Investment Perspectives, Insights, & Increasing Representation With Leaders Changing the Face of VC | LSI Europe '23

This panel explores diverse investment perspectives and insights with regard to fostering increased representation and inclusivity within the Medtech ecosystem.
Kwame Ulmer
Kwame Ulmer
Managing Partner, MedTech Impact Partners
Tracy Dooley
Tracy Dooley
Partner, Avestria Ventures
Nicole J. Walker
Nicole J. Walker
Board Director, Venture Investor & Advisor, Multiple Companies
Esther Reynal de St Michel Richardot
Esther Reynal de St Michel Richardot
Founding General Partner, THENA Capital



Kwame Ulmer  0:05  
So I want to thank Scott again for the opportunity to have this conversation at this time in lovely Barcelona. Last time, we did it in beautiful Dana Point. And as we were talking about this panel, we agreed it was going to be a conversation, we're going to have three parts, I'm going to share a few statistics that are germane for this conversation, then the four of us are going to have a conversation between us kids. And then if there's questions from the panel, we'll, we'll round out the conversation this morning that way. But first, some numbers. In the industry that we love so much the medical device industry, African Americans represent 3.4% of the leadership. And that is at all levels. 2% of funding goes to women led startups. And approximately $1 billion has been invested in women's health technologies. And wait for it 4.3 trillion is invested in the healthcare ecosystem. So 1 billion versus 4.3 trillion. So that grounds a conversation and tries to express the opportunity, I believe that we have to move the needle in the right direction. And all of us are doing it in our own unique ways. And to start the conversation. I was going to start with Nicole, and ask you what investment trends have you seen over the years, particularly with the lens of DEI and, and what do you think works well?

Nicole J. Walker  1:51  
So I would say that over it, it's been a continual progression, I would say, at the beginning of my career, there was a lot of discussion around how do we make treatments more accessible, especially chronic conditions for different populations that may over index to those chronic conditions. So if you think about something like diabetes, whether we're talking about it in the US, or even outside of the US, we see that index much higher and communities of color. And we know that something like that also leads to higher contention or higher percentages with hypertension, things like that. So then we started to migrate from not just having better treatment therapies, but really starting to think about, Okay, what does access really need to look like? And those discussions started more around cost of care and how our different payment systems maybe were, in an had an imbalance associated with them? And I think now more of our discussions are really, yes, we have to get better therapies for different populations. Yes, we have to increase access, but there's something about culturally appropriate care. And that's a term that we use, maybe more so in the US a little bit. But you have, I have started to see we have started to see more discussions, more funds, more programs and opportunities focus around when you are talking about delivering care, when you are designing a therapy, even when you're looking at what type of questionnaire you should use, it is not a monolithic problem across the country, there could be cultural differences. But there can also be regional differences. Something that I might use in a rural setting, may be have a completely different need than in an urban setting. And so when we've started to look at diversity, equity and inclusion is become a much broader discussion, I think, which I love, because I always was a proponent in DEI, and still am a proponent in our industry, that it's not just about the ethnic diversity or the gender diversity, it is about the full diversity of what you need to have at the table. And I think health care out of all of our our potential industries in the ecosystem is the place where that touch point really become critical and that discussion.

Kwame Ulmer  4:30  
It makes me think, and then I will be I would really be interested if you have any thoughts not to put you on the spot, Esther, her about what it looks like in the UK or in the EU more broadly, because in the US we do talk a lot about cultural competency from an ethnic lens. Afeezah Mohamed, who was a keynote speaker or as panelist at Dana Point has a mental health solution with cultural competency baked into it through an ethnic lens. But there's neurodiversity. There's gender, there's all these different lenses in which you can look at cultural competency. Do you look at it differently or have a particular point of view from your spot in the UK?

