Last week, Leadership Health Care (LHC) hosted a Fundamentals Series panel titled “Health Care Stakes—Risks and Rewards of Investment.” The discussion explored several areas of health care investing, from memorable fails to favorite projects to a topic that touches all LHC members in particular: how to keep Nashville, the nation’s health care hub, from going the way of Detroit.
The panel featured in-depth perspectives from three seasoned investors: Bruce Crosby, a managing partner of Health Velocity Capital; Vic Gatto, founder and CEO of Jumpstart Foundry; and Stuart McWhorter, co-founder and chairman of Clayton Associates. John Davis, the vice president of Council Capital, moderated the discussion.
The conversation began with each panelist discussing their background and specialties: while Crosby works mainly in later stage venture investing, McWhorter’s work lies in earlier stage venture investing, and Gatto is in the seed stage.
They then dove into the doom and gloom of investing—each was asked about his most memorable fail. Together they acknowledged the importance of failed projects. “Failure is really a function of, ‘what did I learn?’” said Crosby.
The speakers agreed that risk assessment should on focus the entrepreneur’s team, because a dysfunctional team is a common reason for a deal to go south.
Gatto pointed out that, even with a great idea, a health care startup needs to consider real patient behavior and attitudes to determine whether or not the idea will work. Patients, unfortunately, do not always make rational decisions.
In discussing the future of Nashville as a health care center, all panelists agreed that while there is uncertainty, there is also plenty of opportunity in this vibrant community.
“Nashville is known as a health care services town, but this is beginning to change, because there is so much new technology. Where I want to spend my money and time is B[usiness] to C[onsumer] health care, enabling consumers to take more ownership in their health and have more of a partnership with their doctors,” said McWhorter.
Gatto concurred. “The opportunity is to understand that innovation is coming. Our advantage is that we have great health care expertise here, but there is a bit of a blind spot on the consumer side. Health care is going to change, whether Nashville is ready or not. We need to engage with innovators and use our advantages to continue to lead in the future.”
“Develop relationships with people you trust,” said McWhorter, “Nashville needs this engagement—and Leadership Health Care is a great place to build your network.”