Owen Willis, Opal Ventures | Interview at LSI Europe '23

Transcription

Owen Willis  0:00  
My name is Owen Willis. I'm the founder and general partner of Opal Ventures. Opal Ventures is a pre-seed Health Tech fund. We're backing founders building out of lived experience in healthcare and health tech. And we're focused on increasing access to care in the US. We're really interested in three verticals of healthcare. So number one, we want to back companies that are making it easier to drive revenue for these large healthcare organizations. Number two, we're really interested in companies that are increasing access to care to underserved populations. There's a whole layer of infrastructure that needs to be built there to serve about the 70% of Americans who have pretty crappy access to healthcare. And then number three, we want to keep more clinicians in practice, right? How do we maintain that workforce of frontline healthcare workers? it's not about putting ping pong tables in the break room, it's about giving them the tools they need to do their job, and have them spend more time with patients and less time on paperwork. I started the fund in January of 2023. And the fund is really the culmination of the past several years of work that I've done in in the healthcare space. So I started my career in health tech, as CEO of Osmosis, which was a medical education startup, I joined at precede I was there through post Series A, and I let our b2b go to market. And that was a big lesson for me and kind of what it takes to actually sell and healthcare. And selling and healthcare requires insider knowledge on the incentives that drive decision making. And it requires network access, right people who are willing to make those warm introductions for you, and able to facilitate those new relationships. And so we were able to capture 22% of the US med school market in 18 months, using our network of mentors, our strong product, and student ambassadors. And so after that got, osmosis got acquired by Elsevier, I started a health tech community to help early stage founders with those same tools that I had used that osmosis, right, so the idea was, ideation precede sage health tech founders, we wanted to give them access to mentors, the ability to get to market faster and to do so with while making fewer mistakes. We had 300 People go through that experience at ondeck health, we had 64 companies come out, those 64 companies have raised a combined total of $250 million in early stage funding. And that was the foundation for building this fund. So we are a community driven investing vehicle. So I utilize my community of healthcare experts, founders, operators, both to source deals, and also vet deals, it gives me an edge, just really digging into some of the tougher spaces in healthcare. And then post investment. I'm using that network to facilitate introductions and help founders get to market faster. And so you know, really, as I've put together this fund, it's really that that culmination of all of those experiences those lessons learned from both being an operator, but then also seeing hundreds of founders go through that early stage building experience. My job is really facilitating those introductions, right to help founders get access to people who can really get them to accelerate their go to market. So on my end, where I personally have founders is in that nitty gritty of tactics around sales. It's kind of being a part of the the contract negotiations with these these large providers. You know, yesterday, in between sessions, I was texting with three different founders who are negotiating contracts with providers, and just kind of walking them through and helping them redline the agreements to figure out, what should they be saying yes to what should they be pushing back on? What's important? And then how do we turn those pilot agreements into contracts in six months? But you know, I think within healthcare, as I said before, a lot of it is about those little that little bit of insider knowledge about how decisions get made. And then it's about who are the people who can facilitate a warm introduction to you, for potential customers. And so where I help founders that are in my portfolio, is I will make those those early introductions to healthcare executives. I'll make those early introductions to folks who have built and sold in that space recently to give folks the edge and figuring out how do they get their first customer, their second customer, their third customer, oftentimes with with limited traction. At LSI, I mean, there's, you know, these events are fantastic, right, you know, you get a bunch of really incredibly smart people together in a beautiful location and you just, it's almost like letting kind of atoms collide off of each other and kind of seeing what comes out of it. On the founder side, I mean, you know, some of the companies that are building right now that are presenting at LSI, you know, it's borderline science fiction, right what they're able to do. And so I think the thing that I get really excited about coming to these conferences, is seeing the technology that's going to be in used with patients in 2 3 4 or five years, right? It's really, really incredible seeing the innovation that's happening in the med tech and med device space. from an investment standpoint, what I'm looking at, I'm really interested in in companies that are focused on remote patient monitoring. And I'm really interested in companies that are building kind of software layers for devices, right ways in which we can continually optimize the data coming out of these devices, the ways in which we can improve these devices, so that we can increase patient utilization and patient adherence. And then, you know, on the on the RPM side of things, you know, my one of my big focuses on underserved populations is rural healthcare. And I think remote patient monitoring is going to be really important in terms of making sure that we're getting patients access to the care they need when they need it. Because when you look at a patient, you know, let's say, you know, strokes or cardiac care, there's a real difference in the quality of care that somebody can receive, if they're living in a city with a major kind of research hospital versus, you know, out somewhere in more of a rural community. And so, bringing that experience a little bit closer together, I think a lot of that's going to be done through technology and RPM tools, specifically. And then on the investor side, I