Esther Reynal de St Michel Richardot  5:16  
I think it's, it's interesting. And if I come back to the stats you shared, I think the picture looks exactly the same in the UK, right? 2% female founders upon 4%, to black funded companies. But when it comes to, to healthcare, I think, two years ago, there's been this massive report and study done by the government. And the UK has come across as a second worst country amongst the G20 for their gender healthcare gap. So that was a big bit of a shock. They did a deep dive, build a strategy, and we started seeing some changes on the agenda aspect. And I think we've been talking a lot about that, then some bit more investment going to woman's health, the FemTech sector is becoming more visible, although it's, I think only 2% of the digital health funding going to women's hands. But coming to your point about ethnicity. Every time I hear about those analysis is us is coming from the US because I think it's more the problem is more pregnant, and there's more. There's more awareness about it. However, with AI coming and being, you know, everyone in the healthcare is thinking about how are we including using AI and the negatives of it? There's a lot of thinking on, especially in the NHS side, how are we collecting data? Making sure we want to do so much with the healthcare data. So how are we collecting and making sure we don't have biases, so we can highlight the inequalities? And we can look for solutions, right? Because I think and we'll talk maybe about it later, is the power of collecting data to find solutions around diversity and equity. So I think it looks like this that we are earlier in the journey. It's all about identifying our biases, how are we solving them, and getting stronger data? I think that you have in the funding side, you have more funding, specifically for women's female entrepreneurs, female startups, you have really few Angel networks or funds for black founders or ethnic minorities.

Kwame Ulmer  7:48  
You know, you made me think of two things. One, at the fund where I'm fortunate to work at, over the course of I would say two to three months, we met with no less than four, I think five, menopause, menopause, medtech companies, and it got my head to thinking like, Is this a real trend? Are there more VC dollars, and then when I started looking into the amount of capital going in to women's health solutions, it's still a small number. But it seemed like maybe a ray of hope. So that was one thing that you got me thinking about. And then I remember, I worked at the FDA from 2002 to 2014. And I remember for that entire time, when we looked at clinical data, we never asked about ethnic diversity. We did not ask about ethnic diversity. We didn't ask about, you know, distribution, maybe we asked about the distribution between men and women. Now, their specific language and breakthrough application to give you credit, if you're addressing health disparity, and with the potential T-set additional reimbursement, if you're breakthrough, and if you're breakthrough, you may be looking at ethnic diversity, and therefore you may be rewarded with reimbursement. So I feel like those are some green shoots, but I don't know if anyone, what do you think? 

Nicole J. Walker  9:13  
Well, what I was going to add, so I think you make an excellent point. There's there's the aspect of gender diversity and making sure that we are addressing more health issues that are specific to women. But if you look across healthcare, I would argue that we can identify conditions where women index have more heavily than men. But our clinical studies don't reflect that. I sit on the board of the Alzheimer's Association in the US. Women are diagnosed with Alzheimer's at a higher rate than men, people of color index at a higher rate for Alzheimer's than non people of color. But the clinical trials don't reflect that. And so I think it's true really important in our discussions, again that when we're talking about the diversity that we're really sitting in those boardrooms challenging each other about for this condition, are we being reflective of the population that we're trying to serve? Or, and I will admit, I've been guilty of it, are we trying to complete this trial as soon as we possibly can, so that we can make it through the FDA as soon as we possibly can, or whatever it may be, so that we can get to market and we'll worry about that on the back end. And I think that is the push and pull in our industry more than anything else.

Kwame Ulmer  10:34  
Absolutely. We can start rattling off all these conditions where people of color are impacted. I'm thinking about solutions for autoimmune conditions like lupus and black women are impacted more. Tracy, when we were prepping for this, we talked about secret sauce. And I wanted to learn more about your fund and how you think about the role of women led companies and your strategy and your secret sauce. Absolutely.

