From Physician To Venture Capitalist: Saumitra Thakur (MedMountain Ventures) and Amit Mehta (Builders VC)

 

everyone. Welcome to this webinar. We'll be talking about Amit and SO'S journeys from clinician to venture capitalists. For those of you who don't know me, I'm Rashad. I'm a family physician by training. I had my own started by close last year, and I have started angel investing since I run health tech investors for about 540 physicians now.

We're an angel syndicated and I'm trying to kind of bridge the gap between Venture capital and Angel Group. So we invest under a single S p V. Uh, me and my internal team do all the diligence, but we pull money together from the back end of our physicians to invest. We're just making our first two investments.

One is Inherent Biosciences and the second one we haven't announced yet. Um, yeah, so let's get started. I think, uh, Amit, I would like you to go first if you can give us an introduction from your journey from clinician to where you are now. And I would like you to focus on the why, um, and the when and let's, um, if you can kind of add, if you could go back to your post-fellowship residency self and give you one, give yourself one piece of advice, what would that be?

Sure.

So my background is I'm an interventional radiologist by training. Um, I grew up in Canada, did medical school, and then was working on some projects that, um, just could not deploy at that time in the Canadian ecosystem. And so moved, um, to the US and did residency, um, in the Harvard system at Mass General.

Um, it, while I was there, got involved in a lot of tech forward kind of entrepreneurial things and that ecosystem was just vibrant and had a lot of that going on in the Harvard m i t community. Um, so put the first sort of PAC system in the country in place. Worked, done a bunch of clinical research and courses and, and ran a lab and went on and on.

When, when I finished training, it was sort of at a crossroads of a decision point of, you know, do you could pursue clinical medicine or go look at these other things and. So during, during residency and fellowship when I'd worked on a lot of these other things, we had started a company in the breast cancer detection space, and it had failed miserably, um, but learned a lot in that process, a across that path.

Um, and so I knew that, you know, as a, I did not want at that time to be a primary investor, uh, understood a lot of the issues that we had had and the problems we had had, and, and understood how the process worked. Well, just because I had been through it, um, and decided that, you know, what was, what was something that was more passionate to me was to follow this trade craft, which had spent, you know, 15 years going through and something which I, you know, I know a lot of people say, why I go to medicine.

My parents were doctors, this, that, whatever. I, I mean, for me, As a technologist, radiology was something that was very apro for what I was good for my personality, I, I was a tinkerer, a polymath, sort of worked on a lot of these things and it, it fit very well with my personality and interventional radiology fit even better, given that I was a little A D H D and sort of quicker procedures and that kind of thing, fit well with what I was doing.

So I decided to pursue that and keep my additional interest in the med tech space. And so invented a few devices, got patents, worked through all that, and in that journey sort of had to raise money again and realized again how hard it was to raise money. Um, through that journey of raising money and running those things got involved, you know, as anyone would in this space with angel investing.

And then the next step is sort of venture pe and on it goes, you kind of find where, where you think your aptitude fits. And for me, the best was where, where venture sort of lay the intersection of new technology and early venture, you know, not late stage venture. And so I, um, very surreptitiously got back involved in venture in that the company that we had started when I was a resident, It was a three-prong approach.

There was a business approach, a technical approach, and a medical approach. The, I ran the medical teams, there was a kid from m I t who ran the tech teams and then a business person who we had gotten in from Harvard Business School, and we had lost touch sort of after that, um, meeting. But just one day, you know, I used to read voraciously, a lot of blogs and that kind of thing, and I saw a post saying this, you know, this guy.

Was now running, um, coast Lab Ventures and so let me just reach out. So sent a cold email to Jim at Coast Lab, you know, just backtracked the email addresses and said, Hey, I used to know this guy at MIT where we started a company, lost touch with him and, you know, immediately wrote back and said, yeah, it's me.

And I was like, oh, what are you doing? And so I know he was in la he was in, uh, San Francisco and Silicon Valley. And I said, well, I'm coming out there next week anyway, cuz my, my wife's family was there and our, our 30 minute meeting ended up turning into a 10 hour day and he said, why don't you come work with us?

