Latest / StartUp Health NOW Podcast / Same Math, New Market: Inside AHA Ventures with Lisa Suennen

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Same Math, New Market: Inside AHA Ventures with Lisa Suennen · StartUp Health NOW Podcast

• 0:00
  [on-hold music] Every one of us carries our cell phone around, and we're quick to look at it when we're bored, you know? And what grabs you and makes you put it down? A great storyteller, a great speaker.
• 0:15
  And so I think it's not just about your idea being good, it's also about communicating well. If you're not the world's best communicator, like, find somebody who is to help you train to be better at it.
• 0:26
  It's so important. If you can't tell a good story, nobody can hear you. [upbeat music] I'm Logan Plaster. I'll be your host. I'm the managing director here at StartUp Health.
• 0:39
  And welcome to today's expert AMA with Lisa Suennen, managing partner of the American Heart Association Ventures.
• 0:47
  Excited to, to get into her story, and her lessons learned, and, and how people can get more involved in AHA Ventures. So AHA Ventures runs multiple funds, overseeing roughly 200 million in assets.
• 1:00
  Beyond AH- AHA, Lisa's CV is lengthy. I won't read it here, but it spans 35 years, multiple venture funds, operational roles, co-founder of C-Sweetener, which was acquired by HLTH.
• 1:14
  She even chairs a scientific advisory board at NASA, and teaches at Berkeley. So we could get into a whole separate conversation about how you manage your time, Lisa, but we'll...
• 1:24
  maybe we'll save that for a different AMA. But we're very fortunate to have you. So Lisa, welcome, [clicks tongue] and thanks for coming. Hi. Thanks, everybody. It's so nice to be here.
• 1:33
  I remember meeting the founders of StartUp Health when they were thinking of founding it. [laughs] Oh, okay. So I have been connected for a long time to this organization one way or another, and so it's nice to be back.
• 1:46
  Well, speaking- Uh-... of the way back machine, you weren't always in venture, and you started out as an entrepreneur in a health tech startup, like so many folks on this call, which is a great connection point.
• 1:56
  As a way of getting to know you a little bit better instead of reading a long bio, take us back to that experience.
• 2:02
  Tell us a little bit about what it was like, and maybe a bit about how it's informed how you invest today. So I started off not to be in healthcare. That was not my plan.
• 2:12
  I was in tech, back when tech was really pretty boring. I mean, I know, probably hard to believe for some of you, but it was pre-internet, and I was pretty bored.
• 2:21
  [laughs] Not an engineer, I'm not a tech person by background. And I got introduced to the founder of a... it really was a health services company, if we're being honest with ourselves.
• 2:31
  Tech was not a big part of it back then. And it was focused on mental health and substance abuse. Really the first company to do
• 2:38
  a carve-out program to focus on better care for that area of need at a time when there were almost no health benefits for that in a benefit plan, not that they're so great now, and very little focus on that.
• 2:51
  But it was the fastest growing cost in medicine at that time, which was the late '80s, before a lot of the drugs that we know now and use to help people.
• 3:00
  So it was really about therapy and treatment at different types and places, and managing care effectively and cost effectively.
• 3:08
  And I joined the company when it was about a $5 million in revenue startup, running marketing and sales. And I was there as it grew. I took over parts of the operations. The company went public, and then it got acquired.
• 3:22
  We still grew it. It kept growing. We bought ourselves back and went private. And then by the time I left, it was a nine-year stint. We had about 800 million in revenue.
• 3:32
  We're covering about 35 million covered lives, most of it fully capitated at risk. A thing we don't even hardly do anymore the same way. Quick pause. 5 million to 800 million. Was there a secret to your success?
• 3:45
  What were some of the things that helped you to scale like that? Part of it was right place, right time, and when it was the fastest growing cost in healthcare at that time.
• 3:52
  And it was a time when companies and governments, like state employee programs, Medicaid programs, were starting to drown in the cost of it.
• 4:00
  And a lot of them were starting to carve it out as a separate benefit and subcontract it to people like us.
