A brand new enterprise capital agency named HC9 Ventures launched on Monday and introduced the shut of its first fund. The corporate is led by three founders — healthcare trade veterans Richard Lungen, Jon Gordon and Charlie Falcone. These three gents can even function common companions for the $83 million fund.
“Our complete profession has been in healthcare — beginning, working and constructing companies,” Lungen mentioned in an interview.
The enterprise fund’s healthcare experience stretches past its founders, although — it’s additionally pervasive amongst its huge base of restricted companions. The fund’s greater than 125 buyers are “deliberately and solely healthcare executives,” in response to Lungen. They arrive from all kinds of healthcare firm backgrounds — he named people from UnitedHealth, Aetna, Cigna, LabCorp and personal fairness healthcare service corporations.
When choosing which corporations to spend money on, HC9 will concentrate on startups elevating seed and Sequence A capital. The fund’s restricted companions have an unlimited vary of healthcare enterprise data, which they’ve supplied as much as assist these early-stage corporations scale their go-to-market technique and stand out from opponents, Gordon mentioned.
As for the kinds of corporations HC9 will spend money on, the fund is focused on healthcare software program and providers.
“We don’t do gadgets, prescribed drugs or something with binary scientific threat. That’s exterior the scope of what we’re doing right here,” Gordon declared. “Equally, by way of the philosophy of corporations we wish to work with, we wish to interact founders who’re actually focused on having a accomplice and dealing with us on constructing their enterprise. Our perception is that capital continues to be accessible in loads of locations throughout this market. And if you need an investor who’s simply going to be quiet, we’re not going to be a price add from that standpoint.”
Lungen echoed his fellow common accomplice’s remarks. He mentioned that whereas there’s no scarcity of capital for healthcare startups, there may be an “excessive scarcity within the experience and expertise that these early stage founders and CEOs are in search of.”
Expertise like structuring reimbursement, constructing firm tradition, sustaining operational excellence and mastering distribution aren’t essentially taught in enterprise faculty, however they’re important if you wish to construct a scalable healthcare startup, in response to Lungen.
To him, HC9’s “capability to be engaged and energetic” differentiates it from different healthcare-focused enterprise funds.
“We’re actually serving to portfolio corporations not simply by deploying capital and being yet one more identify in a press launch. We actually wish to be within the boardroom working with groups, serving to with all facets of their development. To not be provocative, however we consider that the enterprise capital neighborhood has let their portfolio corporations down at giant by not doing the issues that the CEOs and their groups have actually wanted, which is to be a price add accomplice,” Lungen mentioned.
HC9 has already invested in three corporations: Forge Well being, a supplier of psychological well being and substance use care; Psych Hub, which has billed itself as “Angie’s Listing meets Match.com for psychological well being care;” and XP Well being, a imaginative and prescient care platform.
Going ahead, HC9 will proceed to spend money on corporations that may show they’re extra than simply level options. Lungen identified that there are plenty of “capabilities masquerading as corporations” — he identified that suppliers and well being plans are battling level resolution fatigue increasingly more every day.
Over the subsequent two years, the fund plans to spend money on 10 to 12 corporations, the final companions mentioned.
Picture: HC9 Ventures