We're starting a fund and we don't have healthcare expertise per se, and, you know, we've worked together and that. And so that was the start of a relationship where I came on as a venture partner. So no salary, no, you know, no nothing, just pro bono. But something that I had interested in that. I was interested in learning about venture and had done a lot of investing at that point, but just not as a formal dc.

So that relationship matured in now four funds later. I'm a general partner, you know, transitioning more into it, transitioned into a full-time DC in a, you know, 500 million under management and doing healthcare investing. Um, and so it's been a, a sort of a very circuit circuitous route getting there. But I've maintained some, you know, clinical skills and tried to basically intersect three areas of expertise.

One is clinical medicine, then two investing, and then the third circle in that Venn diagram was, I had always had a, an inkling again to basically write that wrong and, and turn that failure around. And so I'd started a clinical trial company eight or nine years ago, which we sold to a public last year.

So had taken that process through this time successfully and learned how to be an entrepreneur and operator and wanted to bring that as an investor. So to bring the, the intersection of these three spheres of influence of. Operator, investor and clinician, and see if we could use that as a superpower, as a vc.

What

is, um, I have a million questions as always, uh, but I will hold on them for now. Sure. Uh, most of our audience are physicians, um, in various stages of their career. Um, what is one piece of advice you have for them if they want to be a venture capitalist? What are the steps they should take? Um, and let's pretend they're within five years post residency.

Uh, and they have done nothing in entrepreneurship or venture so far. Um, they've been purely clinical.

Yeah. I, I would say, you know, my venture into venture was very organic and I think. There's a very romanticize and sexy sort of venture is really cool and there's lots of money and all this sort of stuff.

Which I think the, the key thing for me and what I tell other folks that interns and principals and folks who are in our fund is that, I mean, unless you really have passion for this, it's not that awesome. Like it takes a long time to make money. You know, these adventure, like our funds are 10 year funds, right?

And you don't see money per, I mean, you get a salary, but it's, if you're trying to make money, it's much better to be a doctor. You know, you'll make more money if you're a successful VC over time definitely will make more money, but it something that you have to have an aptitude for an interest in and willing to sort of spend the time, you know, it's not, I see lots of, I have a lot of physician friends who come to me and say, can I consult?

You know, we, we don't really need consultants. There are too many consultants in the world, in my opinion. But as a consultant, you have a, an expertise in a very small sliver to be a good vc. And whether you're doing healthcare investing or not, it takes a wide array of interest and knowledge in many things cuz they all tie in.

You know, we're looking at healthcare sass for example. You have to understand the SAS business as it intersects with the healthcare business, as it intersects with FinTech businesses. So if you're a physician who says, well, I know how to do, you know, T bar, that's great. You know, all about thoracic endograft.

But that one expertise doesn't make you a good vc. So it's really an understanding of who you are and what you're trying to get out of it.

That is a perfect answer, Amit. Thank you. I think, um, I would love your story and I'll say one thing. I think it's very difficult to fake being a vc. Um, the old mantra, fake it till you make, it does not work in venture capital, in my experience.

And if you're falling hype, if you're falling that mantra, you will be found out fairly quickly. Um, and I think this, this vision of VC and I, I'm not a vc, um, yet, but this vision of VC non venture capitalists or clinicians have is, is very different than the truth. Um, it's a game of being perseverance, great, resilient, and finding the truth cuz that's how you win.

That's how you make money, is if you, if you find the future winners. Um, and it doesn't matter if proving or showing that you're intelligent or gravitas, it's, it's irrelevant. All that matters is can you pick winners or not. Um, so Sam, I would love for you to comment on, on that and then, um, share your story as well.

Totally. Let me start by saying, Amit, it's so fun to hear your story. I really enjoyed it and I got, um, I just got, you know, really excited hearing about all the different chapters. Um, to Rashad's point, I think that part of it is that there's proof in the pudding. Does your fund work? Does it make money, et cetera.

I think that there's also something about what I like to call, you know, there's something about like, you know, first minute credibility and 10 minute credibility. First minute credibility is the prestige signaling stuff we do. You know, famous M B A, whatever, you know, degrees. And then minute 10 credibility is like after your good first impression.

Do you sound a musome profanity? Do you sound like a dumbass? Can you actually talk in a very sophisticated way about like, you know, this space? Do you have like real sophistication and expertise? Um, and I found that the VC people that I really, really love collaborating with, the ones I really intimately trust, they all have excellent minute 10 credibility.

