Meet Tara Bishop and Eileen Tanghal, the founders of Black Opal Ventures

The fund focuses on the collision of healthcare and technology

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.

Tara Bishop and Eileen Tanghal are the founders of Black Opal Ventures.

With two decades in the healthcare industry, Dr. Bishop combines her medical expertise with extensive experience in healthcare leadership, digital health, clinical practice, and start-ups. Her previous roles include Chief Clinical Officer at Surest (formerly Bind Benefits), Medical Director for McKinsey & Co, and Associate Professor of Health Policy at Weill Cornell Medical College, among others.

Tanghal is a venture capitalist with 20 years of experience investing in more than forty early-to-late-stage companies globally. Most recently, she was a Senior Partner at In-Q-Tel. Prior to that, she served as VP of New Business Ventures of Arm and led the venture capital arm of Applied Materials. She began her career in venture capital two decades ago as part of the investment teams at Kennet Partners and Amadeus Capital Partners. Prior to entering venture capital, she was an early employee of a successful venture capital backed startup company, now public, called PDF Solutions.

VatorNews: Let’s start by hearing a little bit about your backgrounds, about the formation of Black Opal, and what your philosophy is, your methodology, and where you fit into the ecosystem.

Tara Bishop: Eileen and I actually met 30 years ago when we were undergraduates at MIT. We were both engineering students in the mid 1990s, and had coursework together, did philanthropic work together, and have stayed very close friends and confidants throughout our careers and our lives since we were in college. Eileen and I come from two different areas in healthcare and tech and VC, but that's very much intentional because the fund is actually very focused on the collision of healthcare and technology. And so, we look for companies that either develop or utilize highly innovative technology, but are solving real world problems and customer needs in healthcare.

I come from a healthcare background: I've had a 20 year career in healthcare, I'm a physician who practiced in New York City for all of my career. The first portion of my career was academic medicine, I was a professor at Cornell Medical School and then moved over to the private sector. I was the medical director at McKinsey, and then was the Chief Clinical Officer at a startup health insurance company called Bind, which is now rebranded to Surest and is part of UnitedHealth Group. 

We launched the fund in 2022, with our first close with Eli Lilly, our anchor investor. We have been holding rolling closes since that time and we are now at $58 million, and still have some capacity to take more capital in through the end of the year, but are actively investing in this space along this thesis of the collision of healthcare and technology. 

ET: As you heard, I went to MIT with Tara. I studied electrical engineering and computer science and after that I went to the Valley and was an early engineering team member of a successful VC-backed startup. After that, I went to business school and eventually became a venture capitalist; I initially was going to be a product manager and then saw venture capital as a way of not just being a product manager conducting business for one company, but for many companies. I’ve been a VC since 2002, so 21 years, probably one of the few female investors that have had that two decades of experience in venture capital.

I’ve had three phases of my career: first as a financial VC, then a VC leading the venture capital arm for Applied Materials, and then also at ARM. And then, finally, for the last six or seven years I was with In-Q-Tel, the venture capital partner for the CIA, NSA, and the larger defensive intelligence industry. While I was at In-Q-Tel, about four years ago Tara and I and a number of our MIT classmates got together and we were talking about a lot of the tech in which I was investing. Tara, as you can see from her background, along with these other women, classmates of mine from MIT, are all executives and leaders in healthcare and life sciences. In terms of what we are investing in at In-Q-Tel, it was, effectively, for the surveillance economy, but also for the security of all of us. And so, it involved tech for collecting data and analyzing, interrogating our data, and then using it to make decisions for policymakers. It turned out that almost all the companies in which I was investing were completely relevant to the healthcare and life sciences industry but those entrepreneurs did not have the networks or the knowledge of how to get into healthcare. It's a very complicated system, you have to understand the whole way to market and also really what the true needs are. Not tech for tech’s sake, but what are the real problems that need to be solved? 