• 4:05
  There was a couple other companies that started around the same time, so there was a little bit of competition, which was actually good. I think it helped grow the industry.
• 4:13
  And also, I think we were just really good at it.
• 4:15
  The things about that company that really informed my perspective ever since were, number one, we had a massive focus on health economics, in that we understood, and everybody in the company understood, how the money flowed through healthcare and how intrinsically tied that was to the clinical decisions you make.
• 4:32
  And by being full risk and full capitation for most of these programs, not all of them, but for a lot of them, we had aligned incentives, and that was a big part of it. And figuring out how to build that into programs
• 4:43
  and do the right thing clinically to get the right cost outcome, and it's not easy. It's really hard to do, but we really did it, and that has informed me on my thinking ever since, for sure. Okay.
• 4:55
  You've carried those lessons forward versus, hey, the system's just changed and now, like, it's all new math. You, you feel like s- a lot of the same principles apply? It's the same math. It's the same math. Okay.
• 5:05
  Well, let's jump right into AHA Ventures. We've got a room full of amazing founders building healthcare solutions. Yep. And we wanna know what's guiding your investment thesis today. What are your top priorities?
• 5:18
  So first of all, we have four funds at AHA. They are all anchored around heart and brain health and related conditions.
• 5:25
  So a lot of people don't realize the Heart Association probably should be called the Heart and Brain Association, but it's not. What can I tell you?
• 5:32
  [laughs] And when we think about brain health, we think about it very broadly, not just stroke and things related to vascular, but mental health, which is deeply tied to good heart and brain health overall, dementia, all of it.
• 5:46
  Yeah. Neurodegenerative diseases. So then we think the next layer around that is things that cause heart and brain problems.
• 5:53
  So that might be inflammatory diseases, autoimmune disorders, metabolic disorders, kidney dis- you know, all sorts of things. So we think about it quite broadly.
• 6:02
  As we look now at the four different funds, they each have a different kind of view on that from that perspective. So the first fund is Cardiation. It's a medical device fund.
• 6:11
  Very broad thinking about heart and brain health, but pretty connected to the core. So most of the deals they've done are heart, brain, or metabolic.
• 6:18
  We have a Go Red for Women's Health fund that does, um, devices, digital diagnostics, tech-enabled services. We don't do any therapeutics in any of the funds at this point.
• 6:30
  Their view is how things that affect women disproportionately or differentially. Doesn't mean the companies they support will only do things that are focused on women alone.
• 6:41
  They just have to demonstrate they're solving a problem that is more prevalent or differentiated in women, and that they care about that and, and focus on that as part of the solution.
• 6:51
  So each of the companies we've funded there serve men and women, but they are thinking about things that are important to women. We don't in- do any reproductive health in that fund.
• 7:01
  It's all heart, brain, and related conditions. Okay. Now- The third fund Oh, go ahead... social impact fund. So that's investing social determinants of health primarily,
• 7:10
  um, food and nutrition related, access to healthcare for underserved populations of all types, so not just culturally underserved, but rural, veterans, children, you know, whole long litany of folks.
• 7:25
  And also economic vitality, so things that improve your ability to get stable in your life financially so you can get healthy or get insurance.
• 7:34
  And then the last fund is a venture studio to start up new things in any of these categories. So that's the sort of the menu at sort of the macro level.
• 7:43
  I'm gonna push on you to help us understand kind of the conversations that are happening behind the scenes in terms of trends within those categories that you are getting more excited about this year. Yeah.
• 7:54
  So I'd say that some of the categories we're particularly interested in, and this is a little bit of a random walk, but we're interested in things that better improve stroke outcomes for people.
• 8:04
  We're interest- 'cause that's hard, and it's not been well done, and we're seeing a lot of really interesting stuff in restorative medicine, bioelectric medicine, improving function after stroke, et cetera.
• 8:15
  We're very interested in early diagnosis and treatment for heart conditions that are often missed in women.
• 8:22
  Some of those are imaging things, other types of diagnostics and biomarkers, and also potentially interventional things. We're interested in things around endometriosis, PCOS, now renamed PMOS. I... good...
