There is a diverse group of founders throughout the digital health sector. Yet, unequal access to investment exists within these groups, and many entrepreneurs may need help navigating hurdles in the healthcare and venture landscape.
Julien Pham, founder and managing partner at Third Culture Capital, sat down with MobiHealthNews to discuss why his firm prioritizes early-stage investments in health technology companies with founders from historically marginalized communities and the benefits of doing so for all healthcare stakeholders.
MobiHealthNews: Why does 3CC focus on funding this population in particular, and how does doing so benefit the business market, patients and providers?
Julien Pham: You can almost think of it as kind of approaching investment from a bottom-up approach. We believe these individuals, whether they’re labeled or described as marginalized or diverse, or whether they’re first-generation immigrants or female founders, oftentimes are highly talented, very passionate, but don’t have access to capital.
So being a solutions-minded person, and, you know, you would say, “All right, so let’s give them access to capital,” but no capital is not sufficient. You’ve got to coach them, you’ve got to open doors, you got to make connections, et cetera. And for us, we believe that these individuals have those natural skill sets and lived experiences to be very successful, if given the opportunity.
I’m generalizing, but someone coming from a marginalized community, one could maybe assume that they’re so passionate about, growing up, not having the resources that other people were having, and they were struggling and, single-parent income, or first-generation immigrant, whatever the story is, and they’re trying to solve that problem for the communities where they came from, with people who looked like them.
Oftentimes these people emerge out of their circumstances, and maybe are the first ones to get an education, a college education. And so we see it as a mission at 3CC to really support these individuals to build technologies or create services that will kind of improve outcomes for communities that may resemble them, or where they came from.
MHN: How can companies guarantee that their platforms are attractive to and work for all populations?
Pham: It takes leadership, and it takes intention. I think if you’re building a product or technology that is going to use novel, cutting-edge technology like AI to provide a solution, companion diagnostics, or whatever it is that you’re doing in digital therapeutics. I think that’s great, right. But that can take any direction. You can just kind of do what’s done before, but using technology to do it, or as an international leader who cares about diversity, who cares about access to care and inclusion, you can build a technology that takes that into account. And I think we’re looking for these types of leaders and founders who do that.
MHN: What kind of companies do you back?
Pham: We focus on software-driven technologies, and they kind of fall into different buckets. I think if you look at it from the traditional way that venture capital invests, we kinda don’t do it that way. But that would fall into digital health, into digital therapeutics, where we call tech bio these days, which is kind of more software-first or AI-driven kind of drug discovery type of things.
But at the end of the day, we back, number one, founders who don’t fit the mold … and we want these founders to build solutions that will fulfill the quadruple aim, and that quadruple aim is, number one, improve outcomes for patients. Number two, reduce the cost of care delivery at the system’s level. And number three and four, improve the experience of care for patients and improve the experience of care for providers.
MHN: What would you say to our readers who may be seeking funding from a company like yours?
Pham: You need to continue. It’s hard for everyone right now. People are losing jobs. It’s hard for a fund like us, especially as an emerging manager, to raise capital from LPs [limited partners]. It’s hard for startups to raise capital from VCs [venture capitalists]. There’s no rule of thumb or magic formula.
There was a time when people would come and show me that slide and say, Oh, we’re raising capital to give us, like, runway for 18 months. You know, in the early stage, it’s hard to know whether it’s true. But now the slides that I see are people coming to raise money for 24 to 36 months.
And maybe I’m being a little facetious, but it’s the same amount. It’s that the number has changed. What that means is that I think people are being a lot more careful about how they spend their money. And I think that will prove to be helpful, because the companies that survive through this will be extremely resilient, and these will have sound business models and will be very successful.