Magnetic Potential: Paul Burton of 2Flo Ventures

Learn about this African-American entrepreneur and how his startup studio and venture capital firm is reshaping the healthcare landscape

From the moment I met Paul Burton, J.D., the founder and managing partner of 2Flo Ventures, as part of The Just Society, I wanted to know him better. Paul is a dynamic leader, and his energy is magnetic. He’s a veritable Renaissance man, with a law degree and a background in investment banking and science. His venture capital firm, 2Flo Ventures, aims to transform the healthcare landscape, advancing innovations that impact the disenfranchised while addressing the lack of African-American participation in healthcare innovation. Is it any wonder we hit it off? When Paul asked me to join 2Flo as an advisor, I immediately said “yes.” I’m honored to work closely with Paul and his team — and to call him my friend. In honor of Independence Day, I’m celebrating Paul’s vision and independence with this Q&A. I hope you enjoy learning about his changemaking vision as much as I did.

About 2Flo Ventures: A Catalyst for Health Equity

Rod: How would you describe 2Flo Ventures?

Paul: It’s a venture capital firm for healthcare startups. We aim to improve equity for all and improve fairness within our healthcare system.?

What inspired you to launch 2Flo?

There were a number of factors. There are big disparities in our healthcare system. In our working hypothesis or theory for why these disparities exist, is the fact that for many years, including our modern day history, the African-American population did not participate in innovative healthcare. We invented a few things, but we haven’t participated in a meaningful way. Less than one percent of venture-capital-backed healthcare startups are led by African-Americans.?

Healthcare solutions are very specific. Many healthcare solutions tend to be suboptimal for our population because we’re not participating in their development. We wanted to create an environment that promoted inclusive innovation — that promoted African-Americans participating in innovation and creating a welcoming and collaborative environment where people can be their best and contribute to innovation.

You founded 2Flo to ensure all populations are included in venture capital. Can you tell us more about what you’re doing?

Billions of dollars go into developing healthcare solutions every year, and African-American entrepreneurs are allocated only a small fraction of that. Our efforts here are to create value with what we have — to make investments that grow substantially and that warrant greater investments in the future. Investments in healthcare solutions that target our disadvantaged populations are needed and will substantially reduce the cost of the healthcare system. That would be tremendous growth, and it’s not going to happen overnight, or in a decade or even in the next generation. In order for it to happen in the future, we have to make some investments that generate significant positive returns now. That’s what we’re focused on. We’re participating in our capitalist system in a way where others see it and want to join us and invest in us because they like the returns we’re providing. We’re generating profits while serving an underserved population that’s going to grow significantly over the next 20 to 30 years.

How do you mitigate risks as a venture capital firm?

In the typical venture capital firm, nine out of 10 investments fail. Some people would say they have a one out of 10 success rate. Nonetheless, they make so much money, they can generate a 20% to 25% return on investment on an annualized basis. Whereas for the past 100 years, a typical return on investment for public equity has been about 8%. Thus investors accept the venture capital business model given the improved returns. Nonetheless, that tends to create a scarcity mindset within startups that’s hypercompetitive. There’s a lot of backbiting. Who wants to be part of that?

What we’ve learned is that you can create an environment where more companies are successful if you provide the companies with more active, hands-on, day-to-day support. We do that right now with our advisors, partners and employees. We get involved in the day-to-day operation of the business, and they get the benefit. It’s collaborative, not adversarial, and the information flow is much better and faster. So is decision-making, financing and addressing challenges. Everything's better when you bring that experience into a business and create a positive environment. This is referred to as a “start-up studio” business model.

Is there a success story you can share?

One of our portfolio companies, Cancer IQ, makes it easy for health systems to use genetic information to get ahead of cancer at scale. The company was founded by a very diverse team, which included a mother and daughter. The mother, Olufunmilayo (Funmi) Olopade, is a professor at the University of Chicago School of Medicine. She’s a MacArthur Genius Fellow — essentially a certified genius. She’s on the board of a number of prestigious organizations in the Chicagoland area, and she’s an internationally renowned scientist with expertise in the area of oncology. Her daughter, Feyi Olopade Ayodele, earned her MBA and undergrad degrees from The Wharton School. She’s CEO of the company. We’ve helped them with a few rounds of financing. Their series B round of financing was led by Merck, Amgen and HealthX Ventures. With that quality of investors and strategic partners, the company is on an excellent trajectory for success.