Uh, I think that is an interesting theme as well. As we talk about wise, they're usually people who are driven by something deeper than I want, status, prestige, or money. They're usually people who are, uh, in a sense, very mission driven. Like they just love the idea of making care better. This is their way of, you know, translating innovation into something very impactful.

The people, I think are the smartest VCs, the best VCs, especially among physicians. That's often a team you can hear. It is Ahmed talks about, you know, his experiences, where he's been, the companies he's built, and how it informs him as an investor. Um, before I do my bio, Rashad, was that helpful as a comment?

Yeah, no, that, that's perfect. Cool. I'll do my bio quickly. I'll do it by the facts and I'll talk about the why and then I'll hit on a few themes that are similar to Amit. My journey's a lot shorter than Amit. I was doing my medical degree at Y u. I fell into a startup that had nothing to do with healthcare.

It was probably the kind of startup that's like maximum hype and buzz with like zero substance. Like that ratio is probably the most extreme of anything. But essentially it was cool and I was hanging out with a bunch of a-list people and felt in one sense, very ego gratified. The company made no sense.

I went to get my MBA at Stanford, which I think selects for. You know, sort of like bizarre and strange sometimes overhyped companies that have no substance. So I hung out there and I was just like deeply unhappy. I was very ego gratified in one sense, and I sort of hated what I was doing, and it felt very strange, you know, giving bad news to people, crying in the hospital, holding hands, healing people during like the worst day of their lives, and then leaving to go do something that was relatively vad.

So I left it, threw myself into clinical medicine. Um, and then, uh, through sort of a strong and strangely meandering course, ended up raising a VC fund, uh, med Mountain Ventures with a physician builder who I really, really trust and really, really like. Um, it was very much through, uh, Chance encounters.

When I left business school, I was very over it, very cynical. I just wanted to go back into the monastery. But I thoroughly loved hanging out with builders and creators. I loved reading papers. I loved lo thinking really hard about, you know, policy and regulation, thinking, like collaborating with people cross-functionally from very different disciplines.

And through the places that I was, I built up a lot of loose connections, uh, that ended up ushering me into venture. In my case, I helped out a guy. He exited his company, he started a fund, he had a stroke. He asked me for help. I showed up while he was recovering from his stroke. I helped him run his fund.

And one thing led to another totally love VC for reasons that we can talk about later on in the interview. And the themes that I think resonate with Amit are partly. The power of loose connections and serendipity. It's a story that seems like it has a lot of, you know, deliberate design from day one, but was largely chance.

And people who I met in like, you know, different roles. And two, I think if we're successful as a fund, it's because I spent a lot of time in cross-functional settings working with people outside healthcare with like very different perspectives. Seeing it from my point of view, seeing it from their point of view, and then bringing a much more well-rounded point of view to venture.

And then finally, to Amit's point, uh, as a, you know, someone who's years, I don't wanna date you on it, but probably perhaps many years or perhaps decades younger than you in this journey, not too much. Sorry, the knocking on wood has excited my dog. You know, I would make way more money and have a much more straightforward life just picking up night shifts from my hospitalist group than, you know, building out my venture fund.

So I do it because I really truly love doing this work and, you know, hanging out with early stage founders. Even if I could retire tomorrow, the structure of my day would be the same. It'd be like rounding for fun in the hospital on a part-time basis. Cause I find that awesome. And it'll be mostly doing VC stuff with very early stage companies.

Awesome. Thanks

Amit. I, let's talk about why you switched from entrepreneurship to investing. It sounds like it was somewhat serendipitous with the network you had already. Um, and how is asking an interesting question, would you say entrepreneurship, and I'll reframe that. Would you say being a founder is a prerequisite to becoming an investor?

Um, so I, I don't, I didn't, I wouldn't say switch from one to the other. I think. So I think it is valuable for younger folks and somebody probably included, is it, you know, there's all this stuff about manifesting what you want. And I think there's probably some validity to that is if you're, you know, within five years of training and you're not enjoying, you know, clinical work is to sit down and actually write out a manifesto of, you know, this is where I want to end up and what does that path for you mean?

