Sometimes being a non-profit is exactly the right thing to be.
Rock HealthÂ â€“ a really interesting digital health incubator in San Francisco â€“ has attracted funders from Kleiner PerkinsÂ to GE, to long-time life sciences VC,Â Aberdare, and other powerful players. Each of 14 companies gets $100,000, and a five-month intensive incubation in their offices in San Francisco on the third floor of a building in Chinatown. On average, the four cohorts theyâ€™ve had in the past year have attracted another $800,000 in additional funding apiece.
Rock Health is a non-profit and doesnâ€™t take a piece of the money action. But in their case being a non-profit gives them a competitive market advantage. As their CEO, Halle Tecco, explained, they get digital health startups ready for trials with the patient populations of large health care systems. The for-profit startups armed with growth capital (that are Rock Healthâ€™s incubator participants) would never have been allowed access to hospitals and their patients unless they were brought in by a non-profit.
Rock Health, which launched in March of 2011, was the first accelerator of its kind in the country. Now there are half a dozen more, but they are all for-profit. I wonder how those for-profit accelerators will do getting access to patient populations for their mobile health startups. In the screaming venture technology opportunity of the digital health market, public, non-profit, and for-profit funding is learning to work together really closely to reach their different, but complementary goals. Itâ€™s a place where you have to translate back and forth from each groupâ€™s norms really quickly to get things done.
At SOCAP13 we will be highlighting companies working on ailments that predominantly afflict the underserved clients of the health care market, like chronic type 1 diabetes or PTSD. Itâ€™s a place you can invest with a high degree of Mission Insurance; if the company scales and becomes a rocket ship, if itâ€™s making its money helping people better manage their health, and the ailment skews toward poor people (meaning poor people get it much more than more affluent people), the blended value created is intrinsic and you can invest without the high cost of sometimes still not quite really useful metrics that much of the rest of the social capital market has to deploy.
If you make money by helping an urban grandmother manage her diabetes, and her grandsons handle their obesity, then when you succeed financially you know you have done good and done well, without compromise. You have mission insurance when you invest in that kind of company.
At SOCAP13 we want to bring attention to the awesome economic opportunity to be had at the intersection of Obamacare and mobile health apps, linked to affordable housing designed to create health. Weâ€™re highlighting the economic opportunity in the space that is focused to eradicate poverty and create personal and community health while it makes money at venture capital speed. With a nod to CK Pralahadâ€™s Fortune at the Bottom of the Pyramid, we want to point out the fortune to be made helping grandmaâ€™s and her grand kids get healthy in West Oakland.