In This Issue:
- The Crisis as a Catalyst
- Q&A With Barbara Clarke
- Project W Female Founders on the Frontlines
- How to Secure Venture Capital for Femtech Startups
The Crisis as a Catalyst
COVID-19's promise for improving women’s health
By Darby Allen
Counsel, Healthcare Group, Davis Wright Tremaine
Project W leader and Counsel in Davis Wright Tremaine’s Healthcare Group, Darby Allen was inspired by her friend, mentor and professor Kathleen Rubinstein to pursue a passion for health policy. As Darby considers how once-in-a-generation health policy advances occur during times of strife, she shares her predictions on how the COVID-19 pandemic may propel positive change in health policy in America, particularly as it relates to issues of women’s health.
My introduction to healthcare policy was watching The Affordable Care Act be debated and ultimately passed in the United States Congress. The number of uninsured people in this country skyrocketed as the Great Recession took hold, and President Obama’s signature legislation offered meaningful alternatives to traditional employer-sponsored healthcare, such as expanded Medicaid eligibility and improvements to the individual health insurance market through establishment of the exchanges. A recent study by the Kaiser Family Foundation estimates that nearly 30 percent of nonelderly adult women have a health condition that could lead them to be denied coverage if the ACA’s pre-existing condition protection were overturned. But despite these and other huge policy leaps forward, the ACA remains a patchwork over our archaic and fractured healthcare system.
The COVID-19 crisis could be an even bigger catalyst for change in healthcare. I see three ways the health policy landscape may change for the better for women in America once the dust settles.
The structure of the American healthcare delivery and payment systems today still leaves open for debate whether healthcare is a fundamental right or a privilege in this country. Yet the stimulus acts and Department of Health & Human Services provider relief efforts have effectively established that testing and treatment for COVID-19 is a fundamental right through coverage, waivers of co-pays and deductibles, and out-of-network balance billing protections for insured and uninsured patients alike. Even undocumented immigrants – a group that faces significant barriers in access to coverage through Medicaid and federally backed premium subsidies in the individual market – are eligible for no-expense testing and treatment.
We have quietly and with bipartisan support achieved near-universal coverage for coronavirus at no expense to patients. This is huge. From a policy perspective, what makes COVID-19 different from other healthcare treatment? People are no more at fault for developing breast cancer than they are for contracting the virus, and yet crushing medical debt is the reality for many uninsured and underinsured people in this country who are blindsided by a cancer diagnosis. If the COVID-19 policy measures are successful, there may be an opportunity to expand coverage more broadly and improve women’s health in the process.
Improving Access Through Virtual Care
In recent years, 14 percent of women in America reported they went a year without seeing a doctor due to cost. As another Kaiser Family Foundation report reveals, the results are even worse for women of color where the numbers climb to 17 percent for Black women and 22 percent for Hispanic women. The health and wellness impact of the lack of affordable access to a doctor is obvious.
The pandemic presents an opportunity to change these statistics through the explosion of telehealth and virtual care delivery models. The American healthcare system seemed to transform overnight in March when the entire industry started embracing technology to keep patients out of physical care settings where they might spread or contract the coronavirus. I often joke with my colleague and telehealth guru Adam Romney that his time has finally arrived after a decade of quietly toiling in telehealth. Payors, providers, and regulators alike are aligning to give patients access to care providers through their phones and computers. Aside from the potential cost efficiencies in providing care virtually, if public and private insurers maintain expanded coverage for virtual care, we may be able to improve the access statistics by enabling women to “see” a physician without having to take time off from work to travel to a clinic or find childcare. Women’s health advocates and industry stakeholders have an unprecedented opportunity to impact the healthcare of women because of this new embrace of virtual care.
Spotlight on Racial and Ethnic Health Disparities
Our country is having a painful, raw, and long overdue discussion about racism and inequality at the same time that COVID-19 is killing people of color at a shockingly disproportionate rate. The coronavirus isn’t the first health condition to attack people of color though. According to the CDC, Black, American Indian, and Alaska Native women are two to three times more likely to die from pregnancy-related causes than white women. There is no reason this trend has to continue. As long as COVID-19 is in the spotlight, women’s health advocates have a duty to demand action on health disparities facing women of color in all health conditions, including pregnancy.
The COVID-19 crisis has resulted in some gains in expanded coverage, has accelerated developments in telehealth and has put national focus on the disparities in access to healthcare based on race and gender. Just as in 2009 when the ACA was debated and finally enacted, this is a moment in time that holds out a promise for transformative change in our healthcare system. Through my law practice, my passion for health policy and Project W’s collaboration with Springboard Enterprises’ Women’s Health Innovation Coalition, I look forward to being part of the movement that makes that change happen.
Darby serves on Springboard Enterprises’ Women’s Health Executive Committee, a group of experts across the world of pharma, medical devices, digital health and more who advocate and promote greater attention, research, and investment in diseases, conditions, and indications that exclusively or predominantly impact women.
Q&A With Barbara Clarke
Barbara Clarke is one of the most prolific – and intentional – investors we know. She has invested in 12 funds and made direct investments in over 60 companies, all in furtherance of her passion for inclusive innovation. In addition to her many other accomplishments, Barbara is a founding member of Astia Angels, one of the largest and oldest national angel networks, and a member of the Board of Directors of Portfolia and a lead investor in a number of Portfolia funds. We asked Barbara about her journey to become a Super Angel and what propels her to give so generously of her time and money.
