Meet John Beadle, co-founder and managing partner at Aegis Ventures

Steven Loeb · April 29, 2024 · Short URL:

Aegis Ventures works with health systems to build and invest in digital health companies

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.

John Beadle is co-founder and managing partner of Aegis Ventures.

Since Aegis’s inception, Beadle has led the studio’s executive functions and efforts to tackle healthcare’s biggest challenges, from clinician burnout to health equity and financial sustainability. He was the architect of Aegis Ventures’ $100 million partnership with Northwell Health, New York’s largest health system and private employer. This innovative partnership combines Northwell’s diverse, generalizable datasets and implementation sandbox with leading medical, technology, and business resources within a single, fully integrated ecosystem. To date, the partnership has resulted in the launch of four new companies – Ascertain (back office process automation), Caire (patient & provider platform), Optain (ophthalmic imaging), and Hume AI (emotion analytics). He sits on each company’s Board of Directors. Most recently, Beadle led the creation of the Aegis Digital Consortium, a group of nine leading health systems who will partner with Aegis to build and scale companies that solve their most pressing challenges.

Before launching Aegis Ventures in 2020, Beadle spent five years at APL Group, a global private equity firm and Aegis’ sister company, where he led an investment team focused on the development of new business lines on a global basis. Prior to APL, he worked in primary investments at John Laing Group and investment banking at Bank of America Merrill Lynch. 

The son of a nurse, Beadle has always had a passion for healthcare. He earned his BA from Harvard College, where he focused on the US business-government relationship, with an emphasis on health policy, and his MS in Global Affairs from Tsinghua University as a Schwarzman Scholar.

VatorNews: A great place for us to start would be the high level about Aegis: what your mission is, where you fit into the venture ecosystem, and how you view investing.

John Beadle: Aegis is a company creation platform, which effectively means that we're a company that builds companies. We're focused exclusively on digital health and healthcare AI and we work very closely with health systems to work backwards from challenges that they're facing, in order to launch new companies with them each year in partnership.

We build companies in a few primary ways. One is we'll build around prominent scientists who have ideas or technology that we can turn into a commercializable business. Another is identifying a thesis and building a team around that thesis with a great management team and providing all the best in class resources we have within our studio. The last is an emerging thesis that we're pursuing more in recent months but it's finding a business unit within a large incumbent, like a health system, spinning it out, turning it into a platform that you can sell nationally, and applying a typical cloud AI transformation toolkit to it to make its operations a lot more efficient, which can really shorten how quickly it takes to reach scale. 

Aegis’ investment philosophy is centered around building a best-in-class set of resources across a few different vectors: Forming newco theses that are ahead of the market, transforming those theses into products that you can test in the market and validate very quickly, resource and capitalize them in the most efficient way possible, build great teams of fantastic entrepreneurs to run the companies, and provide them with access to a differentiated commercial pipeline. 

We focus a lot of time and attention on the last vector and in support of that, we announced last week the launch of the Digital Consortium, which is a group of nine health systems, all industry leaders around the country in the regions that they serve, who will be development partners, co-investors and customers for our companies. The model of how we build companies is centered on going in and partnering with one health system, solving a need for them that we feel is extensible to large IDNs around the country, and then from there, bringing that set of products to another group of health systems within our consortium. 

Most of what we're doing is B2B enterprise software and AI, so once you have five or six large-scale deployments, that's typically when you're close to product market fit. And so, for us, it's all about significantly accelerating the velocity and success rate of launching, validating, and scaling early-stage companies with a much higher success rate than typical entrepreneurship. Overall, we have a very concentrated approach, in terms of industries, focus areas, types of partners we work with, etc., given the amount of synergy, scale, and expertise you need to launch companies that succeed in a different fashion.

VN: Digital health is a space that was riding the highs of the pandemic for a couple years and now, in the last year or two, saw quite a big dip in investments and the companies that were on the public markets started delisting. Now, post-pandemic, as telehealth and all that stuff fades into the background a little bit, where are the opportunities going forward?