And for me, I had sort of, you know, this, this entrepreneurship trip of doing this company and doing this was more of a, to prove to myself that I wasn't a moron and that my failure was not my failure only, right? I mean, we failed for lots of reasons. And now in retrospect, easy to say after we had a successful exit that it wasn't my fault, but the, my, my, I had my, you know, there was my piece to it, but we had lots of issues that went, that that really weren't something that had to do with execution on, on our part.

But I would sit down and say, This is where I want to get to. And for me, with my personality of who I am and how I work, these are the building blocks to get there. So for me, I was investing already as an angel and working on device development and all of that. I, I don't necessarily believe that I needed to be an operator to be a good investor.

It was already, I'd already been doing a lot of things. It, for me, for the structure that I had outlined when I needed to be successful investor, I was checking those boxes off. You see, lots of venture folks come from the operating side. They operate, they realized maybe I can, I, I know I can do it better.

I have a bunch of money and let me go try to help the world do it. I, that's a completely valid. Uh, way to come at it. But I can tell you I don't believe being a successful operator is either a prerequisite to be a good VC or for, in many cases, some of those, tho they're the worst VCs I've met. So they were successful either because they got lucky, you know, right idea, right time, right execution, or they were very good in a very vertical execution.

And to be good at venture, honestly, in my opinion, and we can talk about what the pieces are, but I really think it needs, you need a pretty broad and a, a wide base of understanding of a lot of things. If you're very vertical, it's fine. As long as you find a fun, like if you're doing, you know, catheters and stents, well find a fun that's doing catheters and stents.

You know, cause as soon as you get a device and some other discipline or a health tech SaaS company, You know, you're probably out of your depth and that becomes very apparent to everyone very quickly. That was another answer, probably can, if you can vouch for this, is that you can sit in a meeting and sound like an idiot very quickly, and people around the table will know if you know what you're talking about or you don't.

Very quickly,

Sam, I would like to go deeper in your experience with College 100, and I'm not sure if you're expecting this question or not, talk to me about politics and venture politics decides, um, in some ways, maybe more than it should in healthcare, especially in terms of reimbursement and funding. Mm-hmm. Um, being a clinical industry expert, uh, you know, and I agree with everything that's being said.

It is a very small part of venture. Um, it's an important, but it, it, it is nowhere near enough for success.

Um, okay. I, so in brief, I ran this startup called College 100. We've been, we built movements for famous people. Uh, it would be like former heads of state Nobel laureates, um, military chiefs, tech icons.

You know, Cheryl Sandberg would be rolling out Meanin and we'd help her do it at like a hundred campuses. And it was, we were very good at basically showing up as nobody's and getting into a bunch of a-list circles. We were very good at what I would describe the politics of influence and, you know, tit for tabs and other things.

It was cynical work. It taught me a lot. It was a lot of like, you know, parlay favor into favor to like, get things done. I think it was, um, An interesting and educational experience for me in terms of finding my values and my ethics, et cetera. Uh, which largely was like, you know, react information deeply away from that and towards the sort of caring for the ill and doing something very service oriented.

I would draw a distinction between politics and policy. I see politics as, you know, the craft to sort of like, you know, it'd be a lot of like basically finding someone who's totally not gonna win, you know, like the presidential nomination, but will be someone really important. And then being like, let's bundle for them.

Let's do like, you know, thousand dollars play. Let's get to know them. We'll build a lot of favors. And then when they're in some like, you know, sweet cabinet post, we're gonna cash in on those favors, get us a bunch of interns, you know, use that to kind of like get good. It was like very calculated. I think that that was a useful set of tools to have often when helping companies, especially founders that don't come from elite circles.

Breakthrough and access networks and influence. I tell them, you know, don't play games, but if the rest of the world is playing games, you'll have to play them too. And these are, you know, skills and tactics, other things to consider is a separate issue. I also love policy. It's where I've spent a lot of my time thinking, uh, throughout my academic career.

And I think that it's so important for many kinds of healthcare investing to think about, you know, fundamentally, where's the world going? Where's the pup going? Our industry is so busted and it strongly in favors. It strongly favors incumbents, large legacy institutions, et cetera, unless things happen that really disturb the status quo and create opportunities for like new things to happen really quickly.

