FILLING THE VOID

In 2003, long before I co-founded RedCrow, https://www.redcrow.com, I was in the middle of my typical workday when I received an alarming phone call from my wife, Jessica. She was 24-weeks into her pregnancy and had suddenly begun to dilate. I soon found myself in the passenger seat of an ambulance with my bride on a stretcher as we raced towards Brigham and Woman’s Hospital in Boston.

Around 2 AM, Jessica’s water broke. I recall the hospital staff doing everything they could to stabilize her as a diligent team of nurses and doctors went to work. In the midst of the orchestrated medical chaos, I was pulled aside by Dr. Stephen Ringer, Chief of New Born Medicine. As he put his arm around me and braced me for bad news, Dr. Ringer admitted that this situation was dire and that there was a high probability that things were not going to end well. Not that babies as small as ours don’t survive, but a baby at 23–24 weeks of gestation, with no administered steroids, is going to find it hard to breathe.

Our daughter, Juliana Grace Smith, was born weighing 1 lb. 6 oz in the early morning on January 16, 2003. She lived for only a few hours, then quietly passed away in our loving arms. Bundled in pink clothes suited for the most delicate little doll, my wife and I watched in guttural devastation as the nurse wheeled Juliana out of our hospital room past our supportive parents and siblings. It was beyond crushing to know they’d never get a chance to meet her and that we had just lost our baby girl.

After going through such a tremendous loss there is no easy way to deal with this type of massive void. How would we make up for the happy future we had envisioned as parents to our daughter? We simply struggled to grasp what had happened. The doctors reported to Jessica and me, that an increased amount of amniotic fluid made my wife’s body think she was much further along in her pregnancy then she was, ultimately causing the early birth of Juliana.

After our loss and a period of reflection, I decided I needed to support causes that endeavored to make labor and delivery safer. To do my part to prevent other parents from having to go through what our family had experienced, I joined the March of Dimes and began serving on the board of the Boston Chapter. During my tenure, I chaired the largest charity and awareness walk that the chapter had ever held at the Hatch Shell Memorial that resides right along the Charles River in Boston. Additionally, I spoke at engagements, sharing our personal story while supporting the cause however I could.

Through my activities at March of Dimes, I met Dr. Jonathan Davis, Chief of Newborn Medicine at Tufts. He called to inform me about a new medical device being developed by one of his colleagues, and their need for early-stage funding. The medical device was an improved fetal monitor that had algorithms and a sensor component that was attempting to extract the fetal and maternal heart rate of expecting mothers. The device reportedly performed better than any other non-invasive monitor could, while also capturing a fetal ECG. After learning more about the project, a meeting was set up with the founding team of doctors and engineers at Tufts medical. I brought along a senior VP from my financial brokerage firm for a second opinion. We took the meeting, and besides being blown away by the vision, I learned that the start-up was looking for capital and had been turned down by many early-stage Venture Capital investors.

In the venture world, their start-up company was deemed too early and too risky, as it required a 510k FDA approval. The company was initially only focused on the US market, where 4 million births per year did not make for the type of home-run that venture capitalists were seeking. When we returned to the office, I asked the senior advisor if he thought we could help. I soon learned that my colleague had only attended the meeting to see if he could bring on the medical founders as personal wealth management clients. I should not have been surprised at this type of behavior as it is not out of character for someone in the financial world — where gathering high-net-worth individuals assets is a top priority.

I wanted to help their start-up. I Ioved the company’s mission and leadership team. I found it compelling that it had IP from a major university and healthcare organization, and I wanted to find a way to get involved. I tried to reason with management at my firm about ways we could help. I thought for our investors, even though there was a high-risk element, that some of my clients that would be open to the opportunity. Despite my desires, it was made clear that I could not present the opportunity to my clients without my firm representing the offering. For obvious liability reasons I understood and complied — regardless of whether or not I thought my clients should’ve been made aware.