JB: Digital health is still a very nascent industry. We saw tremendous growth during COVID, with bubbles created in various parts of the market, which is very natural whenever you have technological advancement at such a rapid clip and adoption goes through the roof in the way that it did during COVID. Our thesis, long before generative AI became the buzzword of the year, was that AI is going to fundamentally transform healthcare both clinically and operationally. One of the earliest things that we did upon launching Aegis was to create a very differentiated data relationship with Northwell, which has access to the most diverse patient population of any health system in the country, given the markets that it serves. We built a data lake house in partnership with the Northwell team. Everything is fully HIPAA-compliant, the data stays within the four vertical walls of Northwell, and we follow all the right deidentification procedures, etc, but what we've built is an apparatus that enables us to ideate, validate, and scale AI and ML products a lot more quickly than you typically could, given how challenging it is to source robust, generalizable datasets and negotiate a deal for each one without a pre-existing construct for doing so. We began forming those types of data partnerships close to four years ago.

We believe AI will drive tremendous impact both in the front office (ie patient-facing) and the back office (ie caregiver-facing) of healthcare. We spend a lot of time on AI agents to automate back office processes, so everything from discharge planning, prior auth, supply chain and procurement, call centers, etc. using a very technology framework that we can apply to a wide variety of manual, repeatable workflows and processes. We're also very focused on using LLMs in the front office of healthcare as it relates to patient engagement and access and empowering health systems to unlock the full value of the major IT investments they’ve made (e.g., their CRM, EHR, ERP, etc). Right now, because there are so many legacy systems all throughout the health enterprise, it's very challenging to create that connective tissue that links the patient to all the different systems across the health system, and we think LLMs are going to be able to dramatically transform how this can occur. Across both areas, we see amazing opportunities to 

reduce inefficiencies, make the health system easier to navigate, and lower the cost of care by transforming the unit economics of care delivery. 

We'll also go after other opportunities that leverage AI in areas where we have high conviction. One example is a company we built called Optain that helps close care gaps through better prediction and prognosis, both through proprietary hardware and software. From a single fundus image, it can let you detect 140 different diseases and then be able to make downstream referrals for everything from diabetic retinopathy, glaucoma, AMD, cardiovascular disease, etc. and move us toward a healthcare system that is more focused on preventative care versus the one we have right now which is so focused on treating patients for high acuity care. We also built another company called Hume AI, which was our first newco launch. Hume is focused on  building empathy and emotional responsiveness into a wide variety of AI applications. Across voice, transcription, facial expressions, to name a few modalities, what Hume is focused on is how to help AI applications better understand, interpret, and respond to human emotion.

VN: Rock Health put out their numbers for Q1 and over 40% of all the companies that got funding had AI somewhere in their description. How do you sort of weed out who's really got AI and who's using the term and using it as a buzzword?

JB: It’s a very valid point. You're seeing a lot of companies put a wrapper on top of ChatGPT and claim that they're building differentiated AI. At the end of the day, a lot of those companies will end up getting washed out by the competition since they won’t be serving an important enough need to justify being a standalone application and the business models will be challenged since they’ll be paying for very expensive API calls

For us, when we think about building a new company, it comes down to: Are you building a defensible business with a differentiated technology and a great team with the right commercial channels and distribution? We seek to build timeless businesses that are going to be successful, not over years, but decades. Right now, it's a great funding environment for AI, but if you look at history, you see there's always a bust after every boom. It reminds me of the old Warren Buffett quote: “When the tide goes out, you can see who’s really swimming naked.” 

Over the next few years, and as the funding environment shifts in the same way it's happened with digital health, you’ll start to see who's built durable businesses with differentiated technology and real moats around them that are serving important customer needs. Ultimately, it really does come down to how well you can serve a particular segment of the market's needs better than anyone else. The reason why we like working so closely with our customers to co-develop products and scale them is it ensures that we're not building solutions in search of a problem, or things that are or things that are vitamins instead of true pain killers. Making sure that we don't fall into that trap is very central to our model.

VN: I guess in a couple of years we'll see the winners. Like all the mental health companies during the pandemic that popped up; a few years later, a few of them are still around, those are the good ones, and the rest of them fell away.