mean, there's some fantastic investors here, it's always great to compare notes. You know, one of the things that I always want to make sure of is that, you know, any room I step into, like, I am not the smartest person in the room, right. And what I've seen here is a they're just some brilliant, brilliant investors, many of them with strong operator experience, who are, you know, already helping these these companies, you know, unlock new partnerships, increase their ability to go to market. And so much of that happens, both through kind of like the scheduled events that are happening at LSI. But also those random chance encounters you get at the bar, or at the cocktail hour, or just the person you happen to sit next to at dinner. So I think that's what makes it really, really special. I think, founders when they're thinking about fundraising, it oftentimes feels like a black box. Right? They give their information to the investor, sometimes the investor responds, sometimes they don't, sometimes they get a yes, sometimes they get to know, right, and oftentimes, the know doesn't really come with a lot of constructive feedback. And so, for founders, there's two things to consider. So number one, is understand understanding why investors are constrained around the ways in which they make decision. So it's just understanding a little bit of how investors fundraise, right? How they're thinking about their capital and their capital allocation. And then what they actually need to do to be able to return their fund, right? So investors are beholden to their LPs, their job is to drive returns for their LPs. And what that means is, even if they really like a company, if the financial modeling doesn't quite make sense, they can invest, right, and I think sitting on this side, I've been on the, on the fundraising side of the table on the on the company side, on the on the investor side of the table, you see lots of companies that you love, but at the end of the day, like, you are not going to be able to return your entire fund, based on that investment, maybe it's because of the valuation, maybe it's because you know, that they're gonna have to raise a lot of money in the future to kind of go through commercialization. And so your ownership is going to shrink. Maybe the fund size is too small to invest in a specific space. Right. And I think just understanding a little bit of those dynamics on kind of the investor side, and kind of what their constraints are, is valuable. On the other side of the table as a founder, you know, I think really, it's about understanding that capital is a commodity, and the founder actually has something that's really valuable. Right? You know, anyone can have money. And and you there's essentially unlimited money out there in the world. Right. And so as a founder, you should really be focused on who are the people that you're getting on board that really get what you're building? Right. And so I think there's a definitely an element of qualification that you should be doing around, you know, how much does this person really care about this space? How much do they really understand and how can they help me? You know, beyond just the money, be get to kind of the next stage of building and then I think the other the other big thing is, you know, is this person going to be able to make introductions to investors? As in the future, that are going to allow me to raise that next round of capital. You know, the first event, I was really early in building my fund. And you know, I think the thing that was so powerful to me was how welcoming the community was, right? It's, you know, I was kind of a new face, I was just kind of getting my feet wet as a as a new fund manager, I, when I came to LSI, it, it felt like I was like, with my people, right. And I think that was a just a really powerful moment for me, right? Building a fund is actually a pretty lonely experience. Right, you're out there, fundraising, you're getting no's all the time. And but being in this community of folks who are just incredibly smart, incredibly passionate, really driven, to change the way that kind of health care is delivered. That really was inspiring for me, you know, in the next six to 12 months, we're going to be deploying fund one, right. And so the focus for me has shifted towards meeting fantastic founders, and helping the the founders in my portfolio, get to that next stage of building. So ideally, we'll have one to two companies that are raising their next round of funding. And we will be starting to look at raising fund to fund one small fund, it's $10 million. I like to describe it as kind of an agile fund, maybe a bespoke fund, if I'm feeling fancy, but, you know, fund II, is going to be much more focused on leading pre-seed rounds. And it's going to enable me to expand the team pretty significantly. So I'm looking forward to that. And then I think, also, it's the, the thing that is so much fun about this job is you just get to spend your time meeting really cool people who know way more than you do about very specific areas of healthcare. And so I'm just excited to continue doing that as well. I'm very much a values driven investor and Opal Ventures, this is true. In terms of the the investors that I work with, right, the people who are my LPs, I want to be values aligned with them. Right. And, you know, this is true for the founders that I work with, right? I want to work with people that I believe are fundamentally good people. And, you know, this was true back when I was at Osmosis, right? So when I was at osmosis, we lead every sales call with our values, we were values forward in our in our sales approach. And it was a huge differentiator for us with our competitors. Because we were able to say, right away, this is what we stand for. This is what we're excited about, this is what we're passionate about in this space. And if you as a as a medical school, care about the same things as us, we're gonna have a really good working relationship together. And I think that's very true on investing as well. Right? LP is investing in me, that's a 10 year 15 year relationship, right, we want to, I want to know that we are aligned in terms of how we see the world and how we make decisions, and how we build relationships and trust with the founders that I'm working with. It's the same, right, this is a long term relationship. They're entrusting me to be on their cap table. And it's I think it's incredibly important on both sides to make sure that we're on