• 8:35
  things that are women's conditions that drive up stroke risk and heart risk by quite a lot. A lot of people don't realize endometriosis has a 20 to 25% increase in stroke risk, people with endometriosis.
• 8:47
  We're interested in products and services on the social determinants side that aid people in overcoming what's happening in Medicaid right now and losing access. Very interested in things around dementia, if they work.
• 9:00
  I mean, there's a lot of spinning around in that space that isn't going very far. But hopefully somebody will come up with some good ideas there, and we've had a few come by ours.
• 9:10
  Just to press on that for a second, 'cause we have a lot of folks working in dementia and Alzheimer's. Mm-hmm. I mean, obviously it must... it needs to work.
• 9:16
  That's one sort of binary, you know, line, but what kind of outcomes are you looking for? Are there things that you've seen that seem like they are positive on the, on paper, but they don't meet your criteria?
• 9:28
  Can you give us a little bit more detail there? Well, we've seen a lot of diagnostics, and mostly those are not that interesting to us because until there's something you can do about it, you know, it's not that helpful.
• 9:40
  Okay. And I think that's true across the board for diagnostics, to be honest. Nobody will pay for something that you can find but not take care of.
• 9:47
  We're interested in some of the services and, and tech-enabled services that help people manage through those issues, and we're interested in therapeutics.
• 9:53
  We've seen a couple device therapeutics in the, in the Alzheimer's space, for instance, that are quite interesting and emerging. Okay.
• 10:01
  So you talked about, like, at least four different doorways that someone might come through to work with- Mm... AHA Ventures. How should founders... There might be people on this call who match all four of those.
• 10:12
  How should they be thinking differently about how to approach the AHA based off of the different doors? It's a great question, and the answer sometimes isn't obvious, even from our various w- websites. You can see them.
• 10:24
  [laughs] When you go online, we each have a website under AHA Ventures website.
• 10:28
  People can either send me something and I'll forward it to the right person, or they can identify the right person in each of the funds, or they can just...
• 10:36
  I mean, we all talk to each other all the time, so we, there's no hard lines between us. If you send something to the women's fund but it should go to the social determinants fund, they will make that happen.
• 10:45
  It's always better to have a warm intro to a fund anyway. If you can try to communicate with somebody in one of the funds, that's better, and you can ask them, you know? Yeah.
• 10:54
  If you send me something, I'm probably not gonna respond much. I'm probably gonna forward it internally to the right person and say, you know- Yeah. I'm thinking more about the approach folks take.
• 11:01
  Like, look at the website at one level- That's good... about what's interesting, right? Okay. But it is true that it might fit two things, and sometimes they work together. Okay. And that's, you know...
• 11:10
  But they all work together all the time, but they can fund together, too. So it's, you don't have to be perfect on finding the right door once you get in the door. In fact, I think it's a great lesson.
• 11:18
  I mean, if you only found the one door and didn't realize it, you applied to two or three of your thesis areas, that's really helpful.
• 11:25
  We've had a couple where one fund said, "Ah, I don't want to do this one," but another fund said, "I do," you know?
• 11:29
  [laughs] Let's zoom out a little bit and we'd love to get your thoughts on the funding environment at that industry level. Kind of what are you seeing? What... Yeah, what's getting funded and why?
• 11:41
  And what are you seeing? Well, you know, AI is getting all the money. I think we're getting closer to a time when AI becomes like talking about the internet.
• 11:52
  You, everybody knows it's there, but you don't have to make it the focus. We'll see. [laughs] I think there's still a lot of AI for AI's sake and a lot of things that say it- Yeah...
• 11:59
  questionable whether they really are, and whether it even matters. [laughs] Is that just you talking or is that, like AHA Ventures, is that becoming a, you know, a tide of folks saying- I don't know... you know what?
• 12:12
  I would say it's becoming a small wave [laughs] 'Cause you've got two ends of the spectrum. Am I right? You've got two ends of the spectrum.
• 12:18
  You've got folks that are still like every pitch needs to have AI, you know, boom, boom, boom, and you've got folks, and I would agree with- I, I think that's unfortunately true to get funding these days.