At the same time, there's legislation coming down the pike about the need for more diversity within the boards of these companies that are going public. So, being an engineer, I like to solve hard problems and I said, ‘Okay, well, these companies need to go into healthcare andlife sciences, and they do not have the female representation that they should have. I have a group of very well accomplished MIT classmates in life sciences and healthcare, I'm going to bring them over into this world of predominantly male, tech VC investors.’ That's what we did, we bridged them. We started with our own money doing seed investments at this collision of tech and healthcare and then that evolved into what you see today, with our anchor investor, Eli Lilly, really encouraging us to take this from our own money to an institutional-backed venture capital fund, and not a side gig but our main thing. Of course, we've been really privileged to have had them start with us and then have a number of other institutional investors come in, and really back this thesis of, ‘let's bring tech from the surveillance economy into the healthcare industry to really improve access, equity, healthcare for everyone, while also improving the diversity in the venture ecosystem.’ 

VN: We're very healthcare focused at Vator, we've been writing about this space almost exclusively for the last five or six years. Obviously, during the pandemic, we saw a lot of the rise of virtual care and telemedicine because people couldn't go into the doctor's office, and so that was the big thing for those three years. That seems to have died down a little bit now that COVID isn't really a thing, and we're seeing other spaces, like value-based care, becoming bigger. Where are you seeing the opportunities now? Where are you specifically investing?

TB: Having worked and lived in healthcare for so long, there have been some key moments in the healthcare ecosystem that have been very transformative for the industry. COVID was one of them, where we went almost overnight from all this in-person care to virtual to now settling in on a lower level, but still existence and acceptance, of virtual care. There's a number of trends that we see in the industry that are shaping change, and a few areas where we see opportunities to solve big problems. If you think about the big problems in healthcare, they are things like cost of care, access to care, health inequities, quality and safety, and diseases that are still untreated and unmanageable. We look at companies that are addressing all of those problems, whether it's through a solution like value-based care or remote monitoring or virtual care. We also think about the big conditions that happen in healthcare, like cardiovascular disease, diabetes, cancer, women's health, where we know there's opportunity, we know there are still problems in all of these areas. So, coupled with that, we've started to understand the opportunity set that we want to address and where we think companies have big opportunities. 

We take an approach to thinking about the opportunities along what we call a ‘four D’ focus. The first Ds are focused on the patient journey and what's typical in healthcare. So, diagnosis and prevention: what is a technology that is going to help us diagnose and prevent illness earlier, more effectively, more efficiently? Then there's the delivery of care: how do we deliver or care differently that actually can make care more accessible, less costly, lower administrative burden of care? The third is around getting the right drugs and therapeutics to the right patient at the right time. That may go all the way back to how we discover drugs and therapeutics in a faster, more efficient way than we do now. And then the fourth fourth area is a thesis around the value of data and AI and healthcare. We have a strong thesis on that, and know that if we can actually unlock the potential of data, we can get better health outcomes and better healthcare. So, we invest in companies that are actually building the infrastructure layer around the value of data and healthcare. 

What's interesting is you mentioned trends that are happening in the healthcare ecosystem. You're right, value-based care is a big trend, consumerism in healthcare, and a growing and aging population are important drivers in healthcare. What's also interesting is what's driving things from the tech side of things. Eileen has been investing in areas in this space for decades and we're seeing massive changes happening in tech that are also going to drive and change the healthcare ecosystem.

ET: When we say what we invest in, we say that we invest in four Ds, underpinned by two Cs and an A. If you look back in terms of when things really change in an industry, they're often coupled with changes in compute, productivity, and analytics or AI. If you look back, we started with mainframe computing and then moved to PC and then, over the last decade, went to the cloud. You can see all of these things have changed every industry and we're about to move into edge computing, where, because of their miniaturization of electronics and more power at your fingertips, we’re going to have the ability to take one of these very heavy AI models being run in the cloud onto your edge device, which is going to provide doctors with a completely novel way of both monitoring and potential treating your patients. This is evidenced, for example, in one of our portfolio companies called Empatica. So, you have this move to the edge on the compute side. 