Tracy Dooley  11:01  
Thanks so much Kwame. I think this is a great lead in and so an investor we invest in female founders and healthcare life sciences as well as women's health. And we define Women's Health very broadly. Because really, I think we should be talking about health care. Women's Health includes cardiovascular disease, autoimmunity, right, neurodegenerative diseases we've just talked about, right? And then obviously, things that impact women exclusively, you know, like reproductive health and things like that. But when we're thinking about secret sauce, right, I think there's a couple of things that I want to highlight one is being rigorous about your data, right? So I'm gonna bring my clinician hat. So I'm a long way from my clinical training. But, you know, when we think about, for example, something like a glomerular filtration rate, which is a measure of kidney function, right, for black people in the US, right, the thresholds for defining poor kidney function are historically different than what it was for white people. And there is absolutely no biological basis in that difference in threshold. But it makes a real difference in terms of access to care, in terms of who's to find sick enough to get dialysis. And in terms of who's defined, you know, in different categories. So I think that's one piece, right? Where we have to really interrogate? Are we are we sticking with this, you know, historical legacy, way of doing things? Or are we really being rigorous about how we interpret the data, and we think about women in cardiovascular disease, okay, cardiovascular disease is the number one killer of woman. And for one example, you know, the size of a normal aorta, and a man is four centimeters. Now that's generally dilated and a woman, but a woman who has a four centimeter aorta will not necessarily get treated, because she'll be seen as having a normal aortic diameter. So I think that when we think about this, there are real biological differences between women and men, at the cellular level, right, and those translate into much larger differences. So I would highlight that being incredibly rigorous about interrogating the data, really going back to the unmet need, and stratifying your data at the earliest stages, right? From animal models, right from your very early data, the more you can do that, the more you can rely on that and generate improved insights and better outcomes for your patients later on down the road. So I would say that that's number one. From a venture perspective, I would say that, like most other venture organizations, our network is really our secret sauce, right? So before coming to venture, I spent over 14 years as an operator at organizations like Novartis and the Gates Foundation. And so I think that having, having seen you know, people work together, having those relationships, I think that's really important to us. And also with us, it helps that having a strategic mindset of how do you think about helping early stage companies go through this journey to then become attractive to a strategic partner? Right, and that's a years long process, not a month long process. So I would say those are sort of two of the main things that we think about, right. And those are not necessarily unique to women's health, but we've decided that that's an area where there's a huge unmet need. And it's an area where we can be very differentiated in terms of, you know, both our network and also having relationships with the folks who are very rigorous and data driven around that. So that's, I would highlight those two things, you know, and I would also say that we are all here, you know, in the businesses of risk assessment and risk mitigation, and so being rigorous and being thoughtful about how you how you look at your data, how you look at your clinical evidence, can only really impact any organization positively. And I'm happy to see that's a big trend. 

I just wanted to know say that my sense is sometimes and I've had these conversations with other investors, that there's some sort of lowering of the bar if you have a filter for diverse companies with diverse leadership or women led company. And I think actually particularly well, in my experience, there's an incentive to add an additional level of rigor, so that when you send it to the the company to the Investment Committee, you can say, they're going to drive outcomes, they're going to, you know, be able to monetize the solution, they're going to be able to reach patients. And we found that part of it is the diversity in their team that's helping this. So I always think there's a burden is not the right word. But there's an additive incentive to apply that rigor, because I think there is a perception that the skin color, is it enough of a checkmark to take something to IC, but most of the time, we still say no, we're still saying, let's keep in touch, and let's mature this idea. So I can confidently take this to IC. I don't know what other people think about that. But I notice there's a little bit of that subtext conversations.

Nicole J. Walker  16:15  
Well, I think, at least from from our perspective in the US, a lot of those conversations have evolved because our investors, the LPs, have started to challenge, beyond what does your team look like? Are you thinking about the next generation and who we're bringing into the industry? But what do your portfolio companies look like? How are you having discussions with your CEOs? What is your board look like? What is your role in increasing that diversity? So I would I would challenge whether you're changing the lens of what's required in terms of a good opportunity and how you make good returns for your investors. But I do think that we are being challenged as stewards of the capital to say, are you doing enough to really bring more diverse thought, and that's how I look at it is, you know, you have three women on the panel, we happen to be a different ethnicities, but we could all have the same thought process. And that is just as, you know, hampering in a situation as anything else, but I will fundamentally believe at the end of the day, that if you're not doing anything to change the makeup in any given room, that you're not getting the best discussions out of that room. You know, when I came into the industry, 30 years ago, it was a foregone conclusion that the best venture capitalist and I was told this, either had a banking background, or consulting background. And so I should really think twice as a former operator coming into the industry. And I think that's complete BS. Having been a former operator, you have a different lens of what it really takes to build a business entrepreneurs. Some of the best venture capitalists, in my opinion, have been former entrepreneurs, because they've been in the trenches of it, and having those different thought patterns and people who come with different lived experiences, which you will have if you're a different gender and a different ethnicity. All ladders up. And so I think the questions from the LP in them driving it is a push back on us to say, are you really reaching for the best opportunities? Or are you just falling back on your networks that have historically been of one type, and not really maximizing where these better opportunities might be coming from? Yeah,

