Developing Healthcare Ventures
By CARA SANDERS
On Aug. 17, nearly 250 healthcare industry professionals gathered at the Westin Nashville to attend the "Developing Healthcare Ventures: Investor and Entrepreneur Collaboration" panel, an annual event put on by the Nashville Health Care Council and Nashville Capital Network (NCN.)
The panel, which featured two pairings of executives and investors in high-growth companies, provided insights on what makes partnerships successful in a rapidly changing climate. This year's panel included John Donahue, CEO of axialHealthcare, with investor Nancy Brown, a venture partner from Oak HC/FT, as well as Rob Metcalf, CEO of Concert Genetics, with board member Curt Thorne. Moderator Eric Johnson, dean of Vanderbilt University's Owen School of Management, led the panel.
Nashville-based axialHealthcare, founded in 2012, is a pain medication and pain care solutions company, which partners with health insurers nationwide. The company's solutions optimize pain care outcomes, improve financial performance for health benefit providers, and reduce opioid misuse. Last year, the company secured $16.5 million in funds from Oak HC/FT to grow its customer base and improve technologies to expand.
"I was an entrepreneur before I was an investor, and it is important for both perspectives to understand the long game and be on the same page with the overall goal," Brown said of crafting an effective working relationship.
Donahue concurred, imploring entrepreneurs to reach out to investors for guidance. "Emerging entrepreneurs should never be afraid to ask for anything but should always be humble and genuinely seek advice from their investors.," said Donahue, "Don't be afraid to ask for nonconventional investor assets, as well. Access to a network can open key doors."
Rob Metcalf shares insights. © 2017, Donn Jones
Brown and Donahue credit their partnership's success with a mutual understanding and respect of one another. "It's important to look for someone with a sincere and genuine commitment to the mission," explained Donahue. "If there isn't a clear and shared understanding for the future, there could be a problem." Brown agreed, adding, "We do healthcare deals that we actually want to do, no matter how big or how small."
Concert Genetics, which was founded in 2010, is a technology company specializing in streamlining genetic test selection, ordering, payment, and management for clinicians, hospitals, laboratories and health plans. The Franklin-based company has generated more than $9 million in funding in the last six years.
"My advice is to keep your awareness on the 'why,'" said Thorne. "Many times, entrepreneurs become enamored with their product and the world revolving around that product rather than the larger picture. We have a monumentally dysfunctional healthcare system, and there is a great opportunity to create real value with improving the healthcare of society."
"Working closely with investors to set the larger, overall mission for our company has been key," Metcalf said. "Thinking beyond the day-to-day work - about how we will make a larger impact on patients - it's fun to have a board that encourages that kind of vision."
Thorne added, "As long as you're doing something that matters, your risk is smaller for the long term."
All of the panelists agreed that relationships and open lines of communication are what make successful collaborations work in the first place. "Success in business is substantially about getting the right people in the right seats," said Thorne.
Metcalf added, "Regular communications and keeping them [stakeholders] informed is important. It's about setting a bigger mission for what you want to accomplish and receiving insight from the board."
In 2016, the Council and NCN released a comprehensive report on the local venture capital marketplace, which found more than $1.6 billion in venture capital funds had been invested into 300 different Nashville-based companies since 2005. Almost $1 billion of this capital was invested in healthcare companies. Venture capital investment in healthcare IT companies surpassed that of healthcare service companies in 2012 and now represents the largest share of venture capital in Nashville healthcare companies.
"NCN's focus is not only on helping entrepreneurs connect with investors but also on helping them strategically align with resources to ensure success," said Sid Chambless, executive director of NCN. "Today's discussion featured some important insights into the types of successful partnerships NCN strives to support."
"We are fortunate to have some of the world's greatest healthcare entrepreneurs right here in Nashville," said Council President Hayley Hovious. "As a catalyst for leadership and innovation, the Council is proud to spark new ideas around entrepreneurism by hosting discussions such as the one we heard today."
Bradley served as presenting sponsor of the program with LBMC and W Squared, now part of the LBMC family, as supporting partners.