Richard Chan, Managing Partner at Berkeley Frontier Fund Richard Chan is a serial entrepreneur andRead more...
Belotserkovsky is also the founder of entrepreneurial startup hub Jews For Entrepreneurship
Venture capital used to be a cottage industry, with very few investing in tomorrow's products and services. Oh, how times have changed!
While there are more startups than ever, there's also more money chasing them. In this series, we look at the new (or relatively new) VCs in the early stages: seed and Series A.
But just who are these funds and venture capitalists that run them? What kinds of investments do they like making, and how do they see themselves in the VC landscape?
We're highlighting key members of the community to find out.
Belotserkovsky is an experienced innovation leader with a demonstrated history of scaling innovation hubs, as well as accelerating and investing in early stage startups. She has lived in San Francisco for 25 years and has been witnessing the exponential growth of startup innovation in the Bay Area. After completing UC Berkeley's undergraduate degree in Economics, she worked in Finance before transitioning to tech in 2009.
Right now she is running Jemm Ventures Accelerator, a healthcare and digital health focused startup accelerator program that helps startups navigate a very complex healthcare ecosystem by avoiding regulatory pitfalls and speeding up their path to market with the help of top experts.
VatorNews: What is your investment philosophy or methodology?
Jenny Belotserkovsky: My investment philosophy is like a sophisticated matchmaking process: the founders’ vision, values, and experience should match mine. Of course, it’s not as simple as it sounds. Our team needs to do vigorous research on the company, founders, and market.
We work with a group of phenomenal experts and consultants whose expertise I value. It’s a long methodological process which helps me to predict the growth of a company: if it’s a thriving entity that is able to navigate and grow in a very challenging ecosystem or not.
Jemm Ventures is an accelerator program and we’re focused on early stage digital health companies that have some really interesting technologies, specifically in the space of mobile health, software as a device, EHR, remote patient monitoring and health IT.
We worked with several digital health startups during those programs, but a lot of my healthcare expertise came from mentoring and consulting a couple of digital health companies since 2016, at which point I really got significant hands on experience scaling those healthcare companies.
VN: What are some of the verticals you like to invest in? Where do you see opportunity in healthcare?
JB: We feel that healthcare is really scaling up right now, a lot of great opportunities are opening up on the reimbursement side coming from CMS, which is the Centers for Medicare and Medical Services, and the whole industry is really being pushed towards integrating technology to make healthcare more efficient, make it predictive, make it stop diseases in their tracks before conditions really get bad for people and just use a lot of AI and predictive analytics to prevent the growth of chronic conditions.
One of the companies we’ve worked with is MenHealth, which is this application which, essentially, lets men self monitor their BPH and overall obstruction symptoms when they urinate. So, usually what would happen is a guy would have to go to his urologist or primary physician for a medical check up, which once or twice a year, but he would not proactively do anything about it until symptoms get really, really, really bad and additional procedures need to be done or he will have to take medication for it. This company lets men download an app which analyzes the sound of urine hitting the water, so it lets them self test themselves at home and send those results to the doctor if need be, but, for the most part, they can just monitor themselves and see how they’re doing. If they feel like there are changes, go to the doctor, if not then everything’s fine, but this prevents the acute symptoms of an enlarged prostate or prostate cancer from happening because there’s a preemptive mode of taking control of your health and doing it early.
VN: What's the big macro trend you're betting on?
JB: In the healthcare space, data is becoming extremely important because once patients have access to their phones and they can track their symptoms or they can input information or they can even answer how they feel or what progress they’ve made, that significantly adds to the knowledge of hospitals and physicians and medical companies about the state of their patients. Once you take everything remotely outside of the medical office, there’s just so much more to analyse, versus just the usual checkup or extreme emergency situation. So, I’m definitely looking at everything which has to do with remote-based diagnosis or interaction between patients and their healthcare data. Of course, we’re talking about HIPAA compliance and everything, so data that’s very secure and can only be shared between themselves and their medical provider or physician. Essentially, I’m looking at taking healthcare out of the office and putting it into the hands of the end user.
VN: What is the size of your current fund and how many investments do you typically make in a year?
JB: We’ve been doing small checks as an accelerator; right now we’re looking into a new model where we don’t take equity from the companies, which will enable us to work with startups that are larger in size, not necessarily pre-seed. One of the reasons for this is because we've noticed that a lot of medical companies and hospitals don't want to work with very early stage companies because they’re not capable of scaling, so we decided to not look at the equity component, we decided to just focus on finding great companies and scale our ecosystem.
VN: That’s interesting that you say they don’t want to work with early stage companies. So how do you scale a company to be bigger if nobody wants to work with them?
JB: We’re open to working with early stage startups as well, and what we offer is a group of really phenomenal experts who can help with reimbursement, monetization, fundraising, IP licensing, EHR integration, regulatory compliance, partnerships. So, we’re really focusing on the biz dev aspect, but we need to make sure that the company is ready to scale; if we help with the development we want to make sure that they’re in position to launch a pilot, they’re in position to build out the platform. Earlier than that, I think startups have to be super resourceful, and if they need to outsource their development or hire people part time, or hire people for equity who can work part time, that’s really important that they do that. There are ways to do that. They can scale but just like on the biz dev side, we need to make sure that they’re big enough to be in a position to close partnerships because the challenge is that a lot of them don't have any infrastructure to begin with or they’re at the very early stage, so it’s hard for us to help them.