We have incredible regulatory capture by large entities that exist today. The whole field is, it's like such a, like complex and non-dynamic market compared to. Most other places where people invest, but if you really understand that, you can find all of these inefficiencies that allow for cool and potentially explosive opportunities for investment.

Uh, and that kind of work I really enjoy. I also like the fact that our work, by virtue of being in the realm of political risk and political economy, is a very appealing place for funds of funds to park value because in a sense it behaves in a more predictable way than other sectors do. Um, it's hard to justify during a good economy, you know, why put a marginal dollar towards healthcare when you can put it towards like, you know, FinTech.

But there's something compelling about, um, you know, this sector, the way we pay for it at a federal level, the way we. Structure, it regulated, et cetera. If you really truly understand it, they're really cool opportunities to do amazing things. So academically, socially, politically, I just really love making the world better by using this previously mostly archaic geek knowledge that I had, uh, in a very pragmatic way.

Was that helpful, Rashad? Did that get at the, uh, question, um, that you were asking? I

did. And if you guys wanna go back and forth, feel free to do so. Um, I, do you have any thoughts to add to that? If not, I'll ask my next question. No, let's

keep moving. These are good questions.

Okay. Um, one thing that I find, so my network is mostly physicians who want to get into investing in venture, um, and sometimes entrepreneurship.

One thing I find they undervalue quite a bit is network and the power of networking. Did you ever think about doing an mba? If so, at what point in your trajectory did you think of that and why did you not do it? Would you recommend an MBA to physicians who want to get intervention entrepreneurship? And talk to me about your framework for networking and what advice you have for physicians, um, to grow their network.

My framework is just branding to be frank with you guys, I put all my thoughts out there. Um, sometimes they're stupid, sometimes they're smart. Uh, but that's how my network is growing personally.

Yeah, I mean, I think network clearly is very brand. You've done it rash. You've done an amazing job, and there's all, all hundreds of physicians already in the health tech investors.

And, and I'm seeing, I was in a hackathon this weekend, saw that you guys had sponsored it. So it, getting your name out there is definitely, uh, very important. Let me start with the b a question. So I, I did toy with doing an B a I think I toyed with doing an b a before knowing what an B really was. And then by the time I kind of figured out what an b A was, it was too late.

Um, in that it's never too late. I get it, but I was already on this path of doing a bunch of things and there wasn't really a year, year and a half I could take off to go do an mba, and I think I could have done a. You know, online MBA or whatever it was. But the value in the MBA to me as an online didn't, unless I went to a GSB or an HBS or something like that, it did, the value to me wasn't there because the network was what I was getting there.

For me, what I do, I do this sort of Zuckerberg thing where I spent, every year I pick a thing, I'm gonna go deep in and go real deep for a year. And so one year I decided that was an mba. So I did my own M mba, read everything I needed to know, and learned everything I needed to know about finance that I thought I would learn from an MBA except the network.

And I didn't realize at the time that how important that network would be. And I will tell you one of the fundamentals of being a successful VC is network. I mean, these deals have to come from somewhere. So unless you're an animal, you know, out there figuring out how to find these deals, somehow your network is where it comes from.

So again, this goes back to, you know, one of the original questions you had said is like, you know, a lot of physicians wanna be VCs. Is it the right move? And this is coming from a radiologist, right? A guy who spends all his day in the dark, antisocial away from people as much as we can. Like if you're not a social being and you like going to dinners and you like interacting with people and talking to them and all that, I mean, probably being a VC is probably not the greatest career in the world.

I mean, this is a very human to human connection kind of business. Like I work very closely on with the entrepreneurs, the CEOs of our companies and the boards we sit on and we help them. And I talk to them late at night, you know, it's like my wife says, you know, you've got like three or four girlfriends.

Like we, this is a very social business. So if that's not you, then think about it. You can be a very successful investor without having to be a V seat. I mean, angel investing, you know, if you look at. The National Angel Capital Association numbers, it is a very successful, if you're a good angel, you make a lot of money.

So I think it's important to think about, you know, why and what are you doing and what do you enjoy about venture if that's what you want to do. All investing is not venture, but that's sort of what we think about as physicians. Cuz we hear these venture capitalists and you hear it in the media, right?