Similarly, industrial revolutions change when productivity changes. So, when we started at MIT, we were at GPRS for 2G, and then it went to 3G, then 4G, and then 5G; the rise of the mobile internet happened because of that transition to 3G and now we're about to go from 5G to 6G and we're going to have a lot more devices online, true IoT, as they call it. Again, this is going to change the way that doctors have the ability to monitor and treat their patients with the advent of ambient compute and ambient productivity. And then, finally, we're at the very beginnings of AI. Again, when Tara and I were at MIT, we were one of the first people to use the mosaic internet browser. If you can think back then, what were people doing with the World Wide Web? At most, you were maybe making your own page and maybe you were  talking to your friends. Now, today, Amazon owns Whole Foods. How did that happen? Back in 2000, you were still buying a book from Barnes and Noble, there was no Amazon and there was a big crash in 2000 as well, not dissimilar to what happened in digital health. So, we have already seen this happen. And yes, there was hype, and yes, you're seeing a downturn, but it is not that these technical trends are going away, they're just starting and so we will see a transformation. I have had the privilege of seeing these companies, of course, because of where I worked before Black Opal, and the whole point was, ‘this is going to come and affect every industry, let's make sure it really helps the healthcare industry in a way that is equitable, accessible, and helps these companies go mainstream.’ And that is the purpose of Black Opal. 

I'll just add one more point here, which is, unfortunately, a lot of the tech that was first developed had a lot of bias in it, meaning not everybody was going to benefit equally from the changes in technology. While it’s maybe okay that your camera doesn’t open up if you’re dark skinned, or the water doesn't flow if you’re dark skinned, it's absolutely not okay if a diagnostic based on AI is effectively wrong for an entire segment of population because of your skin color. That cannot happen. Even as much as there's regulation, regulation only gets you so far, and you need to make sure the engineers and the people building the products, and therefore their investors, make this a top priority. So, that's what we're also about.

VN: You talked about AI. Obviously, the big thing that people have been talking about for the last six months or so is generative AI. Does that fit into your thesis?

ET: Yes, in fact, we invested in a generative AI company called Hyro, and we have a number of other companies that are using generative AI for drug discovery, for no code developments. So, yes, absolutely, it does. Again, as always, when you talk about generative AI, you have to think about the data since you're using open source datasets for a powerful tool. A dot com I worked for 1999, we had all these signups and it turned out that lots of our signups were completely fraudulent because there was nothing like what you have today, where you have to pick a picture, you can’t just sign up. That did not exist in 2000 and you learned, so that's what's going to happen here. Generative AI is exciting, we're going to learn what needs to be done from a security and privacy point of view and from a bias point of view and we're going to have to make sure that those things are implemented in these products. And so, we are looking for companies that are very forward thinking in this. They're not just going to make the same mistakes that were made in other technological eras.

VN: Tell me about the name Black Opal. What's the meaning behind that?

TB: Obviously picking out venture capital for a name is very hard and so Eileen and I spent quite a bit of time thinking about what we wanted our name to embody. We thought a rare gem might be an interesting approach, because we are a female lead fund, we're looking for rare gems in the industry and so we actually landed on Black Opal because it is one of the rarest gems in the world. It's a very rare gem that's really only mined in Australia and we look for rare gem companies, and that embodies it. 

The other interesting thing about a black opal is, if you look at one, it typically will look either gray or are black at its base base color, but if you put it against the light, or move it in different directions, you start to see these brilliant colors coming out of it. We're also a fund that is looking for not just those brilliant companies, but also the brilliance of all the diverse people that we have in our networks, in our company, in our ecosystem. And so, for those two reasons, that's how we ended on Black Opal.

VN: Talk about where you like to invest in terms of the stage or the series. How early are you getting into these companies? Is it pre-seed, seed, Series A? And then how many investments do you make and how much do you generally put into those companies?