Esther Reynal de St Michel Richardot  18:35  
Yeah, and if I can jump in there, I think I really agree with budget, what you said about cognitive diversity is really important as one thing that in building THENA Capital we're really conscious about. But we're also conscious that, I mean, obviously emerging managers have stronger returns, because they come with those bright ideas, you have a new team, they have different background, a different network. But as you grow, and as you build your over long term, you either continue doing the same thing, you stop innovating, you stop bringing new people, you stop questioning your network and bringing constantly that new diversity. So I think there's something talking about, you know, it's not about the secret sauce, but we try to always where is going to be where will the fresh ideas and fresh blood will be coming from right and you need to feed that industry? If you want more diversity in VC, for example, where are they gonna coming from so engaging with universities, you know, whether it's Oxford, LSE for the investment side and being there in discussions with investors, with students to show that there is diversity out there and don't be afraid to to continue that, whether it's within pure was, you know, the bioengineering and med tech students was, yes, there will. They are diverse investors out there. So Don't be afraid of, of being those diverse founders. So it's thinking really long term and constantly checking our biases as well. So because I don't think Unfortunately, while I love this idea of LP questioning us, I don't see it. There's so little diversity amongst LPs, which is also not a problem, but you can show all the data you want on better returns from female founders from diverse teams from it's not this, this logical argument hasn't moved the needle fast enough. So they are part of the equation, but I don't think we should rely on them. And we should constantly question ourselves over the long term and question others in our industry, and try and move. And industries, whether it's healthcare, medtech, or the investor side. 

Kwame Ulmer  20:58  
So I think that's fascinating in the US, there are a couple events that have taken place, I'll just rattle them off. And then to your point, how do we grow the LP base that really is interested in this issue of gender diversity, I think diversity is cetera. So one thing that happened in the state of California, remember Arnold Schwarzenegger, California, the governor put in place a mandate for diversity on boards that was subsequently challenged and repealed, There's recently been a lawsuit against a fund that focuses called the fearless fund that focuses on investing in women. So we're seeing a shift in the climate. And what I'm wondering from your vantage point, what, if you think those are problems? What can we do to support more investment in diverse companies? And I have a couple ideas, and then I'm gonna shut up. Is there a non traditional investors that I'm seeing come to fore. And I'm not just talking about Google. I'm talking about Serena Williams, who's very interested in maternal black maternal health issues. And how do we leverage that notoriety that popularity, to convince the more traditional LP base to put more money into funds, like yours, that are investing in these these types of companies? So those are my thoughts, I pause for your reaction.

Tracy Dooley  22:37  
So I was gonna say, I mean, I'm not being an LP, right? I, I'm not gonna say I have the answer to, you know, what is the lever to get LPs to sort of pay attention to this? What I will say is that I have been encouraged by, you know, a lot of I've been seeing more broadly, right, from an FDA regulatory perspective, right, encouraging diversity, I think that we've been seeing in the US from a legislative perspective, the passage of the maternal omnibus Act, which put billions of dollars in incentives on the table for payers to actually pay attention to black maternal health. And then we really saw payers come to the table in a major way and put money into that. And I think we've also seen, you know, in the public markets, for example, more Merck spin out of Oregon, on the woman's health assets, which is now a large public woman's health company, across therapeutics devices, you know, I think that's really important to see is that there's continuity, especially for early stage startups, is that there's a there's an exit point, right? So people aren't going to start somewhere and say, Okay, well, it's gonna be a journey to nowhere, where do I go? Right, there's their support all the way up. So I think that's one of the things from a strategic and from a regulatory perspective, at least in the US that we've been starting to see. I think with LPs, it is challenging, it's going to take longer, right? When we think about institutional LPs, the cheque sizes that they have to deploy are so large as to essentially, you know, make them irrelevant to emerging managers. Right. And so I think that, you know, the role of fund of funds who understand this is really important, and very critical, being able to sort of deploy reasonable cheque sizes into early stage funds. Right. But I will also say that, I think we sit in a somewhat unique place because healthcare is generally very difficult for folks to understand who haven't spent their career in it, and so it's easier to, you know, follow, you know, the tech, you know, the tech cycles and go for something that is very well understood from a consumer perspective, but, and kind of say, well, healthcare, it's going to take a little while, so we don't invest in that. So I think that there are a few headwinds, right. But there's also very powerful tailwinds in the in the industry as well.