It's, there's lots of other ways to invest and if, you know, if it's, if investing per se is something that's really interesting. The the times, honestly, that I've had the best time investing is when. I was a pre-seed angel or super angel, and I got in there and I had equity in the company and I helped build it.

And not only was it satisfying from the investing standpoint, but the product was satisfying and the economic gain was incredible. I mean, much more than venture, right? Because I was a pre-seed, I owned 30% of the company. It had a big exit, like it was way better than the carry I get in a fund that we make a certain number of investments over a certain amount of time, et cetera, et cetera.

So, um, I, I think it's, it's very important to kind of understand why you're doing it. And the b a is probably a good, you know, a good gut check of why are you doing it and what are you trying to get from it.

Perfect. So do you have any thoughts, um, on who, what pursuit of physician should pursue an mba?

Um, you know, it's a good question.

I like Amit's point of view. I got mine. I think I was relatively. Professionally immature when I did it. I think that these M B A programs kind of prey on that and it's just a stupid way to make a ton of money for most people to echo on it, I would say think very aggressively about what is your exact thesis for doing it, whatever that thesis is.

If it's network, I think it really, you have to go to one of two or three programs in this country to get a significant step up in network in candor. Uh, two, if it's fund of knowledge, think about other places to go to do it. And if it's credentialing, think very hard about, you know, is there another way to do it if you hang out at N I H and research instead for a few years and you become like a subject matter expert in your field, you know, that's credentialing its own way.

I really like, uh, what used to be known as a Robert Wood Johnson or N C S P now, which is a very generic name, which produced a whole bunch of our large healthcare system leaders who are essentially healthcare economists, academics who have. An amazing skillset. But you know, instead of getting an mba, they instead put out a bunch of papers.

They got paid to do it, and it was partly clinical and it only took two years. There's so many alternatives. Uh, and the final one for people who are younger career is if you really wanna leave clinical medicine and pivot your career, if you're a position to break into it, consider elite consulting for a few years at least you're getting paid instead of like, you know, paying tuition.

And it gives you basically a very similar network and a very similar, you know, fund of knowledge, et cetera. So I think that the only people who should get an M B A are people who have a clearly articulated thesis, like, this is specifically what I plan to get from it, and who very systematically think about what are all the other ways I can get this?

And is, is this really the most efficient use of time and use of capital? Mindful of like the deferred income and the deferred opportunity, you know, the op, the time, opportunity, cost spent doing other things. Perfect.

There's quite a few questions on how to get started in VC and how to consult, um, for startups as well.

I'll kind of take a stab at this and I'd love you guys to kind, um, chime in as well in terms of getting started in vc. If you wanna break it down. And this is board from Harry Stubbings who has a really good podcast. I recommend everyone listen to. Um, you can break it down to three thingss, uh, deal flow diligence and adding value post investment.

So think about how you can get good deal flow and your local university ecosystem is a good place to start. Where there are likely founders, entrepreneurs who want physician opinions on their startup. Um, you can start local events, um, and local engine networks are a good place to start for deal flow as well.

My deal flow comes from friends, um, and also. From my branding on LinkedIn and webinars and newsletters and, and things of those sorts. So that's something you could consider for Dean Floyd is just put your thoughts out there. People don't know the pain points of physicians, even though they're obvious to us.

Um, things like, uh, from the hackathon over this weekend, uh, med is a pain point. You know, you're a hospitalist, you're taking an admission. Um, you have to call the patient and say, you know, what is this yellow pill you're taking, um, at, or what pill you're taking? They say, you know, are you taking atop pill?

Well, I'm taking a blue pill, a yellow pill, red pill. I don't know what they're, so that is a pain point. We're clinicians. We know that, but people don't know that. So just, just labeling your pain points and just, just writing them out and putting them out there will get you further than you think. In terms of deal flow diligence, you have to be a bit careful.

Clinical diligence is a small part of venture, but it is an important part. And I would break it down to if the, the path to success for the startup is contingent all, will physicians use this? Will physicians pay for this? Or will physicians prescribe this? Then we have, um, an inherent intuitive advantage there.

Now, the question might be is, will physicians use this in three years from now? And that takes a different skill set of physicians that takes more of the entrepreneurial, disruptive, innovative mind to look at or to try and confer what your workflow would be like three, five years from now. Um, and then try and answer that question.