ET: We invest between seed and Series B, our check sizes are $250,000 to $2 million. We are going to have about 18 main companies in the portfolio, but we also make scout investments with check sizes of anywhere from $25,000 to $100,000. So, the main portfolio, while being 18 of those $250,000 to $2 million checks, we will have at least a dozen, if not more, scout portfolio companies with the smaller checks and they may graduate into the main team.

VN: Obviously that's a pretty big range, seed to Series B. What you need at seed level and the Series B level are so different, so what are you looking for at those different stages in terms of any traction that that startup has to have? I imagine that a seed company maybe doesn't need to have a certain number of customers or a certain amount of revenue, but by Series B you obviously would need to show you actually have a solid company.

ET: We have an internal rubric by which we measure our companies. So, on a qualitative basis, they do have to meet a threshold in order to be considered. That's one. And then, of course, there's a financial analysis to be done for every specific company, on their valuation, what their shares are being offered, where their traction is, what their pipeline looks like, what their potential exit is, how much cash you're going to raise, and how diluted that cash will be as you move forward. We are still a venture capital fund that wants to be in the top quartile, so there is an IRR component, or cash on cash component, that we are looking for our investment in that round. 

The easy rule of thumb from a venture funds point of view is that if you're at seed stage, it's got to be 7x to 10x, if you’re Series A or B it's 5x to 7x, if you're a little bit later it's 3x to 5x. We effectively are modeling those out and deciding whether or not, even if something makes the qualitative cut, whether we will return at the IRR that is required for us to be a top quartile fund.

VN: Let's say you're investing in a Series A company, do you want to see specific revenue, a specific number of users or customers to invest in that company? Is there a minimum that you need to see?

ET: There isn't a minimum, but we do qualitative scoring across five categories. We do have one category that gives them a score based on how many customers they have; if they have no customers it's going to be zero, if they have customers is going to be higher, but that can be offset if this is a repeat founding team that's had to two exits in the past, or maybe they're the first ones or maybe they have some tech that that is completely novel and very high moat, so that's going to be offset the score on the customer side. So, we don't have a minimum, but it's obviously taken in context with, again, how big is the market? How many competitors do you have? Is this a management team that's done it before? Do they have a tech moat? Is this at a valuation that makes sense for where they are? Are they going to be capital efficient or not? And then what, ultimately, is the potential exit? Is this a moonshot IPO company? Is this an asset that someone's going to want to acquire? You have to take all those things into account.  That's why we have this qualitative and quantitative analysis that's done. We don't want to preclude like, ‘Oh, you have no customers at all, so forget you,’ but we have companies where we have invested in them pre-commercialization, but these are repeat founders with very, very big visions that we know we can execute on. 

VN: I’ve talked to a lot of investors for this column and when I would ask, ‘what's the most important thing when investing?’ I would get the same answer every time, which was, ‘the team.’ Obviously, that's going to be a little bit different when you get to those slightly later stages but it’s especially important when you're investing in a seed stage company, for example. What do you want to see from that team at that point? What do you want to see from those founders? What qualities are you looking for from those entrepreneurs?

TB: There's a few things we do look for: the first is demonstration of execution. Eileen and I both worked in startups, we know how hard it is and that, especially in those early days, it's really hard to start a company and stick with it. And so, knowing that someone has had that under their belt, either as an executive or as a repeat founder, does give demonstration that they probably know what they're getting into, and have been able to execute on things if they've been successful in those roles. So, experience and expertise in this area can be very valuable. The other thing that we do look for, and Eileen alluded to this, are companies that can distinguish themselves from others. The founding team is often part of the development of that technology, the team and the technology that they have is really valuable. 

The last is we love visionary founders, people that can help us understand how this company is going to be a real transformative company in the industry, that really excites us. And so, when we have done some of those earlier phase companies that are pre-revenue, it's not just the founder that we think can execute, but the founder that has a vision that is going to make this company a transformative company in healthcare. 