• 12:27
  You know, and- Yeah... not necessarily from us, but if we're gonna build a syndicate, somebody in the crew is gonna say it. Yeah. And, you know- But it's not, but it's not your...
• 12:35
  You're saying that's not necessarily- It's not our focus... Okay. It's not your focus. You're not saying it's, it- AI's gotta be slide two.
• 12:41
  There's not a whole lot of devices that need a lot of AI, although they could benefit from it in some cases. I mean, there's- Yeah... more sensor enabled devices, even interventional or implantable ones now.
• 12:49
  So I think it's good to have a data story. It's good to have a tech story.
• 12:54
  Are there elements to the story that you look for that maybe are a little counterintuitive, things that are on Lisa Sunen's mind based off of your 35 years of experience? Yeah. I'll, I'll answer for myself.
• 13:05
  It might be a little bit different for some of the people that work for me. You know, I think part of it is I've done this for a long time. I've been an investor mostly since 1998, and I've seen a lot of stuff.
• 13:18
  So for me, I like to see stuff I haven't seen before. That always intrigues me more, or stuff that has a little further, gone a little further because, you know, one of the pat...
• 13:28
  You get a lot of pattern recognition over time, and it's not always right, but it is my experience that a lot of the tech, especially tech forward companies, that if they are one million of revenue, their odds of getting to two million of revenue are less than you'd like to think.
• 13:41
  And so getting a little further along in product market fit, I look for that. On to the question about do we ever fund holistic medicine, the answer is not really.
• 13:49
  It's gotta have a really deep evidence and science base, and that is what the Heart Association prides itself on when we really trade on that knowledge a lot.
• 13:59
  And most of the holistic medicine stuff doesn't have the traditional evidence backing to it. Not to say it isn't good or right, but it is true.
• 14:10
  And so I think it would have to have a pretty solid scientific basis to, to be considered. Last question before I jump into some audience questions. Tell us a little bit more about Studio Red, the venture studio.
• 14:22
  Given your experience operationally as an entrepreneur, I'm curious, and maybe this isn't your direct area day-to-day, but just more holistically how you're thinking about co-creating a company. Hmm.
• 14:34
  Like, if you can kind of choose- Yeah... how a company gets built, what are some of the decisions that you're making that might be different from what you're seeing being pitched to you?
• 14:43
  We like to find a couple of companies each year that are very young, that need assets we might have at the Heart Association, knowledge, data, capabilities. We have a lot of them actually.
• 14:56
  A lot of things that we have at the HA that we could bring to bear and then help.
• 15:00
  And we also have a team of people who are entrepreneurial and help, you know, hands-on development of an organization, build the product, build the company. We have a lot of access, so we'll work with a young company.
• 15:11
  And like we did one, it was a company being formed by another venture studio and a hospital, and we jumped in and, you know, for a decent equity position and contributed a lot of assets and value to that, and we're hands-on with them and we're on the board for a while.
• 15:24
  We're not anymore, but now they're doing six seven in ARR and they're off to the races, company in the technology enabled services area, helping cardiology practices improve the experience for both physicians and patients.
• 15:37
  We'll work with people who have ideas that come to us and who wanna co-develop the thing- Okay... whatever it may be. We actually just funded some research on the clinical research side with the hope of...
• 15:49
  It's more late stage translational, but it's going to academic, you know, kind of researchers to advance a couple categories in women's health and if they...
• 15:58
  We're gonna work with them for a year on the research and translation side, and then we're gonna pick one at the end to make into a company hopefully. That's the goal anyway.
• 16:05
  That's kind of- We're almost open to anything. For us, we're returns oriented, but it's gotta be in the mission areas. We're open to any conversation about that kind of thing.
• 16:12
  That's kind of wild to me that you're taking on just pure ideas, and you have this, this way of, of taking something from a great notion into a business. Yeah.
• 16:22
  And I'm, I'm guessing it's gotta be a, an amazing idea from like a kind of ideal founder. But what does that process look like? I mean, I feel like people would be pitching that every day,
• 16:34
  just sending you an idea saying- Well, they are, but we have criteria. It's like a, you know, like a fund in a way of what... You know, for us it's really about starting with the need.