JB: For sure. As we all know, there were a lot of fly-by-night virtual care companies created during COVID. When you have zero interest rates, and VCs are willing to write $100 million dollar checks in very nascent, pre-product market fit companies, you end up with this kind of situation. One of the other key lessons here is that the companies that have endured have clinically validated models and have prioritized patient safety and quality over growth. Most of the stories we've seen of those companies that have had major downfalls and falls from grace, have focused more on growth than on serving patients. We would much prefer to build the technology and the software and the tools that enable traditional provider systems to be empowered and to serve patients, which they're extraordinarily good at, versus building full stack care delivery companies. Across the board, our philosophy to company creation is  centered on how to partner with incumbents who are already delivering care at scale and doing it extremely well. Health systems are the best brands in communities: they're trusted, they're well known. So for us, it's really about partnering with those that we're confident can deliver care at scale versus trying to build full-stack companies that disintermediate them.

VN: Let's talk about the money that you put into these companies that you're helping to build. Are you operating out of a traditional fund? 

JB: We're backed by a family office that invests on behalf of one individual. This informs our strategy in a few ways. First, since we own 100% over a zero hurdle, instead of 20% over a zero or an eight hurdle (like most VCs), we can focus our energy on a smaller number of very high conviction opportunities that we think can be multibillion-dollar businesses that drive real societal impact. We can also invest with pretty long time horizons; we've had deals on the private equity side of things where we've held them for 17 or 20 years, and so we can be incredibly patient when we have a thesis that we feel strongly about. It also means that we can do deals at the breakpoints of institutional presence, so a lot of opportunities out in the world that fund the traditional funds are not well positioned to do. Company creation is one of those things: typically funds are looking to invest in great teams, great technologies and products with some early traction, even at the seed stage. Our business is centered on manufacturing those deals from the ground up, creating proprietary opportunities. Similar to our private equity heritage, we can fully control every step of the value creation process: we can derisk things, we can utilize governance models that we’re comfortable with, and we can partner with others that we like and trust since we control and own the companies from day one. On a holistic basis, we're able to pull pieces together in order to reduce risk and maximize upside in a way that we think can both produce great returns and build great companies. So, structurally, it's a major advantage as it relates to our capital source and overall resourcing.

VN: How much is your initial investment and how much do you invest over the life of the company?

JB: We are, at our core, Seed investors since we’re building the companies from the ground up.

With that said, we'll typically do a very robust Seed round. To date, it’s been anywhere from $5 million to $18.2 million, so there's a pretty broad range. The sweet spot for us is $10 to $12 million as a first check. Where that typically takes you is a large institutional Series A led by a major venture capital firm and the early signs of product market fit and scale.

VN: It sounds like you’re getting when they just have an idea on a napkin.

JB: We're the ones coming up with the idea on that napkin, so what's pretty unique about our model is people aren't coming to us and pitching us ideas. We spend a lot of time with our customers and they tell us, “These are our problems,” and then we have a team that focuses on venture creation and thinking through putting a business plan together, building a minimum viable product that we can get user feedback on, validating it with end users, continuing to take it through that process of refinement, to get to the place where we have enough conviction that will go from an idea that we formed to a company that will spin out. So, we're really the ones with the napkin. 

VN: And so then you're building out the whole company, you're building out the executive team, or you're finding a CEO and the entire C suite for that company. Where do you find those people? Who are you looking for exactly to take stewardship of these companies? What's the criteria for that?

JB: There's a couple of different profiles of leaders for companies. The first we call “scientist in residence” type incubations. There we're really building around a set of intellectual property, publications, someone who's best in class in a particular field, and has technology that we think is highly differentiated. In those situations, you don't need to place a professional CEO as early, given that you're really investing in a set of technology and a thesis and you can see if the person can grow into being that professional CEO. We've already had cases where they have and that's amazing given that, when you look at the largest 100 companies in the world, a lot of them are founder-led companies, where the person developing the technology, who also becomes the CEO, tends to do very well. Whenever you can find someone who can grow while receiving the right mentorship, and we're lucky enough to have a lot of really experienced CEOs around our ecosystem, who can mentor and teach and guide executives to fill that role, we are very supportive of it around these types of companies. 