ET: Obviously, if you're a first time person coming out of PhD school or MD school and don't have the experience it's hard to say, ‘Okay, I've done this before, please back me.’ I’ve backed those founders before, but the reason why is because they're very self aware. They may know they don't have experience in something but what they'll do next is they'll hire their co-founder or their chairperson who does bring the experience. I used to have this anecdote that B teams hire C people, and A teams hire A+ people because if it's an A team they will constantly look for people that are better than themselves. If they're self aware, they're going to know, ‘I've never sold into the healthcare system. I've never done this before, I better find somebody else that can help me with the skill set I lack.’ Especially these first time, or right out of school, people with not a lot of experience, the ones that bring other people to the table do well, and are worth backing. 

VN: There’s value in knowing what you don't know, basically.

TB: You'll hear this from seasoned CEOs all the time: surround yourself with great people because, at the end of the day, even if you're great, and you hire a team that's not, your company's not going to be a high performance company.

VN: Talk to me about how you evaluate the market you're looking at down the road. This company's going to exit 10 years from now or so, so how do you make sure that they're going to have a big exit at that point? Obviously you can't know that but you want to try your best to make sure that's going to happen.

ET: There's a saying that companies should not seek to be sold, they should seek to be successful, long standing companies. The entrepreneurs who start something to be sold, usually they don't have this crazy vision. While, of course, as venture capitalists we do have to be mindful of the exits, it's more if you can build a sustaining revenue company that continues to grow and could IPO one day. Now, what happens is many of those companies that are on their way to IPO, they're just going to get bought because the strategic acquirer knows that this is a better mechanism for having growth in their own company rather than building a company inside but, in general, you are trying to ensure this company has the opportunity it needs to IPO if they want to. That means sustainable growth, sustainable defensibility. That's what we are looking at and measuring companies on. 

Also, that's why it is so important that CEOs are self aware because, in that journey to that IPO, they have to understand that you need to bring in different kinds of talents, other types of talents, when you're going from zero to $2 million versus $2 to 10 million versus $10 to $100 million. Different people have to have to come in. And so, if the foundational team is not self aware, they're never going to bring in those people that are going to allow them to grow and scale. That's why people say teams matter and it is about those individuals, if they're self aware, and then open minded about bringing people into their team.

VN: Speaking of IPOs, I'd love to get your thoughts on digital health in general and how that's been shaping up. There wasn't a digital health IPO for nearly two years, we had a couple recently that declared they're going to IPO soon, but there hasn't been one since 2021. A lot of the companies that did go public have seen their stocks drop, and we've seen a bunch of companies actually leave the public markets in the last year or so. So, how does that affect your investing? Valuations have dropped quite a bit since the height of the pandemic, so where are they now? And how does that affect how you invest in companies?

TB: If you actually look at historical data of digital healthcare, valuations, deal sizes, and volume were really at a peak in 2021. They were growing steadily from 2019 to 2020, and then really peaked in 2021. What we did see was both exuberance in the market and factors in the ease of going public, particularly through SPAC vehicles, that really brought companies to market that were likely not ready. And so, this is a correction of where there was over exuberance in 2021. 

What's interesting is seeing where there's still opportunity, and also the opportunity to invest at a time when there is a correction in valuations. So, right now, what we are seeing are valuations that are more realistic, that are more based on revenue, more based on product and execution, rather than just excitement around the industry. We are seeing some of the acquisition markets opening up more and so the group of companies that are going to do well in this era of investing, versus the 2021 exuberance, are going to be the companies that that are building for the long haul, as Eileen mentioned, the companies that are building long standing companies that are not just going to be dependent on continuous VC funding and hyper inflated valuations.

ET: We’ve seen these cycles of up and down happen in 2000 and 2008. I believe we're seeing another cycle. Having been an investor for this long, those solid companies with investor bases and building real products, those will always do well in the end. The ones that are like, ‘I'm going to start this and then all of a sudden I'm going to get a higher valuation, and then I'm going to get into an even higher one from these investors that are more about financial arbitrage,' that's not what we're looking at. The art of venture capital is about finding companies that are really going to change industries and be these next transformational, I hate to say, unicorns. When Eileen Lee coined the term 'unicorn' there were only like nine and now there's hundreds so I don't like to use that term but the concept of what venture capitalists were supposed to do was that. We are building everlasting companies that are sustaining themselves with real products, real customers, real revenues, solving real world challenges and this is not about financial arbitrage. That is what maybe got lost in the last couple years when VC became another way to do financial arbitrage and you had a lot of investors that that was what they did, coming into the VC industry.

