Physician Led Venture Capital Funds
Among some of the most active movers in the market today are physician led venture capital funds. It is the multitude of problems within the medical industry that is creating the opportunity.
In some ways, it might be said that problems create opportunities. When the problems exist in a field such as the medical field, the search for innovative solutions is going to be accelerated. The medical field is a fertile breeding ground for innovation and growth anyway, pushed forward, like the environmental sector, by social imperatives. The fight for quality and improved health care will never cease. The very factors that encourage growth and innovation create venture capital opportunities and have led to an increase in physician led venture capital funds.
When you look at the area of medical administration in general, you find that it is a very separate management field. In normal business management, the nature of the product is not a primary concern. This is why so many business models use the “widget” as their product. It could be mousetraps or it could be airplanes, the financial management issues tend to be the same and crossover among management people is possible. Medical administration is different. The field has its own unique set of priorities and issues.
One common feature of medical administration is the merger between administrators and physicians in the upper managerial tiers. The successful medical administration team always includes physicians. It is like there is a system of checks and balances in place with the physicians representing the medical imperatives and the medical administrators representing the financial ones. Physician led venture capital funds use this same symbiotic approach.
Physician led venture capital funds get involved in several different types of deals. One popular area is in the development of new medical equipment and procedures. It is almost impossible to have the true insight needed in the research and evaluation stages of the due diligence process without the input of physicians and medical administrators. Venture capital funds delving into this area in the past were forced to hire physicians as advisors. It was an easy leap to physician led venture capital funds. Many physicians had capital to invest and other investors were going to be more impressed with funds led by the true experts in the field, the physicians themselves teamed with successful medical administrators.
When you look at the staffs of some of the major medical orientated venture capital funds, you see the same mix of physicians and medical administrators that you find managing successful medical centers. The idea of value added investment and networking thrives in the medical field as well as anywhere else in the world. Many of the ventures being funded involve consolidating medical facilities and making use of improved communications and data processing to offer more comprehensive patient care.