Ep 95 Venture Capital: Exits, Acquisition: Lee Shapiro, Marty Felsenthal, & Charles Gellman

Do you know what an “Emoji Dance” ?? ?? ?? ?? ?? ?? is?

Do you know what an? “Emoji Dance” ?? ?? ?? ?? ?? ?? is?

Special Quests:

• Lee Shapiro - Managing Partner at Seven Wire Ventures
• Martin Felsenthal - Partner at Health Velocity Capital
• Charles Gellman - CEO and Founder of Hido Health

Overview:

The podcast episode featured a discussion on healthcare investment, telehealth, and the challenges and opportunities within the healthcare sector. The guests, renowned venture capitalists and founders, shared their insights into their investment portfolios, strategies, and experiences in the healthcare industry.

Introduction and Icebreaker: “Emoji Dance” ?? ?? ?? ?? ?? ??

The episode began with an introduction of the participants and an icebreaker session called the "emoji dance." The hosts and guests used emojis to express their opinions on various healthcare companies.

Portfolio Companies and Acquisitions:

• Change Healthcare: Acquired by Optum. @Change Healthcare UnitedHealth Group
• MDLive: Acquired by Cigna. The Cigna Group
• MysisUS: Acquired by Allscripts. Allscripts
• McKesson: A powerhouse in oncology. McKesson
• Click Therapeutics: Received FDA approval for Rejoin, a treatment for major depressive disorder. Click Therapeutics, Inc.
• Tiviti Health: Formerly Healthways, now privately owned.
• Clover Health: A Medicare Advantage plan, went public via a SPAC in 2021. Clover Health
• Livongo: Merged with Teladoc. Teladoc

Healthcare Investment Insights:

• Telehealth Market: The discussion highlighted the merger of Livongo and Teladoc. Lee and Marty emphasized the importance of providing longitudinal care and listening to customers' needs to build stronger relationships and deliver better outcomes.
• Impact of the Pandemic: Marty argued that the pandemic had a mixed impact on telehealth, increasing competition and diluting the potential of dedicated telehealth platforms.

Challenges in Telehealth & Digital Health:

• Both guests discussed the challenges faced by telehealth companies, including high clinician costs, the need for massive volumes to achieve profitability, and the importance of value-based care.
• Marty emphasized the necessity for telehealth companies to invest in product enhancements to capture more value-based pricing and deliver better care.

Venture Capital & Market Environment:

• Lee and Marty shared their perspectives on the venture capital market, noting that many private equity and hedge funds have left the healthcare sector, leaving dedicated firms like theirs to continue investing.
• They discussed the current state of the market, mentioning that the public markets are closed to new IPOs in the healthcare sector, and that there is a significant amount of dry powder (uninvested capital) in the venture capital sector.

Investment Strategies & Criteria:

• Lee and Marty elaborated on their investment strategies, focusing on team resilience, product-market fit, and the ability to navigate challenging cycles.
• They shared their experiences with early-stage investments and the importance of operational experience in guiding companies through ups and downs.

Public Market Environment:

• The guests discussed the lack of IPOs in the healthcare sector in recent years and predicted a slow recovery post-election, with selective openings for companies with strong unit economics and market sizes.
• They also mentioned the potential impact of AI and technology in driving future innovations and exits in the sector.

Future of Healthcare Innovation:

• The conversation shifted towards the future of healthcare innovation, particularly the role of AI and the importance of addressing administrative inefficiencies and workforce challenges.
• Lee expressed optimism about technology's potential to solve meaningful business problems in healthcare and improve outcomes at lower costs.

Portfolio Companies & Acquisitions:

1. Change Healthcare - Acquired by Optum.
2. MDLive - Acquired by Cigna.
3. MysisUS - Acquired by Allscripts.
4. McKesson - Oncology investments.
5. Click Therapeutics - FDA-approved Rejoin for major depressive disorder.
6. Tiviti Health - Formerly Healthways, now privately owned.
7. Clover Health - Publicly traded via SPAC.
8. Livongo - Merged with Teladoc.
9. Array Behavioral Care - Telepsychiatry services. Array Behavioral Care
10. Clear Data Networks - Healthcare cloud migration and cybersecurity.
11. OnShift - Labor management for nursing homes. OnShift
12. PayZen - Healthcare affordability solutions. PayZen
13. Jasper Health - Cancer care guidance. Jasper Health
14. HomeThrive - Support for unpaid caregivers. Homethrive
15. Artera - Automated text-based healthcare solutions. Artera
16. Override - Chronic pain management. Override Health

Founders & Key Individuals:

1. Lee Shapiro - Managing Partner, Seven Wire Ventures. Lee Shapiro
2. Marty - Partner, Health Velocity Capital. martin felsenthal
3. Charles Gellman - CEO and Founder, Hido Health. Charles Gellman

Conclusion:

The podcast provided a comprehensive overview of the current state and future of healthcare investment, highlighting the importance of innovation, strategic investments, and the challenges faced by the healthcare industry. The insights shared by Lee and Marty emphasized the potential for technology to transform healthcare and the necessity for resilience and strategic thinking in navigating the complex landscape of healthcare investment.

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• We might just lift off to Mars if the orbit is right! ?? ?? ?? ?? ?? ??
• In kindness,
• Michael Mann, (?? ??)