VN: It sounds like what you're saying is, these are the moments where the wheat gets separated from the chaff. When it becomes harder to raise that money then the really good companies are the ones that stick around and  the ones that probably shouldn't, the weaker companies, generally die.

ET: To be an entrepreneur is hard work, you need to really want it. And so, if you have the resilience and the drive to do it, you will stay with what you're doing, as opposed to, ‘oh, I'm going to join this startup and sell it off to whomever in a year, and I'm going to be rich.’ That's a different mentality and, unfortunately, we had some of that going on. Exuberance came and we had a lot of that going on and the same was true in 2000 with the dot coms, but there were lots of companies that stuck to their guns, even in the downturn of the 2000s. Some of our classmates from college rode it out and then went public, or got bought for billions of dollars after they spent their time riding this out, sticking to their guns, building good products, revolutionizing their industries, and exiting when they had done that. 

VN: Let's talk about your differentiation as a firm. Obviously, there are a number of firms that are dedicated to healthcare, we've spoken to a bunch of them for this series, so it would be great to hear about how you differentiate yourselves to your own investors. When you're going to LPs and you're saying, ‘give us money to deploy for you,’ what's your pitch? How do you separate yourselves from all these other firms that are doing something similar? 

TB: There's three very distinctive factors. The first is that we really have this thesis around novel, cutting edge technology and the value in healthcare. In fact, the really transformative companies in this space are going to be able to bridge that and bring those two aspects together. And so, the focus area on this collision of healthcare and technology is quite different from many other funds that may be focused on consumerism, or value-based care, or other things that may not have that focus on really bringing together these two industries. 

The second is we are highly experienced people in our field and we feel that there's an importance of bringing experience to the table, both in venture capital, in technology, and in healthcare, that distinguishes us from other funds that are out there, but also brings a lot of value to the investments that we make. And then the third is we are a female led fund and we are both women of color, and so we find that, in fact, it allows us to both get into deals through a unique vantage point and network, but also allows us to bring a different perspective network and set of experiences that others can’t bring to the table. As a result, we're getting deal access, but also bringing different perspectives to the table, that our companies and our fellow investors may not be bringing to the table. So, all three of those have distinguished us from some of the other funds that are out there. 

ET: Specifically, the first one: I have not met any healthcare venture capitalists that's taking tech from the defense and intelligence agencies into healthcare or seeing that as a focus. It's back to colliding two different industries and experiences into this. I mean, our advisor is Simon Segars, the former CEO of ARM, who also comes from the semiconductor industry, like myself earlier in my career. Again, I also do not see any healthcare funds that are taking people from the semiconductor defense intelligence industry and taking all the learnings from that into healthcare. We tend to see venture capital funds that are just either all healthcare people or  they're all tech people, and they're not trying to bring both sides together, both networks together.

VN: Is that also what separates you from entrepreneurs? I think there's this vision that people have of the way that venture capital works, which is that the entrepreneurs are coming to VCs and begging them for money but, obviously, the best companies will have their pick of the litter. They can pick the venture firms that they want to take money from, so you have to pitch to them as well. So, what's your pitch to the entrepreneurs? How do you tell them you’re a good partner for them?