Value add is fairly simple. We know people, we know CIOs. Uh, most of us will know at least one or two in health systems or hospitals. We know people in decision making capacity who buy products from startups. Especially right now, there's a massive. Boom of ai, LLMs, transformers, um, in healthcare. Um, and, and we, we know what our pain points are.

We know how workflows can be better. So from my perspective, it's somewhat straightforward, but it's identifying that. And then just saying it in terms of advising startups. I advise one startup right now, and I might advise another one. Um, I take anywhere from 0.25 to 2% equity. But to be frank with you, 2% is too much.

Um, 0.25 is, is more in line with how much you should take unless you're spending, you know, 10 hours a week or something, or five to 10 hours a week. Um, I don't expect to get anything from my equity, from my advising. I don't charge for it. And it's more to build a relationship with entrepreneurs to follow their journey and for me to learn as well as an investor, you know, where can I help?

And I, I have had to like go of co-founders. I've had to. Manage, uh, a lot of things and, and founder and scaling a little bit up to 14 people. And I think, um, you know, so there's things I can offer outside of my clinical expertise. I'll pause there. I'm at, what are your thoughts on our physicians getting involved in VC and then physician consultants for startups?

Um, yeah, so I think there's a couple questions there. So lemme just start with the first one is, how do you get started? I think what you've done is, is incredible and that's a great way to get started. So is develop an expertise, a name, uh, a following, whatever it may be that lets you stand out from the rest of the crowd.

And that's. Typically organic rather than, you know, pay to play. I mean, the pay-to-play kind of thing doesn't, I mean, uh, don't go hire a LinkedIn or TikTok media expert to blow your brand up. That's not kind of what people are looking for, because when you get to the table doing due diligence on a company, it'll become very clear that you're a TikTok star and probably not that cerebrally inclined.

Um, but to start with something is a good way of, of getting your feet wet and then growing from there. I, I'm hesitant to say, I mean, I know a lot of people think that, oh, let me become a consultant, like this consultant thing. So there's a lot of consulting companies out there, Guidepoint, glg, I mean, the list goes on and on and on.

We have built successful businesses around finding people for $300, $500 an hour or whatever, getting consultants, right. Um, and lot of venture PE use those. And that's what they use, right? They, they pay some money, they get an hour or two of consultation and they get, sort of get what they need from that.

They're not looking for consultants to a fund because the heterogeneity of what we see on a day-to-day basis in a fund can go from, you know, clinical deployment to FinTech, to medical device, to n a sequencing. Like it's not a you, you can't be a consultant who can provide that depth and breadth of what a fund needs.

It's better for a fund if they're going to spend money on someone like you to just go pay three or $400 an hour and buy a thousand hours of consulting from one of these consultant services. So I would tell you, I think, you know, we don't use consultants and I wouldn't go the consult consulting route to break into this.

What I would do is, Establish a following, become known in something, work towards, um, establishing your name and your brand, and then try to present that to venture firms. And like I, I mean, I was a venture partner with no salary, no benefit, no nothing for seven years before I started moving sort of up in the chain, right?

And people saw that I'd put in the time, I'd come to every meeting for seven years, spent lots of my personal time flying to Silicon Valley, et cetera, et cetera, et cetera. So it was a natural evolution at that point. And that's sort of what you had to do. You know, it, it, it wasn't something for the fame, the money, the whatever it was, it, it was truly that I had an interest.

And that organic sort of interest was very clear to people. And that's how that sort of happened. And one more thing, sorry. The other thing is go start a company, have a massive exit, and then just have your own fund, then screw everybody else. That's, that's always an option.

Do you think, um, I'll ask you one question in Soro, I I'll love your thoughts as well.

And also I've been doing this for about three years if you, if you count my startup as well. And I've made $0 so far and I'm perfectly happy with that cuz I, I've learned so much and I, I can see a path to some, some revenue at some point in the future, hopefully. Um, can you, um, talk about the importance of track record before you decide to say launch a fund, how important is track record?

Um, and then, um, if you were to launch a fund, post exit, um, of a, of a company, do you need a track record or is that, is that enough?

Yeah, so what do you need A track record for? A track record is because you want to demonstrate to other people that you are a good investor and who are those other people?