VN: How much do you invest in companies?
JB: We’ve been investing $20,000 in each company. Right now, we set terms with each company on an individual basis.
VN: What kind of traction does a startup need for you to invest? Do you have any specific numbers?
JB: Ideally, if they have any regulatory approval, like from the FDA, that would be great but we understand that that’s something that we should be helping them with. If they have the tech infrastructure already that’s great, if they have an application which is connected to the cloud where you can see data of the patient, where primary physicians or medical companies can see patient data, that would be super helpful if they have it. If they’re comfortable integrating with EHR systems, like Epic or Allscripts, that’s a big plus. So, companies that at least have a product and a dashboard built, that’s something that we would look at.
VN: What other signals do you look for? Team, product, macro market?
JB: There should be a balance between the scientific innovation and business development capability on the team.
The size of the market depends on what specific problem the startup is targeting. For example, a startup focused on Healthcare IT can target any hospital. But if it targets a very specific problem that’s going to make the market very small. It’s also really important for startups to figure out who their target market is.
VN: Given that you have an accelerator model, do valuations matter to you? How do you see them trending for healthtech companies?
JB: Overall I’ve seen a tremendous trend in healthcare investing based on the research that has been coming out, especially with digital health, RPM, telehealth, and digital solutions, so there’s a huge opportunity right now and a lot of investments are going toward these sectors. So, I think valuation are pretty solid for healthcare companies.
It depends also if they have FDA approval, how far they are in their product development, if there’s a technology solution or if it’s a medical device. So, I think a lot of that makes a difference on how you would evaluate a startup. So, it really is a case by case evaluation that needs to be done. The healthcare and digital health sectors are highly lucrative right now, so it’s definitely propping valuations, and I see them trending higher.
VN: Do you have limited partners in your model? How do you differentiate yourself to them?
JB: We do. We are very specific and thorough in choosing our startups.
VN: Venture is a two-way street, where investors also have to pitch themselves. How do you differentiate your fund to entrepreneurs?
JB: What differentiates us is our big network, which we have built over the years across both the entrepreneurial and venture community. We’ve also built phenomenal connections in the healthcare space, so for our program we’re bringing people who have years of industry experience and significant connections, regulatory and security experience and IP experience. These are mentors who work for healthcare venture capital and they’re coming and helping startups with figuring out their fundraising strategy, and people who have serious insider knowledge from working for companies like Boston Scientific or Johnson & Johnson.
VN: What are some of the investments you’ve made that you're super excited about? Why did you want to invest in those companies?
JB: I am super excited about most of our investments because they are very passionate about their innovation and make an impact on the healthcare system. Though the system has been very difficult to break through, it has become more receptive to innovation.
For the program we’re interviewing a bunch of healthcare startups right now as well, so I’m seeing a lot of really great companies.
VN: What are some lessons you learned?
JB: I launched the Jews For Entrepreneurship organization in 2009 because at that point the recession hit really hard, and people were trying to figure out what to do with their careers. I was also in a limbo because I was in finance and finance seriously dried up; this was one of the worst recessions in our history and I was just a recent grad out of college. I think, to a large extent, people were a little lost and they were looking to take control of their career, and how do you do that? You start doing something on your own, and you stop depending on another employer to manage you. We started pushing people to start thinking of ideas, start being creative, start feeling confident that they can do something on their own. We wanted to give them confidence that they have the ability to launch something on their own, come up with ideas, find solutions from their previous experience. That’s how we launched JFE with the goal of giving people tools for how to launch, how to build something.
We had really phenomenal founders who came in to speak about their experience. For example, the founder of WhatsApp was one of our first JFE speakers, back in 2010; he was six months into WhatsApp and he gave a really awesome speech and presentation, talked about his experience. Going forward, I worked with a bunch of founders who later became serial entrepreneurs, went onto launch companies over and over again over the last 10 years.
The industry has grown huge, because 10 years ago, I felt like I knew everyone in the venture community. It was very niche and now its huge, and there are just so many more firms and so many more people and so many sectors. A lot of those sectors didn't exist back then. What I’m trying to say is people are disrupting way more industries than they used to back then. The other thing is you have to ride the wave when it’s right, because if you’re too early it’s not going to lift off, and I’ve seen that a lot.
VN: What excites you the most about your position as VC?
JB: The energy and fast paced environment and just connecting companies, scaling them, seeing how I can help them. Over the years, you just know exactly what they need and how you can help them.
VN: Is there anything else that you think I should know about you or the firm or your thoughts about the venture industry in general?
JB: I think the startup industry is the most thriving and fast growing sector of the economy. We’re the link that connects healthcare innovation to the established Healthcare industry.
Jemm Ventures is accepting applications for our Fall ‘19 program, which launches on October 15th. We encourage startups to apply.
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MenHealth® is the first mobile application that gives men opportunity for self assessment. It provides accurate urine flow measurement and enables men to be more aware of their medical conditions and to control them. Regular measurements enable men to monitor their condition and take care of it. This information helps their urologists to choose the best treatment plan for them.