ET: Remember how we started, which is I could see all these companies and defensive intelligence solving these problems and wanting to go into healthcare and not realizing their technology is completely relevant to healthcare, and not really wanting to necessarily put in the knowledge, effort, or resources to better understand it, because it's hard work. So, from our side, at least on the infrastructure and the tech side, what we say to them is, ‘did you know that what you're can building solve these problems, which will make a huge impact in healthcare? I, as a firm, can help you navigate how to get into that because we have institutional investors but also we have this network, starting with Tara, that can help you understand how to get into that.’ And then, on the flip side, for those companies that are, let's just say, tech light, but want to be more tech heavy, what will happen is, and this is the beauty of us being from different industries, I willl walk into the healthcare industry and go, ‘Are you seriously doing things that way still?’ Every time, every single time I go, ‘You cannot be serious if this is how you do things,’ whether it be from a drug manufacturing point of view to how you collect information to how that information is analyzed, it is incredibly arcane.

TB: We still use fax machines!

ET: Honestly! And I understand that it's secure but I go, ‘you do realize as the CIA doesn't use fax machines. I mean, come on, we're in a new age, are there other ways to do things. Ever hear of the blockchain?' When we see these tech companies, it's funny because sometimes they’ll be like, ‘I just don't know what she’s saying. What is this tech she’s babbling about?’ So, it takes both of us to really go, ‘Okay, that's interesting you're doing this this way, have you ever considered using a graph database? Have you ever considered using an edge device?’ I know that that's when they go, ‘Oh, wow, you mean I can do what I'm doing a lot easier?’ ‘Yes, you can, let's help you out with that, let's help you focus on the patients and not focus on inefficiencies in the tech and the way you collect information.’

VN: It sounds like part of your job is educating the healthcare system, which I can't imagine is a very fun thing to do.

TB: It's totally both sides, and, actually, one of the best parts of the fund is it allows us to debate and discuss things from two sides of the table. We're not all coming from healthcare, we're not all coming from tech. I might see companies that are amazing and then Eillen will say, ‘I've seen 10 companies that do that, I don't think the tech is that distinctive.’ On the flip side, Eileen might say, ‘this company has this great tech,’ and I'll say, ‘no one's ever going to pay for that tech in healthcare.’ This dichotomy of us bringing these two experiences both makes us very thoughtful about the deals that we do, but also brings a different vantage point than what our companies typically see. It may be a group of only healthcare investors around the table that can’t tie in that tech side of the world, or it may be a bunch of tech investors that can’t tie in that commercialization in healthcare. And so, being focused on this area allows us to really leverage our strengths, our collective set of experiences, our unique networks coming from two different sides. And then the third is we have had 20 year careers in the industry, we have built up trust networks, worked with founders, worked with other people in the industry, and so we are seen as trusted people in the industry for founders.

VN: Earlier in the conversation you brought up a couple of companies that you've invested in. What was it about those companies, when they sat across from you, that you saw in them that made you want to invest in them?

TB: Empatica, that was the second investment out of the fund. They are a wearable device that was developed out of the MIT Media Lab. Really, the key part of the device is a novel sensing mechanism for difficult to measure things in healthcare. So, things like pain, stress, neurologic movements, which we have a hard time measuring in healthcare; in healthcare we use a lot of subjective measures for those kinds of things but, in fact, if you can actually measure those things more objectively, you can get better health outcomes for patients, you can help treat things like pain and stress and mental health conditions that are hard to treat because we have a hard time measuring them. And you can get more access to things like clinical trials. We loved this company because it really embodied that collision of cutting edge technology, real use cases in healthcare, and they were also a company that actually had really demonstrated product market fit, both in the life sciences world and in the healthcare clinical world. I love the company. The founder is really the pioneer of wearable technology coming out of the MIT Media Lab, her name is Rosalind Picard, she has assembled a great team and a CEO that's now proven himself over a number of years is really getting out to market. So, the tech, the people, the problem they were solving and the product market Fit were really compelling for us.

ET: I can add another just a couple more notes on that one: that is a great example of where you have compute at the edge, which is this wearable, with the conductivity necessary to get the signal, and ML and AI being used to understand a condition. So, they are leveraging both Cs and the A: they have a distinctive product solving a real world problem in healthcare. On top of it, apart from diagnosing, they're being used for clinical trials to ensure diversity amongst clinical trial participants. So, it's in all points apart from just the very impressive team and commercial traction. 

