The founders are spurring investment in women’s healthcare – expect more in 2023

Although women make up more than 50% of the population and gender-based differences affect all bodily tissues, organs and functions, little attention has been paid to preventing, diagnosing and treating women’s unique health needs, according to McKinsey . About 1% of research and innovation in the healthcare sector is invested in women-specific conditions other than oncology.

While venture capital for female founders addressing healthcare needs has increased, it is a decline in the overall healthcare industry.

It’s not just about sex-specific diseases and conditions, from menstruation to childbirth to menopause, but those that affect men and women differently, including cardiovascular disease, migraines and autoimmune diseases.

Even small increases in investment would lead to a high return on investment (ROI) and better health outcomes for women, writes Chloe E. Bird, a sociologist who studies health equity for RAND Corporation. Female founders are showing the potential for significant ROI for investors, including the Maven Clinic, which has achieved unicorn status. More is needed.

Springboard Enterprises is doubling down on its support for women-led healthcare companies. Springboard is well equipped to make an impact on the industry. More than 5,000 advisors, investors, successful entrepreneurs, and business and industry leaders provide expertise, from creating an investor pitch to commercializing innovations to protecting intellectual property.

Over its 22 years, over 880 women-led companies have been served, 90% raised capital, 27 went public in an initial public offering (IPO), $36 billion in value created, over 225 mergers and acquisitions transactions were made and 10 achieved unicorn status. Many of these companies focus on women’s healthcare, including AOA Dx, Aspira Women’s Health, LunaJoy, Mahmee, Materna Medical, and Rosy Wellness.

Springboard provides testimony to Congress on the inequalities in entrepreneurship, research underfunding, and underinvestment in women-led health care organizations and their impact on women’s health outcomes.

Men need to recognize that women’s healthcare is a market ripe for disruption and innovation. They walk into the offices of male investors talking about pelvic floor and menopause solutions and don’t have a personal point of reference to understand the issue, said Natalie Buford-Young, CEO of Springboard. Having the perspectives of their wives, daughters, mothers, sisters, friends or colleagues is not the same lived experience. Female founders and VCs are showing where the opportunities are.

In May 2020, Springboard launched the Women’s Health Innovation Coalition to drive innovation, investment and research for women’s health solutions. Created a coalition to bring together investors, researchers, policymakers and entrepreneurs on gender-specific health, such as gynecological and reproductive health, sexual health, and conditions women are more likely to have or manifest differently in women compared to men, such as oncology, bone health, heart disease, and cognitive and brain health conditions.

“We are seeing an increase in the number of Big Pharma and other large companies that want to keep an eye on the next generation of women’s health companies,” Buford-Young said. “They want to efficiently identify innovative early-stage companies, and that’s where we come in. These organizations act as consultants, provide research assistance, and provide grants or corporate venture capital.”

Springboard will launch cohorts specifically focused on women’s health.

At its gala last October, Springboard named Portfolia Investor of the Year. Portfolia is the most active investor in the US in women’s health, with more than 40 investments, from seed to pre-IPO, including Bone Health Technologies, JOYLUX, Maven Clinic, Everly Health and Willow Breast Pump.

When Portfolia set up its first fund in 2016, it wasn’t dedicated to women’s health but still invested in the sector. “We realized what a huge untapped market there was,” said Trish Costello, founder and CEO of the venture capital firm.

“The industry ignored women,” Costello exclaimed. In 2018, Portfolia launched its first femtech fund. He is launching his third fund this year and has his second fund in the active aging and longevity space. His other funds also invest in women’s healthcare.

“[Because men don’t understand women’s healthcare] it’s critical that women write checks,” Costello said. While the number is growing, only 16.1 percent of VC decision-makers are women, according to 2022 All In: Women Founders in the US VC Ecosystem.

VCs don’t fund founders, products, and solutions that address women’s healthcare needs. Adding one or two women to the venture firm’s team doesn’t change the relationship quickly. To scale the shift, Costello is activating accredited female investors to become limited partners (LPs) by writing checks into Portfolia funds: 88 percent of its 1,800 members are women. Nearly all, 95%, are first-time investors.

Costello could have focused on raising funds from a few large institutional investors. “But that wouldn’t change how women viewed their ability to be powerful in space,” she said.

Only a small percentage of accredited investors invest in venture capital. There is a perception that it is for the ultra-wealthy. However, to qualify as an accredited investor, you must:

By law, only funds of $10 million or less are allowed to have more than 99 accredited investors. To reach a fund size greater than $10 million, you need LPs who can write checks for hundreds of thousands of dollars, if not millions. Hence the perception that investing in ventures is for the ultra-rich.

Funds that total $10 million or less can have 249 accredited investors. How women (and men) invest in startups* recommends changing the policy to increase the number of accredited investors to 499 and the fund’s value to $50 million. Nearly three-quarters of accredited investor women would invest in venture capital if they could write a check for just $25,000. Among those who would not invest $25,000, 39% would invest $10,000. First-time investors can invest in Portfolia for as little as $10,000.

In 2006, VCs invested just $143 million in women’s health care, according to PitchBook. That number had grown to $1.9 billion by 2022. In 2006, just 4% of venture dollars went to companies with at least one female decision maker. That percentage had grown to 85% in 2022. Female founders are driving growth in the industry.

With the overturning of Roe v. Wade, expect women to be even more energetic to protect and improve women’s health. Whether founders or investors, women recognize the negative impact on health care outcomes the decision will generate. This concern may be why the funding of women-founded women’s healthcare firms has been less impacted by the venture capital downturn than exclusively male-founded women’s healthcare firms.

Investments in women’s healthcare companies with at least one female founder fell 22% from 2021 to 2202, while companies founded by men fell 68%.

Whether it’s women writing checks like VCs or LPs, they’re making their mark.

What industries are you finding ripe for innovation?

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