The second model, which we pursue more frequently, is simple internal ideation, where we form a thesis, build a management team, and lock in a set of high value strategic partners. We're really manufacturing these companies from the ground up based on a particular thesis or area of conviction that we want to pursue. In those cases, we're typically looking for senior executives who have done this before, people who have either been CEO of successful companies, or were one step away from that, and have seen how the process works, have great leadership skills, good relationships, are trusted by the venture community, and we feel have a vision to be able to drive these companies for many, many years. So, our target CEOs tend to be really experienced executives who are able to see the value of our ecosystem and the fact that you can get companies to product market fit a lot more predictably with less capital. So, from a risk adjusted return standpoint, when you evaluate starting something yourself, even though you don't start with 100% here, what you end up with at the end, on a risk-adjusted basis, is tremendously higher by virtue of all the resources we're able to bring to bear.

VN: What are some of the biggest problems that health systems are facing right now? I don't know when the last time you would have met with some of these health systems, but the last meeting you had, when they said to you, “this is what we're facing,” what were those problems that they’re currently dealing with?

JB: We're meeting with executives at our health system partners every day and so we're pretty close to their key challenges. There's five primary buckets that most of them are grappling with. One is new sources of competition: there's been a lot of different tech-enabled players that have been disintermediating health systems and so I would segment that across everyone from Amazon, Walgreens, CVS, scaled payers, etc. They can all compete nationally, they can develop differentiated technology, they're well funded, and have higher margins. Health systems are grappling with how to respond to these new competitors–particularly the ones that are trying to skim their commercial patients? When you lose money on such a significant portion of your overall patient population, it means you need to rely on a smaller proportion of your patients on commercial insurance, to be able to stay alive and maintain a positive operating margin. If you lose those patients to these large-scale national players who don't have to serve the other patient populations, you're not able to fulfill your mission and stay afloat.

Systems right now are very focused on how to become attractive to not only those patient populations, but everyone. However, in order to survive, they need to raise their operating margins, which leads to the second big issue, which is margin compression. Over the last couple of years, particularly since COVID, the business of providing healthcare has become extraordinarily challenged in a lot of ways. Reimbursements have gone down, particularly for all the patients that are being reimbursed by CMS, and commercial insurance reimbursements have also gone down. At the same time, they’re seeing costs soar, particularly due to many of the workforce challenges that they're all facing. 

This has made the business model of delivering healthcare extremely difficult, which leads to the next major challenge, which is workforce health. Everyone's facing burnout, staffing shortages, and a lot of turnover. This is leading costs to go significantly up. When we talk to systems they are very focused on this issue, and it's been something we've focused on partnering with them to ameliorate through our companies. 

The next big one is health inequities, across a lot of different vectors of the American healthcare system. These are all community organizations, and most or all of the ones we're working with are nonprofits and view themselves, at the end of the day, as serving the communities around them. At the same time, they do need to drive margin to be able to do that successfully, but they're all grappling with how to more equitably serve different patient populations that come from all walks of life. This has also been an area of focus for us.

The last big one is just the speed of technological advancement: they've struggled to come to terms with the fact that, whenever you're doing things, particularly things in IT, it can take you a year or 18 months to implement a new technology. You're seeing such extraordinary product velocity and innovation that, by the time they implement something that they decided on two years ago, there can already be something out there that's dramatically better. And so, they're having a tough time keeping up with that. At the same time, they're also facing the point solution fatigue problem, where they have a vast variety of vendors that don't talk to one another and are not fully integrated. This both makes it hard to control costs and makes it more difficult to fully unlock the value of the investments in IT and infrastructure they have made. Aegis’s model is centered on helping them solve those problems through new company creation.

VN: Why don't you give me an example of a company that you created to solve each of those problems? 

JB: For new sources of competition, I would highlight a company we created called Caire which is focused on digitizing service lines and making it so health systems can launch digital experiences across every clinical program that are competitive with those that the large national virtual first providers are creating. For example, we are partnering right now with Northwell’s direct-to-employer arm to help them build programs that they can sell directly to self insured employers to be able to compete with those national virtual first providers. 

On the margin compression front, there's two elements of this. One is that our entire model is designed to combat this by solving challenges that can help them drive more margin. One example of that is a company we created called Ascertain, which is using AI technology to dramatically lower the back office burden associated with delivering healthcare through automating business units within the back office. So, that's lowering administrative costs and costs associated with direct care delivery. Our model is also centered on how you provide a fair amount of upside to health systems when they help you build these technologies, which is the second element I alluded to. Typically, when you invest in these types of companies, you're getting very small ownership stakes at high valuations; what we like to do is really align our incentives with systems by giving large ownership percentages, the ability to invest early, and then drive new sources of revenue and margin to the system through the value we're creating together in these companies. So, there's two vectors of how this occurs instead of one. 

