, equity, it's, uh, success carry, and, uh, and then, uh, obviously, uh, retainer.

How do you get your clients? Uh, what's your go-to-market approach?

Um, we've been doing this for many years, and so, uh, word of mouth is the best thing. Um, I don't need at any given time, uh, more than 5 to 10 clients. We have a core team of 4 people, advisory board of another 4 people, and then a very wide bench of professionals we've been working with for a long time who are operators in their own right. And so we can fluctuate between, you know, higher ticket clients, we would call it, versus, you know, a shorter sprint, a 90-day project with a specific pain that we're solving for one of our clients.

Right, and you said that any given time you don't need more than 5 clients. Why cap yourself at 5 clients? Can't you scale to higher levels?

Sure, 100% I can, but it's important for me to be playing with my dog at the park at 6 AM and doing yoga at 7 and putting my kid in kindergarten at 8. So, um, work-life balance is important. Um, I don't think I'd enjoy myself if I wasn't enjoying myself. Um, and so I know how much I need to have a very comfortable life. I have a personal trainer and a therapist, and we eat well and live well. Um, so I don't need to go to 100. I don't need to be a McKinsey or a Bain and, uh, and manage a team of 30 people and have a board of 12 people. I don't need that.

But what if you have agents running stuff for you, which is like the age of endless possibilities we're in right now? You don't need like more stress to scale operations. Even if you get more clients, you can have agents run the show and satisfy them better, if not equally, than your current systems. Have you been leveraging some of that?

Sure, 100%. We work with a few platforms. and a few solutions. But at the end of the day, I grew up in intelligence and trust, authenticity, integrity, and human connection are the core. And so that's ideal to me and ideal to the business I created. So I do try to keep a personal touch and personal relationships as much as possible. I'm happy to have lunch with my clients. I'm happy Uh, to hop on WhatsApp with them on the weekend or at night or whatever. I'm happy to hop on a plane if needed. Um, it really needs to be hands-on for me, and I need to feel a human connection. I need to feel that the trust is there both ways. Um, mistakes happen. Uh, sometimes you're not going to deliver 120%, and so the relationship needs to be there. And if the trust is there and the confidence-building measures are there Um, it's sustainable. Um, that's how I see it. So I don't let agents reach out. Uh, yesterday I got a very, uh, random— but it's been happening the last 2 years— message on LinkedIn. Hey, I see that you invest in protein bars. Would you please, uh, help consult my startup? And I wrote, uh, here's some free advice: I have never invested in protein bars. Spray and pray is over. I don't believe in spray and pray. I think founders that rely only on agents to do all of the work and all of the management of clients' expectations are doing themselves and their clients a disservice. I don't think AI is at that level yet. I work with AI every day. My team works with AI every day. I think the future is going there, but I think at the end, as they say, you know, AI won't replace humans. Humans who work with AI will replace humans.

Interesting. Yeah, I've been doing outreach for quite some time. I mean, the capabilities of AI are super advanced nowadays and they don't hallucinate like pretty much all the time. They hallucinate way less than common humans, right? So I'm not sure what software this guy was using, but yeah, I'm using Claude Code on a daily basis. I guess Claude Code is the center of pretty much everything nowadays and It's hard to mess up something, but yeah, it's pretty funny, right? It's like, uh, signal

you're writing somebody on LinkedIn. You put in the time, you look them up, you did it. At least make sure that one hook is a hook.

Hey, I love that you invest in, uh, in tea companies. Or it's like, yeah, it's like a mess up from the get-go, right? It's very clumsy. And also it's like your first contact with that human, like no intro cold. So Yeah, it's a classic, like, you look silly type of format. Talking about GTM, um, how— what pain points do VCs and family offices have? Why do they go to you?