Q: What motivated you to get started investing in early stage companies, and how did you develop your investment thesis?
I was motivated to invest in early stage companies because it is a way of using my capital to create the world I want to see and to influence the kind of innovation that I think can benefit the world. I developed my investment thesis slowly over a couple of years. At first, my investment thesis wasn’t even a thesis, it was more like a ‘preference.’ For example, my background is in Economics, so I gravitated towards investing in companies that had a data and analytics component. I am also very interested in women’s health issues, so my ‘preference’ was investing in companies that solved women’s health problems. Since the beginning, I had also ‘preferred’ investing in companies with gender-diverse teams as research has shown that they outperform mono-gender teams. It wasn’t until later that I honed my investment thesis to include the more traditional investor measures and markers of success for early stage companies.
Q: What role do angel investors play in the startup ecosystem, and what impact does that role have?
Angel investors are typically ‘first check’ investors, so they are the company’s first advisors and the gateway to introduce founders to the broader entrepreneur ecosystem. There are pros and cons to the dynamic between angel investors and founders. On the positive side, if you are an experienced angel investor, you are looking at deals all the time. I look at hundreds of companies a year and am constantly cross-pollinating and telling one company about what another company is doing, while providing my expertise and resources. Having the ability to quickly issue spot on behalf of founders and provide tools and recommendations at the pivotal early stages is crucial to their long-term success. On the flip side, since angel investors are serving as ‘gatekeepers,’ they have the power to send out negative signals as well and, unfortunately, I see this disproportionately affect underrepresented founders. The majority of angel investors are cisgender older white men who are not interested in the innovation that is coming out of different parts of our economy. The investment ‘preferences’ of these angel investors have a detrimental impact on certain industries (such as women’s health) and leave behind pockets of underserved segments that will not thrive due to lack of support and capital.
Q: Instead of the negative impact that the investment ‘preferences’ of some investors may have, you are intentional in your choices and invest for impact as well as return. Can you give us an example of how an investment you made had an impact beyond the cap table?
I don’t have that old school mentality that one out of 10 of my investments is going to be my big homerun; I’m always looking for all of the companies I invest in to be successful. All of the companies I invest in may not hit a 10x or 20x return, but they are all going to do well. With respect to impact, I try to make sure all of my investments either help solve a problem and/or positively impact our world. For example, I have an investment in a company that helps farmers maximize the yield from their farms and access large food manufacturers that might not otherwise be available to them. The company’s technology also reduces food waste and water consumption. The company is a great performer in my portfolio and also has an impact, which is the hope for all of my investments.
Q: How much of your investment in a company is money and how much is time?
It really varies, but it’s the whole spectrum. I have written many first-check investments for companies and, since those companies do need special attention and more of my time, I tend to make only one or two of those investments a year. At the other end of the spectrum, I might piggyback off a colleague who has sourced a deal and, even without experience in that area, I invest because the company sounds interesting and a trusted source has vetted them.
I would also note that this dynamic can change over time. For example, a company that I invested in where I do not have any expertise needed a CFO and I had a referral for them. Also, first-check investments might require more of my time upfront, but as they grow and perhaps other investors take them to the next level, my involvement becomes more limited.
Q: You invest to influence change in the world and promote diversity. How do you source your deal flow to identify those opportunities, and what are the key factors about a founder and her company that drive your decision to invest?
My main vehicle for sourcing deal flow is networking. I have relationships with various accelerators, organizations and other investors. Although I typically utilize a network-based approach, I always put the signal out that you don’t need a warm referral to connect with me, and I take plenty of cold referrals.
I try to ascertain whether the solution addresses a market that is sufficiently large and if the product/service has a pathway to capture that market. But, what makes a company investable is always the team and the people—no matter what.
How to Secure Venture Capital for Femtech Startups
Director of Research and Marketing, HTD
Women's health remains an underresearched and underfunded area in our healthcare system. However, femtech startups are developing solutions for health issues unique to women at all stages of their life cycles. In her role as Director of Research for HTD Health, Project W community member Elise Mortensen writes frequently about femtech companies and the opportunities they are addressing and the challenges they face. Elise wanted to find out why femtech companies have trouble gaining traction in the venture capital ecosystem. To answer that question, she interviewed several members of the investment community to determine whether the "femtech" characterization is helpful or harmful when pitching to investors, to understand how to effectively structure a pitch for a femtech business, and to learn how to evaluate the "right" investor for a femtech company. We are honored to have thought leaders like Elise in the Project W network, and we are pleased to share Elise's recent article in which she provides insights as to how founders of femtech companies can capture the huge opportunity in the women's health market.
- IBM Hyper Protect Accelerator
- Black Founder Startup Grant
- Our Girls, Our Future Program Talent Accelerator
- Lightship Capital's Twitch Pitch
- Techstars Anywhere Accelerator
- Google for Startups Accelerator for Women Founders
- DivInc's Social Justice Innovation Accelerator
- Empire Startups Financial Wellness Pitch Day
- Visa & IFundWomen Grant Program for Black women-owned businesses
- The Future of Work Grand Challenge