Workforce health is a really big one for us. There, I would highlight two companies. One is Ascertain, which I already mentioned. There, we're trying to take some of the business units that are significantly understaffed and automate them by giving health system staff co-pilots. I'll give an example of discharge planning for post-acute for LTAC and SNF. There, we’ve partnered with a central administrative team of nurse case managers that was going to need to triple this year in size and, because of this technology, they likely won't need to hire anyone else, and nurse case managers are one of the scarcest resources in the system. 

We also launched a product called Upliv, which sits within the purview of Caire, which we originally rolled out to Northwell nurses. Northwell leadership highlighted to us that many were experiencing challenges as they were going through menopause and perimenopause, which led to issues related to absenteeism, presenteeism, people leaving the workforce, and so we were able to launch a company that better served those nurses’ needs in midlife. We initially launched it with several hundred nurses; they then expanded it to all of them with those employees and will begin offering it to all Northwest patients in the upcoming period. That's a really good example where Northwell came to us and said, “Nursing is a big problem for us, what can we launch there, and then, over time, expand it to other patient populations?” 

On health inequities, I'd highlight two. One is the company Optain, where we focused on developing proprietary hardware and software to detect over 140 different diseases, primarily deployed in primary care. Given that the fundus camera we've developed is 70% cheaper than the ones that are used in ophthalmology offices, it expands the TAM significantly and makes it affordable to deploy in church basements, community centers, and for primary care. This enables screening for folks who don't have access to it today and catch conditions that could become very acute and severe if they weren't intervened at the appropriate time. The last one I’ll highlight is a company as much as it was a public health project: Northwell came to us with maternal health as a big challenge, all health systems are facing huge disparities in care, and tremendous maternal morbidity and mortality. So, we developed a series of algorithms, starting with preeclampsia, that we're making available for free as a public health initiative, given that it's a huge area of focus for Northwell and Michael Dowling, so we did it to be supportive, given the fact that we have teams that are very good at building those things. 

On speed of technological advancement and point solutions, there I would highlight our entire approach, which is Aegis as your digital transformation partner, which provides for a single point of accountability. One thing we found with most of our health system partners is that they don't care very much about the name of the company. For them, it’s all about, “We're partnering with Aegis, you’re our digital transformation partner, we want to work with you across multiple key areas of our core business. We want to be able to hold you accountable for the performance of these companies and we want you to build and scale platforms that can, over time, replace many point solutions. Through the guidance that you're providing, as a trusted partner, we'll be able to better keep up with how quickly technology is advancing.” And so, for us, it's really all about building close partnerships where we deeply understand their business, their market, their IT infrastructure, etc. and then partner with them to help transform their operations.

VN: You mentioned the Digital Consortium, so talk about how that's going to work and how that's going to help both Aegis and the health systems that you work with. How are you going to work together with those health systems?

JB: The Digital Consortium is our vision of a trusted partnership between Aegis and each of the health systems that we work with. There's a couple of different pillars of how we work with the systems, the first is around strategic guidance, which is us deeply understanding their five-year strategic plans, what investments in IT and technology they've made, where they see significant gaps. Then, the next step based on that understanding is being able to think through where there are technologies that already exist in the market that we can help introduce them to or make available that can solve those problems. In situations where we think there's a market gap or an unmet need that's extensible, we work together to build those companies and allow them to be co-development partners, investors in the company at favorable valuations, and large enterprise reference customers to help solve the problem and generate commercial traction that enable them to fundraise and grow and expand. And then, the last bucket of how we work with them is around shared knowledge and being able to bring the systems together to share best practices, work together to launch new initiatives, and be able to work on scaled endeavors together that can generate impact and compete with the large national scaled players.

The Digital Consortium will deliver tremendous value to the systems we're working with both in terms of solving core business problems and, as we're successful, we're going to create new diversified revenue streams for them through the investment returns that these companies will generate. We also believe it will enable us to get these products to market and to scale a lot more quickly and cheaply, which means they will be more attractive investments.