the same page about how we operate. And so organizationally, Opal Ventures has a couple of things that we really, really focus on. But the two I want to highlight that I think are relevant here are number one, you know, our first value is respecting the risk, right? LPs take a huge risk, putting money into a first time fund manager. As a fund manager, I'm taking a risk on the founders that I work with, and founders are taking a risk on me. Right? And so making sure that I'm respecting that risk. I'm showing up I'm doing I'm doing everything I can to help the folks that I'm working with is incredibly important. The second one that I think is relevant here is maintaining a beginner's mindset. Right. I think one of the challenges when you spend a lot of time in healthcare and health tech is that it's pretty easy to become jaded. Right? It's pretty easy to see kind of, you know, I've seen 10 companies do this thing. It hasn't worked. So this 11th company, just, there's no there's no chance. And I think one of the magical things about being at at LSI is that you're seeing founders taking wild swings, right? Like they are they're really kind of they're trying to hit homeruns here, they're trying to change healthcare. They're doing things that people say can't be done, and they are actively proving them wrong every single day. And so, you know, getting to be here getting to be part of that environment is is really, really incredible. And it's, you know, again, easy to get jaded in healthcare. Healthcare is tough. US healthcare is is complex and challenging. But coming to these events, you just get to see that little glimmer of hope of like, hey, there's some really, really cool stuff on the horizon that's going to change and improve a lot of lives. I mean, I would recommend LSI to others. Number one for that, that community, right of like minded people who are building really fantastic organizations. Number two, I think through that community, there are a tremendous number of connections that you're able to get, I was talking to a founder last night at one of the cocktail hours. And he has been to every LSI conference and his company has scaled from, you know, I think it was a seed stage company at the first one. And, you know, they've, they've raised a series B, they're looking at Series C, and, you know, he was saying, like, at every step along the way, there was a relationship that he built that lead to something down the road for his company. And I think that's really, really powerful from just like an event standpoint. I mean, I think the third one is just they're fun, right? Like, we're in, we're in Barcelona, it's beautiful. It's sunny outside, you know, in the spring, we were in Dana Point and this beautiful, beautiful property. And it's just inspiring to be able to work in a setting like this and kind of be able to bring all these people together for such a cool place. So I've recommended LSI to lots of folks, and they're our founders here at this conference that I introduced to, to Scott and and kind of got them involved within within the LSI organization. And so when I've been building companies, we've always thought about NPS score, right? You know, what is the likelihood that you're going to recommend something to a friend? And there's that the NPS score that you say? And then there's that real NPS score of like, do you actually recommend it? And do people come? And what I would say is that, you know, my real NPS here is a 10. For sure. So I think the most surprising thing I've I've come across at LSI this year, I mean, it's honestly just how interconnected this community is. Right? So there's a founder here, named David, he's the CEO of Senseye, I introduced Dave David to Scott and Henry. And, and so like, Now David and I are and Henry are all hanging out together. And then last night, I had a call with one of his investors randomly, and it was just like, wait a minute, there's like, five degrees of connection here at at this event. And I think that's one of the things that is, has been really fun is for me, you know, there are a handful of folks that I want to be chatting with while I'm here. And people have been so willing to make those introductions, right? It's, you know, there's, there's one person in particular who I've been wanting to speak with, I've had four different people tell me Oh, yeah, I can connect you with them. Right. And like, that's something that like you don't get anywhere else, right, that you just don't this, this, this is a such a setting where people are just like, eager to help each other in a way that you just don't see at at other types of summits, or, or conferences. And then, you know, I think the most the other most surprising thing from kind of a tech standpoint, you know, there's always one or two companies that just like, stick in my brain. And, you know, this year there, there have been two. So one is a company that is focused on improving the way CPAP machines actually kind of regulate the the airways. And so they essentially, like, hacked a bunch of CPAP machines, and then built a layer of software that they are now integrating into into those devices. And the idea though, is that it actually increases adherence, right? Because CPAP machines are super uncomfortable. You know, most people kind of take them off in their sleep, like just like unknowingly. And so being able to increase adherence is not only fantastic for patients and being able to regulate sleep apnea. It's also really good for those companies. Because it helps drive reimbursement it helps drive kind of like ongoing maintenance and repair and replacement of devices. So it's a really interesting kind of combination of cool software plus, like understanding the go to market approach. The second company is one that I was just randomly sitting next to somebody at dinner, and I got to see this this device that does ultrasounds on the brain. Right. And it's just like, Man, that is like, you know, that feels like something that is like 20 years in the future, right, but it's like a helmet that you put on and it does ultrasounds and so like, it's like stuff like that, where it's just like, oh, wow, this is like this is really going to change people's lives like this is really going to improve care. Like, you know, people might have better outcomes. comes because something like this exists in the world and so that's what gets that those are like the surprising moments and those are kind of like the crazy connections that keep me coming back to LSI.