Nashville is home to 17 publicly-traded healthcare companies, the premiere Vanderbilt University Medical Center and startups bringing in tens of millions of venture capital funding each year. Healthcare represents the city's largest and fastest-growing industry
It's also home to a seed fund that brings that industry together around up-and-coming health startup ideas from around the nation. The organization called Jumpstart Foundry
is hitting I-40 next week for trips to Raleigh and Durham, in hopes of recruiting startups to join its 2016 program and to find mentors and investors interested in getting involved.
I caught up with organizer and talent lead Daniel Oppong this week to learn more about the organization, in prep for its visits to HQ Raleigh on Feb. 3rd and American Underground on the 4th.
From accelerator to innovation fund
Turns out that Jumpstart Foundry started as an general startup accelerator in 2009 but morphed since 2014 into one of the nation's premiere programs and seed funds for health-oriented startup companies (Last year's class is pictured above). The initial refocus came in 2014 when leaders realized that of 37 portfolio companies, six healthcare startups in the bunch had raised 50 percent of the total follow-on capital (or $13 million) after they completed the accelerator.
Oppong describes the first five years of the program as "experimental." As the team tried different things, they realized that the best niche for the program aligned closely with Nashville's $40 billion industry cluster around healthcare.
18 months later, the company's portfolio includes 48 companies, with 70 percent of those either cash flow positive or exited (three exits).
But it wasn't just an industry focus that changed. Earlier this year, Jumpstart also dropped the title "accelerator" in favor of "Innovation fund,"
but with a unique offering. The 20 companies that will be accepted into the program later this spring will get access to the Nashville ecosystem through a more traditional 14-week accelerator curriculum. They'll also get help from a "traction engine", which matches companies with in-house marketing, branding, design and sales support. There's a talent network that helps companies source executives, staffers and mentors from around the nation.
There's also a nationwide network of angels that Jumpstart regularly communicates with and presents deal flow. And, those major healthcare organizations. Jumpstart regularly polls executives there to figure out the greatest needs and problems to solve, in hopes of finding companies or entrepreneurs equipped to solve them. In return, those organizations agree to serve as pilot customers.
Companies also get a lot more money from Jumpstart's $3 million fund. Each will receive a $100,000 direct investment (another $50,000 is provided through the services above) in return for a 7.5 percent equity stake. Before 2014, Jumpstart companies received $15,000.
Here's how Oppong sums it up: "We can help you get integrated into a pretty large healthcare ecosystem and then support you with all these assets."
One thing that won't happen during the 14 weeks is a Demo Day. Though more than 1,000 people showed up to Jumpstart's last Demo Day in 2014, the event cost a lot of money and was too big to actually connect the companies with investors.
Instead, they annually host a healthcare innovation conference called Health: Further, where industry leaders, innovators and investors come together to talk about issues and opportunities in the industry. Each Jumpstart Foundry company gets the chance to pitch at the event alongside other healthcare innovators from around the nation. Health: Further Quarterly events have since been added to continue those connections year-round.
The first nationwide tour
Though Jumpstart Foundry typically draws hundreds of applications each year, a goal is to find the very best companies to take advantage of the Nashville ecosystem and opportunities in the field, so this year, they're hitting the road to recruit.
Raleigh and Durham were chosen as the first stops because of the perceived strength of the healthcare innovation ecosystem here, as well as a connection to the region through the Google for Entrepreneurs hub network, of which American Underground and the Nashville Entrepreneur Center are a part.
Denver, Chicago, Minneapolis and New Orleans are next up on the list of cities. While the organization will host info sessions at both of the major startup campuses in the region, it also plans to meet with Rex Strategic Innovations and other investors and entrepreneurs plugged into the community. Oppong says he hopes to engage the entire healthcare ecosystem while in town, and to hopefully find companies that he can collaborate with or connect to Jumpstart.
Specifically, Jumpstart is looking for healthcare IT, tech-enabled services and diagnostic devices. They can be any size company—pre-revenue or cash flow positive. Some of the more specific targets based on feedback from healthcare institutions in Nashville are B2C data collection tools (like wearable devices and the data associated) and care extension service models.
Key regardless of product or service, is the team involved.
"Quality of team is important, and is there a market for what the team is designing? After we identify market opportunities—the gaps in the market these companies can fill—we decide if they are one of the companies that could fill it."
Sign up for the Raleigh info session here
or Durham here
. And more information on the tour can be found here.