What do you love about your 2Flo team?

Right now we have 45 advisors. There are four partners and a number of fellows, interns and full-time employees. We're diverse in terms of ethnicity, age, gender and geographic locations. We have employees in their 20s and employees with 25+ years of experience in the field. We really do emphasize experience. You need to be working in a field for an extended period of time to know it all, do it all and innovate off the base knowledge you’ve acquired. We recently brought in a new partner who’s a woman, Charlotte Jones-Burton, M.D.

Tell us more about Dr. Burton.

She’s going to run our efforts to advance the development of the products of our portfolio companies in the lifestyle space. She’s done that very successfully in the past. She was the senior VP of product development and strategy at Chinook Therapeutics, which was recently acquired by Novartis for over $3 billion. In a year and a half, she substantially improved that organization’s structure and processes, and she helped them advance the development of their product to the point where they became a very attractive buyout candidate. She’s already begun to do that for us with a couple of companies. She’s a nephrologist (a kidney specialist) and she also has significant experience in cardiology and heart disease and happens to be a co-founder and president of Women of Color in Pharma. She has phenomenal management experience, too. She’s a change agent.

About Paul: A Modern Renaissance Man

I aspire to be like you, Paul! How did you come to be such a Renaissance Man?

When I was a junior in high school, it became apparent to me what was going on in the world around me, and I became super-intentional and pretty serious. One step led to another.

I’ve tried to live up to my ancestors’ hopes and dreams. I’ve felt an obligation to do right by them — the sacrifice they’ve made and the struggles they’ve endured. I want to make a positive impact on mankind and on the African-American population in particular.?

Take me back to how you started. What was it like growing up??

I grew up on the Westside of Chicago, in a big family that had migrated from Mississippi in the ’50s on the heels of the Emmett Till murder. Shortly after that happened, multiple branches of my family decided to get up and steal away north. A good chunk of us landed and stayed in the Chicagoland area. I grew up in what I call “the hood,” but I just thought of it as my neighborhood, and I thought I was middle class. Later on I learned it was a poor neighborhood. But I was fortunate to have great parents, a mom and dad who really loved me and my three siblings. They did the best they could to pay for us to go to Catholic schools as long as they could.?

I attended the University of Chicago for undergrad as a commuter student. College was not a heavy-duty expectation for me, but once I was there, I was determined to graduate, and I figured out a way to do that. I was fortunate to have a great job as a lab assistant in the pharmacology department at the medical school, which really propelled me and gave me access to phenomenal mentorship.??

My particular focus was civil rights. I had seen a lot of injustice and wanted to do something about it and participate in the transformation of impoverished communities like the one I grew up in. I joined the Army ROTC program, served as a lieutenant and graduated at the top of my class.?

Later, I attended law school and found my way to business school as well. I earned both a J.D. and an MBA. I worked for Salomon Brothers as an investment banker. I joined them as a summer associate, and they offered me a position to return to upon graduation. I worked for Salomon Brothers offices in New York and London. It was a whirlwind experience, and most of the time it was pretty surreal. I often had impostor syndrome. I’ve learned to live a life that was very different than anything I’d imagined.

You’ve told me before that your mom played an important role in your life. Tell us more about her and her role in your development.

She had a front-row seat. She and my father helped instill my values. She’s my biggest champion. She’s a feisty, tough woman who has always stood with courage and bravery. I remember once when I was in grammar school, we were living in the West Garfield Park neighborhood. My dad worked the evening shift and my mom drove a school bus for a living. Once a criminal boarded her bus with a knife and tried to get her to go someplace with him. She had a young lady assistant on the bus with her, and the kids had already been dropped off. So she drove the bus to the front of our home, got out and fought with the thug right there. He ran away. You don’t want to mess with her! I’m blessed to have a lot of her in me.

Looking back, what advice would you give your six-year-old self?

I’d say: Be patient with yourself. I’d like to have been happier with myself at a younger age.?

As I got older, I got more and more serious, and it created a lot of internal stress. I developed Lupus at age 20. Lupus is an autoimmune condition caused by stress, but you have to have a genetic predisposition. Now I manage my life with meditation and exercise, and I’ve been in remission ever since. Who says you have to be uptight to accomplish things? You can be driven and also have empathy and patience with yourself. At the end of the day, I learned to accept what I can’t change. With regular meditation and a strong faith in God, my life’s path has been like a dream. I have truly been blessed, and we have so much more to do for others.