VN: I mentioned earlier about the bubble that sort of popped, not just in digital health and technology in general. Companies are having trouble raising money compared to where they were a couple of years ago and when they do raise money, the valuations are lower than they were. So, where is the industry now compared to a few years ago? Where do you see it going? And does that have any impact on the way that you think about the companies that you're going to create and put money into?

JB: In the midst of COVID, the market went haywire, and anyone could raise a huge amount of money if they had a reasonable degree of credibility and a good pitch deck. Things have really come back to Earth. What people forget is, for most of history, building startups was a grind, it was incredibly difficult, and most people didn't get funded and most businesses were not venture backable businesses. A big theme that we're seeing a lot now is that you can’t put a square peg in a round hole and create the venture growth curves that the VC firms look for with most businesses. During COVID, you could get funding for almost anything since capital was effectively free and VCs were deploying at tremendous velocity. Our perspective has always been that things would come back to Earth and that the timeless principles of building businesses around competitive moats, with good unit economics, a path to profitability, and in large markets without tremendous competition, would always hold true. As the market downturn occurred, we looked at our businesses and said, “We're reasonably well positioned because we focused on all of those things that have been true for almost all history as it relates to business building.” 

To that end, we believe a lot of the market rationalization that's been happening is actually a good thing given that the amount of capital that was deployed relative to the returns that were generated cast a pall over everything, given that LPs looked at their returns and realized, “As I'm allocating capital, I'd rather put this in public markets or private equity or private credit or other places.” There's always tremendous competition for where institutional investors are going to put money and so in order for venture to continue to receive allocations that are good for the industry as a whole, venture capital firms need to be more prudent in terms of how they deploy capital, which we've seen across the board. And so, it's largely a good thing and a positive for the industry despite some of the near-term pain we’re seeing.

VN: What do you see happening to the companies that raise funding during the height of COVID? It's a couple of years later, they raised at huge valuations maybe that they didn't deserve, now they have to go on to their next round and maybe they haven't lived up to that valuation. Are they taking down rounds? Are they just shutting down? What's happening to those companies? And what's the effect of that on digital health overall?

JB: You're seeing a lot more shutdowns. It's very hard to execute a big turnaround, particularly if your thesis was wrong and you raised a huge amount of money and now need to pivot your whole business. It's really challenging to do that, particularly when you hire around that quantum of funding round. I've seen very few examples of successful pivots of companies that have raised hundreds of millions of dollars.

What you often end up seeing is different assets and contracts and other things that are sold off to players that are succeeding. Accordingly, I think you're going to see a lot of M&A and consolidation of those companies. What's interesting is, for the first time in a while, the companies that are the acquirers are often the smaller companies that have raised a lot less money but are more nimble, have been more fiscally prudent, are growing at sustainable rates, have the right institutional investors at the table, etc. And then you can cherry-pick some of the strong technology assets, people, contracts, etc. from the folks that over-fundraised and overspent and weren’t unable to generate the traction they needed to complete their next round. So, you're going to see a lot of M&A that's really a shutdown, and folks that are just buying off different pieces of companies, but it enables them to save face.

There have been some examples I've seen very privately from speaking with folks in the market where their boards or their management teams have realized they were wrong early enough that they have $100 million in the bank and they can significantly rationalize their workforces, their cost structures, etc, and pivot the business successfully with enough cash in the bank. Typically, that entails taking it down round at some point, and I'm seeing a lot of structure in the market where you have high liquidation preferences, warrants, and all sorts of complexity. Ultimately, that will come to bite you; it's typically better to use a simpler structure, take your medicine, deal with the down round, get back to a valuation that's sustainable, that you can grow into, and be able to focus on the business and making it sustainable going forward. Whenever I see crazy structure, my first thought is that it creates an overhang on the whole company since when the next set of investors come in, the liquidation preferences will stack, other folks will want warrants, etc. So, I'm a big fan of simplicity and trying to keep these things as simple and unencumbered as possible.

VN: Talk about your journey, your career, and what led you to Aegis and what led you to be so interested in digital health.