• 16:41
  How big is the need and how big is the gap in the competitive marketplace? Yeah.
• 16:45
  If there's a big hole in the market and an opportunity and something that has a core asset, if you will, whether it's an actual asset IP-wise or a good idea that is novel, we're very interested in seeing if we can add something to that.
• 16:58
  I saw the question about CK, and we're working on something in that category right now that's about, you know, managing, more effectively managing medications and thing in that space. Yeah. Okay.
• 17:09
  I'll ask one more question and then we'll sort of wrap this up. We just heard from 9 or 10 founders.
• 17:16
  I don't wanna call anybody out or put anybody on the spot, but i- it does make me think about the power of a short pitch to you, and you and your team have to instantly filter ideas.
• 17:28
  Obviously, you also need to look at a deck and look at data, but what are some of the things that grab you in an elevator pitch? Clarity that you're solving a very well characterized, big problem. Quality of the team.
• 17:46
  Team, clarity. What are some mistakes? What are some things that will kinda run you aground? Too unfocused, no clear evidence that it's a good idea, um,
• 18:01
  lack of understanding of the reimbursement and regulatory market that surrounds it. How much of a differentiator is it having a great initial pitch? Like, you, if you hear 100 ideas- 150%. 150% of it.
• 18:13
  I mean, think about it. Yeah. You know, we all like good storytelling, and every one of us carries our cell phone around and we're quick to look at it when we're bored. You go to a conference, right?
• 18:22
  And- What grabs you and makes you put it down? A great storyteller, a great speaker. And so I think it's not just about your idea being good, it's also about communicating well.
• 18:33
  If you're not the world's best communicator, like, find somebody who is to help you train to be better at it. It's so important.
• 18:41
  I have a blog post I wrote about a billion years ago called The World Is Made of Stories, Not Atoms, and A-T-O-M-S, atoms, because it's not a bunch of facts. But a lot of people like that piece.
• 18:52
  You can find it on my Venture Valkyrie blog. It's out there in the world being old, but it's still valid. If you can't tell a good story, nobody can hear you. I love it.
• 19:02
  Obviously, that's got to be followed up by a deck that's got all- Some things, yeah... all the right data. But in order to get that meeting- Mm-hmm... you got to have that great elevator pitch. 100%. Amazing.
• 19:12
  Okay, I'm going to bring Jen back up. Well, first of all, Lisa, thank you for joining us for this hour. My pleasure. Hear all your interesting things in there.
• 19:20
  You shared a lot of gold, great wisdom, and then you handled a whole wide spectrum of questions. Everyone who joined, I thank you.
• 19:29
  This is what this community is all about, getting on these sessions live, hearing what you're working on.
• 19:35
  So it's not just about a transaction with Lisa, it's about understanding what the rest of the community is working on.
• 19:41
  So you can actually get on the app, you can connect with someone that you heard from today, and actually move forward faster together. So I would encourage you to do that. Yeah. So thanks. Yeah.
• 19:52
  I do this kind of thing to pay it forward, you know, because sometimes then somebody turns around and helps me. So help each other. It's really valuable to help each other and lean on each other as entrepreneurs.
• 20:02
  It's so hard what you do. And if you heard something today that you can reach out to your colleague and help them do it, 'cause they'll help you someday. It definitely comes around. Awesome. Great note to end on.
• 20:13
  So thank you all. Awesome. All right. Great to see- Thanks for having me. Good to see you. Thanks again, Lisa. Appreciate it. Thank, thank you, Lisa. Thank you, everybody. And we'll see you. Take care.
• 20:21
  We'll see you around.
• 20:23
  [upbeat music] And finally, an invitation to all of the extraordinary health transformers, whether you are a startup, someone building the future of health, or whether you are an investor, funder, or buyer of the solutions out there in the marketplace, this is an invitation to you to join the Startup Health member community.
• 20:45
  Learn more at startuphealth.com. Look forward to hopefully seeing you soon. [outro jingle]