Um, it's not just my, uh, green eyes. Um, I think we've been doing this for quite a while. I think we have an excellent reputation. I think, uh, our portfolio of clients speaks for themselves. A small firm working with clients managing over $10 billion speaks for itself, I think. Um, and, uh, usually it's, uh, either we come in on research, uh, or we come in on strategy, and then we build a relationship, and from there we can expand into, uh, into other fields. It could be, uh, thought leadership, uh, content creation, various aspects. Uh, different assets that they might need. Um, you know, sometimes somebody might reach out and say, yeah, we need help with a website. And then it's like, okay, so what do you need? And they're like, well, we don't know what to say. You know, our website is 4 years old, we're not doing this anymore, we'd like to be doing that, but our competition is doing this, and my CMO is saying this, my investors are saying do this, and we just don't know. And you have to do the research, you have to talk to the key, uh, players on the, on the team and on the board and then the investment side. Um, you need to speak to clients past and present and future, and you really have to understand what the strategy is going to be for that website, for the company, and where that's going. So it's not a website. Um, if in the past, uh, people would pay for, uh, investor pitch deck or something to that extent, nobody's doing that anymore. Everybody is using Claude Design and all the other tools that are available. So the business has really shifted to human connections, and I think that's where our strength— strengths lie.

Got it. And do you focus mostly on investor relations nowadays or content and stuff like that? As I'm looking at your LinkedIn LP communication, or do you do mostly go-to-market? Like, what's the main thing?

The main thing is representing a few key investors on deal flow and representing a few portfolio companies on go-to-market.

Okay, got it. And what has been your top 3 goals for this year? What's your main KPIs as the main managing partner?

Um, to be honest, uh, this year, uh, we're really focused on, um, next year's plan. Next year we're looking to roll out a fund of funds. We're bullish on venture capital as an asset class. Um, I think that with AI, um, you know, these funds, um, that have 20, 30 people on them, I don't know that that's necessary going, uh, down the line, 3, 5 years down the line. So I think managers that know to do distribution, managers that know how to choose a winning founder, and I think a few other attributes that we could look at, I think that would be a very interesting asset class. And so I'd like to, in the future— I'm not soliciting or anything at the moment, of course— but in the future, we do plan to roll out a fund of funds. You're on mute, Charles, I think.

Fund of funds is interesting. Why, why that model? Do you feel it's just like less, less risky than just starting your own fund?

It is starting my own fund, but it's starting a fund that would invest in other funds.

Yeah, but I mean like a classic fund, which is to directly invest into startups. Is it a risk minimization mechanism?

Uh, I've been working with investors, um, venture capital funds specifically, for, you know, going on 10 years soon. Um, so I believe I'm an expert on venture capital funds as an asset class. Um, I believe I understand the technology. I believe I understand the business. Um, and I believe there's a case to be made for excellent emerging, uh, fund managers.

Okay. Um, how will you select the best performing funds? What will be your, your mechanism there?

Are we going, are we going into business together, Charles?

Maybe. Who knows?

All right. This podcast just got much more interesting.

All right. So how will you select the funds? By the way, I'm not even thinking about my fund. I'm thinking because I'd love to have a fund of funds as well myself one day. Right.

So why would you love to have a fund of funds?

What I love about it, risk minimization. So it's like, but like I have another devil on my shoulder that says, yeah, but that would be like less returns, right? So that would be the less risky part of my portfolio. I love also that I would be able to build relationship with fund managers at scale, but I'm already doing that with the podcast, right? Yeah. But and yet it would also force me to really dissect a bunch of funds and that act in itself would make me— would have my personal fund perform better. So that's what I like about it.

So I agree with you on a few aspects and I think there's much to talk about on this. I think, first of all, you can reduce, uh, risk, uh, by investing in the fund managers, uh, themselves, uh, rather than in, uh, in their portfolio, or even, uh, directly in specific cases, uh, via secondaries or direct investments into, uh, into tech companies. Um, I think, um, there are a few ways to reduce risk, and, um, one of the easiest would just be to, uh, Disperse the fund over 3 different vintage years. Um, so I think there are a few interesting ways to do it. I think it's very interesting to look at fund managers, Fund 1, Fund 2, because Fund 3 and 4 and, and so on, you know, can raise from, you know, larger partners and enterprises, etc. So I think there's a very interesting case to be made and Uh, I think it's, uh, it's something we could discuss, uh, off the record first and maybe then discuss it on camera.

Got it. So thanks for coming on, John. Where can, uh, people find out more about you?

Um, my, uh, my LinkedIn, my email, my website.

All right, so that would be z2vc.com. That was John and Charles for another