JB: I'm a private equity investor by training. I joined our sister company, APL Group, close to seven years ago by way of investment banking. APL is a multi-asset class, multi-strategy investment firm, and functions as a family office for one individual, Bill Schoenfeld, who has been my mentor for quite some time. I was very inspired to go work for Bill at a time of really significant multi-dimensional expansion for the firm. When I joined, I was focused first on running an investment team with a global mandate and, second helping him grow the business through the creation of new business lines and expanding into new geographies. The chance to work with and learn from him was very attractive to me and ultimately why I joined. 

One of the projects he gave me on the side, outside of my typical day job, was overseeing his personal venture capital portfolio outside of the company, which was a large portfolio of companies that he had aggregated over about 10 years; more than half was healthcare and life sciences. So, I met with a number of health system venture arms around the country, looking for better deal flow and better opportunities and ways to form new partnerships. We started working with Northwell about five years ago on a minority venture capital basis, and we built a great relationship. As I was socialized more and more within the health system, I just saw tremendous potential for a venture studio model, which I've been very interested in for a long time, to be able to pair really nicely with all the strategic resources within large integrated delivery systems, particularly access to frontline workers and frontline problems, significant data assets, implementation sandboxes to be able to test and deploy new solutions, and the ability to have large enterprise reference customers very early on in your corporate lifecycle. Bill was willing to seed the creation of a new platform, which became Aegis, and so I really started it as employee number one, built it out, brick by brick, through a lot of hard work. 

There's been a lot of learning; it's been a continual process of crossing the river by feeling the stones given that there wasn't really a great existing paradigm we could emulate for doing what we do. No one has really gone in and worked with health systems and built companies shoulder to shoulder in this way, so we've learned a lot over time, we've continued to be able to attract more experienced people. Ultimately, we really are in the business, more than anything else, of attracting extraordinary talent given that most companies only fail when founders decide it's no longer worth it. Over time, we've been able to bring in some really extraordinary people at all levels of the organization and so that's been the cornerstone of our success. 

VN: What are some of those lessons that you learned? What are some of the things maybe that you didn't anticipate when you got into the digital health space?

JB: We formed this thesis in 2018 or 2019, and the launch of Aegis was early 2020. And so, we formally created Aegis Venture Partners, LLC entity in March of 2020, right at the beginning of COVID. We had no idea that you would see digital health accelerate at the pace that it did and so there were a lot of key learnings over the course of COVID around how to build and secure sustainable adoption for these technologies at scale and a lot of learnings around how to work with health systems in a productive way. What that mostly comes down to is building complementary teams and complementary skill sets since doing this is very different than building more typical tech companies where the mantra is all around, “Move fast, break things, get things to the market really quickly.” Ultimately, our business is a lot more complex, and it requires a lot more patience. A big part of that, for me is around needing to hire people that want to build companies in this way. If you hire your typical Silicon Valley,” move fast and break things” entrepreneur, and you tell them, “you're now going to shadow the discharge planning team for the next three or four months and learn every element of their workflow and partner with them very effectively,” that’s not attractive to a typical Silicon Valley entrepreneur who wants to be able to move with extraordinary speed and velocity and set their own destiny at all points, etc. It really is a partnership at the end of the day and there's give and take on both sides, but you need to be in it for the right reasons. It's not just about building companies, it's also about driving impact and change in an industry that's extraordinarily complex and regulated. I've learned over time, who are the types of people who want to work in that way and build companies in this manner? It's a very small subset of the overall umbrella of entrepreneurs.

The last one that I would highlight is just concentration and focus. Early on, we had a very small team, we were doing a lot, and the best decision we made was narrowing our aperture and focusing on doing a small number of things extremely well. There were periods in the very early days where we were trying to do a lot, and we found it's much better to focus on a couple of things that can really drive impact versus things where you're doing a lot of movement but there's not a lot of forward progress. Success for us is all about how you can sustainably resource and advance these businesses and build teams that can drive them forward, versus doing a lot of different things in parallel but not actually making rapid progress on any. So, there was a big turning point for us, probably a year into launching Aegis, where we really started to focus on the handful of things that have now gone very well that are now completing Series A’s or Series B’s and are driving real impact clinically and administratively. So, that's been a big learning experience too.

VN: You launched this in March of 2020, was the best time to do that or the worst?.

