I am a Health Care VC.  Here’s how I picked the investment.

I am a Health Care VC. Here’s how I picked the investment.

This so-called essay is based on a conversation Heather HartnetCEO and management partner Enterprise-Capital Fund Human Ventures. It has been edited for length and clarity.

Coming from a family of entrepreneurs took me to my first job outside of college as an analyst at an early-stage venture-capital firm in the Bay Area. Feeling a deep sense of responsibility to make a difference in the world, I then became a philanthropist, working with some of the largest family philanthropists in the world. In 2013, I found myself at Impact-Investment Fund City Light Capital in New York City, where I fell in love with the mission-driven founder and emerging New York technology ecosystem.

Working in charity and building an organization from the ground up was a powerful lesson in fundraising, a skill that has helped me establish my own enterprise firm.

Our firm was born out of the need to finance the companies that were operating

I met in 2010 with my current business partner, Joe Marchis, the Summit Series, an ecosystem for builders, manufacturers and entrepreneurs. We have linked to the thesis that emotional intelligence is one of the most underestimated qualities of business – especially in technology. We care about working with and supporting “good people”. If we used that phrase to introduce someone, someone else would have to go to the meeting.

When Joe sold his last company to Fox in 2015, he went to work for James Murdoch, but he was my first supporter to start Human Ventures. He has since joined Manabe full time. Joe and I met Michael Letter through Charity: Water founder Scott Harrison, who is now our COO. As its CFO, Michael has helped build Charity: Water as a world-class organization, raising more than $ 640 million to help solve the world’s water crisis.

We launched Human Ventures in 2015. Joe and I both had large networks, so we exploited our relationships within each ecosystem to raise funds for our fundraiser. Our biggest selling point to investors was to create a firm that represents the next generation of VCs. We started with platforms for founders and then raised funds. Most other VCs start with funds and try to build a platform in advance. The founders already know how to come to us because we do Zero-to-One very well.

We invest in what we call “the economy that people need.” Health and wellness is obviously a big area in this focus, the way we work, where we spend our time and attention and how we connect as a community. The firm now has 65 portfolio companies, including Unicorn Headspace, a


Meditation

App, and current, a


Mobile banking

The company, as well as Philanthropy tech platform Groundswell, women’s healthcare startup Tia Health and newsletter and media company The Scheme.

We capitalized on 40 entrepreneurs living in 2020 and 2021, of whom 46% were self-identified minorities. Also, we recently brought in world-renowned relationship expert and psychotherapist Esther Perel to advise the founders on our fund and we are working on some projects to help the founders navigate the interpersonal dynamics between the co-founders and the team.

We ask 3 questions when evaluating specific investment opportunities

The first is: Who is the founder or founder of the team?

In the early stages, you are investing in people. The product or concept will change several times before it fits into the product-market.

Groundswell, one of our cobilds and core investments since last year, founded by Jack Wood, is a great example. We’ve known Jack for years and seen him create his nonprofit, Tim Rubicon – on Joe’s board – from a small group of veterans who helped raise hundreds of millions of dollars in the wake of the 2010 earthquake in Haiti. We told Jack that as soon as he was ready to make something for profit, we wanted to support him. Last year, Groundswell closed $ 15 million in funding led by GV (formerly Google Ventures) and two months after launching its beta, it has reached close to $ 1 million in pledges pledged on its platform.

The second question we ask: is the market big enough?

An example of this is in the field of women’s healthcare. Investors did not see it as a large enough market opportunity because it serves a subset of the population. As it turns out, this is a fairly large subset of the population. Tia Health started out as a simple chatbot capable of asking questions for young women


Birth control

– Apparently very niche. However, as the founders began to see an overwhelming need from customers for more in-depth service, they created a complete health clinic that now covers everything from fertility to menopause.

Health expenditure is about 20% of GDP. U.S. health care spending is expected to grow at an average rate of about 6% per year over the next decade, rising from 3.5 3.5 trillion in 2017 to 6 6 trillion by 2027. There are a number of areas in healthcare that have been under-invested and still not technology-capable. We want to invest in a market where you can see a company grow into a 10 billion business.

The third question is: What value can Human Venture add to startups? Our founders ’portfolios are able to take advantage of each other’s education, best practices, relationships, and often the customer population, and we evaluate whether our extensive network can quickly move the needle for the companies we invest in.

Our most recent investment was in the Adelaide Metrics, an advertising-technology company that focuses on accurately measuring consumer attention. We’re really excited about Adelaide because by pioneering a good way to measure attention, we can start to value it properly. This has huge implications for consumers, but also for our early stage founders who need a more efficient way to reach customers. The biggest cost for many of our companies is customer acquisitions. If we can eliminate any wasted costs here, our companies are immediately more valuable.

One of the areas I’m most excited about is the telehealth and digital-care model infrastructure.

Virtual-care adoption during epidemics has been accelerated and standardization opportunities are now appearing. It is important to share secure data and give patients more autonomy over their data.

Digital-health organizations are faced with buying off-the-shelf products or making them at home. I’m interested in white-label solutions that can accelerate a company’s product or service offerings.

Other areas I am interested in are alternative broker options, or more effective arrangements for employees to access individual healthcare facilities; Healthcare underwriting and innovative ways of financing; And mental health and sexual well-being are still extremely scandalous fields, both of which are very large markets with fragmented solutions.

Digital healthcare is still at the beginning of its life cycle: I compare where Fintech was six to 10 years ago.

In this place I really appreciate one investor who is Shawn Dullan of Virtual VC. He is a pre-seed investor investing only in health technology. He has a firm conviction and he has participated in some great deals. Wheel (B2B software that provides clinicians with what they need to deliver virtual care) and Monument Health (a digital mental-health provider for university students) are two organizations I really like and have seen too late to invest in their lifecycles, but They are the subject of observation.

I am sometimes asked if the venture capital is due to slowdown

Our view is that the early-stage market is relatively resistant to the major macroeconomic forces that will affect our asset class over the next five years. The story of rising inflation and interest rates makes it even more important to continue working with founders who focus on practical and fundamental issues.

Opportunity is born out of crisis. We believe that pre-seed and seed-level investments tend to be the best place to set up venture capital when uncertainty arises.

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