The other one  which I like to talk about, because it's, again, this collision of defense and intelligence tech into healthcare. I don't know if you know what a graph database is; every time I say this I get really excited and all the healthcare people go, ‘What are you talking about?’ Anyway, graph databases are databases that really help you better understand data that's coming your way from an analytics point of view, used by defensive intelligence industries already in the past to understand patterns and understand how to keep everybody safe. The CEO of our portfolio company, Hyro, was part of the intelligence community in Israel. He is aware of graph databases, he used a graph database to build a conversational AI platform before ChatGPT came out and he did this several years ago. Now, when he was building this, he showcased it and effectively had a hospital system say, ‘Oh, my goodness, this is going to help our hospital better interact with patients. Can you start using a graph database, which was used to build conversational AI, to help patients better navigate the healthcare system, find appointments and find doctors?’ Today, he's taken that from one hospital to about a dozen. So, a great example of tech that was used for the surveillance economy, for the defense intelligence industry, which is, again, graph databases, but also the conversational AI part, which I won't get into what agencies use for that, but that is a way to augment a workforce, into specifically helping a patient navigate care, and in urgent situations get exactly what they need. So, great founders, good attraction, good vision, and a very self aware founder, but colliding both worlds. 

Hopefully you can see we're pretty nerdy, we're MIT engineers, so we are not like, ‘okay, let's just do another telehealth where all I'm using is a phone and network of people.’ That's not us. We like to use the companies with tech but, again, that tech having a very relevant use in this industry.

VN: When you get to work every day, as a venture capitalist, what is the thing that really motivates you? What's the part of the job that you really love the most that really makes you want to do this?

TB: There's probably a few things. The first is really the impact that these companies are having and that we can have as investors. There's lots of ways to have an impact in healthcare. I mean, I practiced medicine, I had day to day impact when I was treating patients and caring for patients, but very early in my career I realized healthcare was really broken and we have to do something about this very broken system that's filled with problems. What I have seen is the startup ecosystem really start to fill many of those gaps in places like mental healthcare, in places like access to care, that really excites me about being a part of a player in this startup ecosystem. We already see that from so many of our companies that are impacting cardiovascular health, obesity, neurologic conditions, cancer, all sorts of conditions, and having that ability to invest in many of these companies allows that impact to really grow.

The second is just great people. The team both at Black Opal, so being able to work and found a company with someone I've known for 30 years is really a special gift, not everyone gets that opportunity, but then also to be able to build a team and a firm that embodies our values and our working styles and our respect for each other is really exciting for us. But I think of people beyond that: for all of our portfolio companies, we actually just had our annual meeting yesterday, and the whole time I was thinking, ‘the people that are leading these companies are just amazing people and to be able to work alongside them as a venture capitalist is really, really a gift.’ On the flip side, we have amazing investors, and you've seen some of the investors around the table, same thing: really amazing people that have given us a lot that we're very grateful for in terms of their support, but it's really wonderful people that have really come to work every day.

ET: For me, it's always been about the health and safety of others. I mean, that was what I was doing at In-Q-Tel and continue to do this here. So, health and safety of others. But then the second is, it makes very little sense to me that women are half of the population, a little more than half, half the consumers, but control less than 1% of all venture capital dollars that decide which next product get funded. I mean, it really is just not logical to me. So, why I'm excited about Black Opal is like we're just starting and we, along with our other female-led venture capital cohorts, are here to make the change necessary to make sure our industry is more inclusive. We're here to try to solve healthcare and then sustain more winning and then I know that by being one of the first ones, we have to do well so that more and more will not be afraid to try and more institutional investors will back women-led funds if they see that we can be successful. So, those are the motivations. It's just like any industry where you don't have a lot of women and you need to be the first, we're a little bit used to that. We were some of the first only female engineers in our classes in college, and did well and so now, thankfully, there are more people that want to study chemical engineering or whatever it is. And so, we're just doing the same thing in VC. So, that's what motivates me.