JB: I know it's a non-answer, but the timing was a bit of both. The reason it was the best was the amount of acceleration in technological progress that we saw over this period, and the extent to which these technologies began to be adopted at scale. That was a tremendous blessing. What was most challenging was you couldn't meet in person and so everything was happening over Zoom. Health systems are boots-on-the-ground types of places; they’re brick and mortar,and  you need to see people in person. Even now, four years later, they're still very much in person, which is why I'm on the road most of the time visiting health system partners. You're able to drive so much more impact when you're on the ground meeting with people in person, so that was challenging.

I ended up in Hawaii for the early part of COVID. I was there at the very beginning of the pandemic March of 2020, coincidentally, visiting the founder and chairman of APL, and COVID hit and I just decided to stay since there wasn't really anywhere else to go or anything else to do. Over time, as I hired more people, I had them all move and so we built our first startups around the kitchen table in Hawaii during COVID. As you can imagine, the pool of people who are willing to take a chance on something brand new, and come move to the middle of the world, to the middle of nowhere, on a tropical island, in the middle of a pandemic to grow with you, it's not as broad as you need to be able to build great companies at scale. So, when things really started to take hold for us was May of 2021 and we moved back to New York City. We built out the office and that was when we were able to meet in person and really able to start to drive these things forward. I almost think of Aegis as having a first founding in March of 2020 in the middle of Hawaii, but the real founding, when we were actually able to get things done, was May of 2021 when we came back to the city and we could do things in a more traditional way.

VN: There are worse places to be right at the beginning of COVID.

JB: We couldn't have been more lucky, we really couldn't have. It was an incredibly blessed experience. As I was working with Northwell and starting to speak to other health systems back then, what they were dealing with during COVID was just extraordinary and the amount of heroism and courage that it took to be able to do that was amazing. So, what we were doing in Hawaii was truly a speck of what they were able to accomplish in the midst of the pandemic, particularly in New York City, which was the hotspot. So, it was very inspiring to observe all that progress and we ended up learning a lot from seeing how Northwell responded to it as it relates to the types of companies that we wanted to build and the types of partnerships we wanted to form with systems around the country. 

VN: My sister actually lives very close to Elmhurst Hospital. If you remember, that was one of the ones that were overwhelmed so much that they had bodies literally on the sidewalk. So, looking back at what the health systems were going through at the time, it's a crazy thing to remember four years later.

JB: It was really harrowing to see, but what Michael Dowling was able to do over the course of COVID was just extraordinary. He’s one of the great leaders of our time, and we are so fortunate to benefit from Michael’s sponsorship and support. He has created an amazing culture at Northwell where people have a lot of autonomy, they can make mistakes, try new things, etc. and they all have his blessing and support to do new things, which is rarer than you’d think in healthcare. Michael’s leadership throughout COVID was an inspiration. He really led the organization and the community through quite a perilous time.

VN: What is the part of your job, especially working with digital health companies and the health systems that really motivates you? What's the part of the job that you really love the most?

JB: It's really the direct patient and caregiver impact of everything that we're doing. Just a little bit of my background: my mom was a nurse, so I grew up around healthcare. She got quite sick when I was very, very young, after a tragic accident, and so I saw her struggle to access the healthcare system throughout my entire life. I always had an aspiration of being able to transform healthcare and make it better but was trying to find the right avenue to do so. 

As we’ve seen with Upliv, which is just one example, if you take a nurse who's having a very difficult menopause journey, and you build a company that helps her dramatically improve those symptoms, our view is that when you help a single nurse, you can help one thousand patients. And so, seeing the results we were able to drive through those types of projects, has been extraordinarily rewarding. Same thing with some of the automation tasks we’re advancing: where you take a process that requires a nurse case manager to spend 45 minutes looking through eight source systems, filling out a form using pen and paper, and then sending a fax, and turn that into 30 seconds and a small number of clicks. The fact that those workers, over time, can get more involved directly in patient care if they’re freed from the burdens of paperwork and administration, which is what they're all looking to do, we believe these innovations can play a major role in reducing burnout. Those are just a few examples. For me, as I think about the impact I aspire to drive through Aegis, it's really all about the direct connection between what we're building and so many of the key issues that are facing the American healthcare system. Being able to help patients going through some of the most difficult moments of their lives and empowering healthcare workers to do what they do best– healing people–is really what motivates me.

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