A month later, Jessica and I took a trip to San Francisco. It was during a hike in the Tennessee Valley where I first explained to her that my heart was telling me to leave the finance world and help this start-up gain traction. Knowing I had to follow my gut instinct and with my wife’s blessing, I soon resigned from my position. I carefully handed my clients off to the team I worked with, taking on a business development position with the medical company in exchange for stock options.

I was able to make several key introductions, one of which was to a former client of mine who thankfully brought other investor friends to a meeting about the company. One of the investor’s wives was a labor and delivery nurse, and she was prepared to ask all the tough questions. They figured if anyone in the group could vet out the investment, it would be someone who knew the space and was familiar with the needs in delivery care. One of the first questions she asked was if our team had prepared for the complications surrounding obese expecting mothers. It was a significant question, and thankfully our device was specifically geared to overcome this critical challenge in patient care. Based on this thoughtful due diligence session the group elected to invest and even took positions on the company board. This investment marked a significant achievement as it was our first financing outside of the founding members of the company.

From 2010, when I left the financial services firm to advise this company, up until 2012, I learned everything I could about the private equity investment world, outside of the retail brokerage universe. What I learned was many accredited investors wanted to invest in early-stage opportunities, but never gained access to those offerings — traditionally speaking, these types of investments only present themselves when an investor is in-the-know, with some direct connectivity to the founders or fellow investors. I also started to get a taste of just how difficult it was for a start-up with real potential to capitalize itself, especially when the company doesn’t fit within the modeling criteria of angel groups, venture capital, or investment banks. Most are seeking deals that can only have home-run returns. This strategy is a given in the venture capitalist model since 9 out of 10 startups fail, so finding success through fast and quick returns becomes a necessary model to make up for losses within the investment portfolio. Healthcare becomes even more challenging for these groups because they rarely have the right professionals with the required expertise to analyze and react to the healthcare industry.

During this time-frame, I was watching the phenomenon of crowdfunding take off, starting with Kickstarter and Indiegogo. I was blown away to see billions of dollars going through these internet-based platforms in the form of donations. People were pledging money for t-shirts or the right to buy products earlier than everyone else, but all these investments equaled no equity. I realized that if the start-up community, like the fetal monitor company, could raise money on the same type of platform, there would be a new disruptive force for the capitalization needs of emerging enterprises. With an online presence, marketing materials and social media campaigns, investors would finally have access to early-stage companies that aligned with their interests, and start-ups would have access to the capital support needed to grow. With the signing of the Jobs Act in 2012, my thoughts on online equity fundraising became a reality.

I partnered with Jerry Harrison of the Talking Heads in 2015 to found RedCrow, an online investment platform for early-stage healthcare companies making a social impact. Our company focuses on attracting investments, feedback, knowledge, and collaboration within the massive healthcare community. RedCrow operates in the fin-tech space and acts as a platform that can process direct investments, but our core focus is building the ultimate social community in healthcare. RedCrow is where those early-stage entrepreneurs have a place to not only market to the masses but also receive vital feedback from healthcare industry experts. We say, “Knowledge is power” and “Invest in what you know” — with RedCrow, these mantras are the very foundation of why we created a company that is addressing this void in the funding process. Where does a company that has the chops to make it and save lives go when the traditional institutions refuse to write the check? How do accredited investors, not part of a family office or a venture firm, gain access to the early investments that we have all heard about? Jerry and I built RedCrow to be that marketplace and the definitive solution for both companies and investors.

RedCrow has received the attention of some very large names in healthcare who are looking to collaborate as they see the need to fund exciting, new innovation. And what better way to really know if something will work than to let the crowd have a voice?

RedCrow is disrupting the early stage investing model in healthcare and given that there is currently no reliable solution for these game-changing companies, we’re the ones moving the conversation forward.

RedCrow is addressing a void in the marketplace by creating a model for start-ups to be successful — and it is the pursuit of filling that void that will always drive me.