Nicole J. Walker  24:52  
And I will say, you know, what's, what's going on with the fearless fund in the US? It does worry me and it's One of the things within the the Venture Capital Association that we are monitoring, I think that may be a particular issue of dynamics that we're going through in the US on many fronts. But I think it goes back to Esther's point of, we have to do better at educating at a very early period in the development, that being an LP being an investor as a potential is a possibility, and what impact that could have on an an area that you are passionate about. And I think that's why we're seeing more LPs like Serena Williams, because she had a particular association with an event. And she put her mind to it that you know what, I'm going to be a part of the solution to this. And so more fun to funds and more mission driven LPs, which I think we're starting to see more of, will hopefully start to have more impact on that. But I think it goes back to the fundamental of, if you don't have a certain level of diversity, and all of these rooms that are making these decisions, then you're not going to get the change rapidly enough. Right. And I think that is our challenge within the industry of how committed are you at the individual level to help make that change happen. And a lot of what we do at venture forward is through that education process. So setting up fellowships working with high school students working with undergraduate students, to help them know, it was a possibility. I didn't know anything about venture capital until I got to grad school, and wasn't really enamored with it. It wasn't until I had a better understanding of after working in industry, of what kind of impact you have as a venture capitalist.

I guess Ester.

Esther Reynal de St Michel Richardot  26:42  
I can just add coming back to your point about peace. I think that's his question in the UK. So we're lucky, we're backed by an institutional investor making a big check in in the fund. But not because we are female GPs, not because we are investing not only in women's health, but in women's health, and not only because half of our deal flow is female founders, right. Not for that for for the whole package, you know, obviously, but they are being questioned. So there they have a program for emerging managers, but they are being questioned their role is to invest in gaps in the market in where you have unbalanced right, where, where the the normal market is not addressing the problems, but they don't have a programs for female funds that black female founders, they don't have a program for ethnic minorities. And why is that? So I think, in the UK, where there's so much money through tax support, etc, to feed innovation, and especially in healthcare. Why are they not making that next step? And they've said, We don't want to, to have those programs yet. There is not a solution. We don't want to target specific group of peoples. So the question is that I think is, so we haven't had a fitness fun issue. But yeah, the question is expanding. So I think

Kwame Ulmer  28:19  
I think it's exciting because we I think we hear loud and clear there's a role for the private sector is a role for government in moving the needle. I also want to acknowledge that we do have some time for a question or two from the audience. So if there's a question from the audience, please feel free.

Nicole J. Walker  28:56  
Can I just add one thing, I think you bring up a great point about location matters. But I also think that how you source candidates also matters a lot. What I've seen sometimes in our industry is that we will go to specific search firms to look for talent. And those search firms have their pool of talent databases. And I'll give you an example from our firm or my former firm, one of our teams was looking for, they want a woman to bring on to the team and they wanted this woman to have an engineering and manufacturing background. And they reached out to the recruiter and they were like, my god, we just can't find anyone. They're just not out there. I happen to be a woman with an engineering background. And I reminded them you never came to me once. I didn't even know you were searching for that person to talk to me about my networks, and what organizations I would go to. So I think that part of our challenge is to open up doors and Really think about how we search for talent, even in a lot of these companies. And I think Texas has has started down that road ahead of healthcare. And one of the challenges in healthcare, and we hear this from a number of firms is that they do want to find more diverse candidates, they don't know where to look a lot of times. And so, you know, it was there is a little bit of a push and a pull on it. But I do think geography matters, and, and how you're sourcing. And if you're challenging your current recruitment teams, to really open up the lens that they're using for those talent pools.

Tracy Dooley  30:33  
I think that's a great call to action, right? Because all of us in our roles as, as decision makers, wherever those are, right, we can, each and every one of us have an impact, right? And I think just as nobody would really try and start a startup with like, five people who want to be CEOs, and you know, no scientists and no regulatory folks, right? You want to have the right people at the table. And that takes a group of people with the right skill sets and the right lived experience. Right. And so I think that should just be as fundamental as possible, right? Whenever you're looking at who's around the table, how do you make sure that you're bringing the right skill sets to the table? And if you don't have networks, right, I gotta tell you, right, you know, like, call me and be like, Hey, who's like your regulatory consultant? Who can get me through, you know, like, the digital health piece? And what have you, you know, because that's not my area of expertise, but leverage the people who, you know, right, who have those networks, because then we're all stronger together.

Esther Reynal de St Michel Richardot  31:26  
And, and I think that's what sorry, just to finish on that. The role of the investors to ask those questions, have you thought about your locations to solve that have? Are you thinking about diversity? Okay, you're just five now, but how are you going to grow your team? What's your angle? And sometimes we and we have founders coming to us and saying, Yeah, med device company, all male, that's typical, you know, look around the room. But can you help us have a diverse board? Can you help us hire differently? So I think it's investors have a role to play or support with networks as well.

Tracy Dooley  32:10  
And I will say, you know, we also invest in men, right? But when you have folks who are really interrogating the unmet need, thoughtfully, that's a very impressive thing, right? Rather than people are saying, Hey, I'm gonna check the box here. Right? So

Kwame Ulmer  32:24  
We have another question.

I love it. I love it. Any reactions to that?

Nicole J. Walker  32:39  
No, I think that's, that's why you do see funds, like those who have an affinity for women's health issues, they are, they do tend to be more proactive around those exact types of things and, and go to or try to, to locate those entrepreneurs, those clinicians and those researchers who have particular expertise in that. I appreciate you for it. And I think that is why it is really important for us to support those funds who have a specific focus, whether it is based on gender, or based on ethnicity, because there are conditions that will over indexing those areas. And that's why the discussion is really important. And in the US why we have to keep fighting, to not look at it as an anomaly for anomaly sake, that it there are biological and clinical reasons why it's a particular focus and a particular need in our market.

Kwame Ulmer  33:37  
Um, looking at, oh, we have two minutes. This is wonderful monitor technology. So in the remaining two minutes, I'm thinking we can leave the audience with a thought. No pressure, Esther. If you have one piece of advice, maybe an action or something that you want us all to think about more deeply. What would that be?

Esther Reynal de St Michel Richardot  34:03  
I think I think we've mentioned quite a few things, but I think it's just about as entrepreneurs or senior management or investor is all question, what do we do? Whether it's in designing our clinical trial, whether it's in our hiring to, to be more diverse, and and then you'll get everyone who will get the benefit of it. And to be an coming back to your point on on a woman's house. I think it's there shouldn't be a woman's house is a whole house care. Should as as meant to look after as many men as women. So that's my wish is all healthcare, not just women's health.

Kwame Ulmer  34:51  
I love it. Tracy.

Tracy Dooley  34:52  
Absolutely, completely agree with that. I think, you know, we've talked a lot about calls to action, I would say, you know, Just as when you think about starting a company, right, you're looking at an unmet need, really look at the unmet needs, be focused on the fundamentals and apply that you know, to what you're doing and how you operate as well. Because I think when you're constantly interrogating, really trying to understand how to mitigate, or how to assess and how to mitigate those risks that you have, you know, it's only going to help you build a more robust team, a more robust business and be more successful. So I think all these things are part of that broader conversation and should essentially be standard. 

Kwame Ulmer  35:33  

Nicole J. Walker  35:37  
So I would leave people with, we are in and I think we said this, we're fundamentally in the business of risk, both as investors and an entrepreneurs. I'm in this industry, because very early on, someone took a risk and made a bet on me. So my ask of everyone would be, you know, when you have these decisions, take a risk. Get uncomfortable, make the bet on a person or mentor the person who might be the least likely choice, but might have the highest potential and, and be the person with the most different way of thinking about how to solve any given problem? Because that's the way I think we change these discussions and accelerate what we talk about in terms of diversity, equity and inclusion.

Kwame Ulmer  36:32  
I couldn't think of a better way to conclude our panel. Thank you so much, Nicole, Tracy and Esther and thank you all for waking up early to have this conversation. Have a great conference.

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