Those other people are investors, LPs, limited partners who are going to put money into your fund and they want to know if I'm gonna give you money, Are you good at investing? So if you have a startup and you have a successful exit and you have a hundred million fund and it's all your money, you have no one to answer to but yourself, you don't need a track record, you can make your own track record.

If you're raising money like we are from institutional funds, we have state endowments, teachers funds, police unions, you know, middle East, all these folks, we have to have a track record. There's no way you can raise a fund without a track record unless you have some special personal relationship and it's the first fund and someone gives you a chance and all of that, right?

But second, third, fourth, fifth fund, it's going to be because you have a track record of successful investing.

Perfect. So, Imma throw, um, I would love for you to kind of, cause, because you have done this fairly recently, um, for your first fund. So I think, uh, I would love your answer on track record and also your thoughts on physician consultants and our physicians can get involved in venture capital.

Totally. When I mentioned, I'll start with the second question. When I men mentioned consulting as an alternative to the mba, I was thinking more like McKinsey, Bain, bbc G, et cetera, like management consulting. That's a question for Ramin in the, uh, chat. Um, as an alternative to getting an mba, I agree with Amit that I rarely use.

Um, I would never pay for a consultant basically for the stage of investing that I do if I don't understand the field. And if I have to call a subject matter expert to explain it to me, I'm basically doing like guy on the street gambling and it's not, it probably won't be a good fit long term. Every now and then I do something that I would call, like pass through advising.

So, for example, I feel comfortable taking relatively bold, complicated bets for, you know, value-based care initiatives. But I'm probably not smart enough to be like with an early stage company, like, you know, Sitting next to my founder, like counterparty to a payer negotiating a V B C thing. But I know this lady who's like, you know, an executive who did that for a long time and she's awesome.

And she's like a gun for hire. So, you know, she doesn't advise me, but I frequently like push her to a lot of my port codes and I'm like, you know, you need someone who's like actually able to do like that last mile of negotiation. You know, she's really smart. Hit her up, you know, pass her through for things like that.

I think that that's reasonable. Um, in terms of, uh, raising a fund, raising a fund is really hard. Being an emerging manager is brutal. Um, for me, I think that a few things really helped us. My cog p the person who created the fund and then fell and then had me tap in, he was an engineer. I c u doctor, um, angel investor, MedTech founder, smart, brilliant, very beloved.

His. Device companies did well, he returned money for people and he had a lot of Goodwills. So he went to folks and he said, you know, I have this idea. And it's like very early. And our first LPs were essentially the same kind of people who would be, you know, early stage investors, partly based on track record, partly based on hopes and dreams.

It was partly a story that he said where he is like, you're not just investing in me, you're investing in a team. You're investing in, like, you know, norms, strategy, governance. I wanna build something. I wanna build it over 10, 15 years a fund, a series of funds. This will be the focus we're doing something other people aren't doing.

And essentially, you know, like you have reason to believe that I have expertise to do something other people aren't doing, and I can create value in doing so and I will return that value to you reasonably. Um, It was, it was hard. I would say it was probably, I'm curious what Oman's experience is. I would say that pitching LPs and fundraising as a fund is maybe one to two orders of magnitude more complex and non straightforward than fundraising when I've been on, like the founder side fundraising.

Instead. With that said, um, it's, I think it's very fun. I really love talking to people who are like asset allocators and the way they think and view the world. I find it a good way to hold myself accountable and pull myself out of like the nitty gritty of what I'm doing day-to-day and take a step back and be like, how do I fit into a system?

How do I think, like, you know, across a portfolio, et cetera. But in brief, Tough to do. I would say a much more common path is for folks who make this transition, is to join a fund, uh, that already exists as opposed to raising their own. And from talking to a lot of my peer friends who did it, their quality of life is a lot higher.

Like the dinners that they will extende on a regular basis will be like more than like the management fee that I pulled for, you know, like a few months. But, you know, they will have a Michelin star private chef, like come in, cater a small dinner for, you know, 15 people in SF a few times a week or a few times a month.

So there is something fun about just joining an institution that already exists. Different game. I get to report to myself. I have like radical autonomy in how I live and what we do. Um, I don't have to think of like, you know, how does influence work? How does decision, you know, decisions work? How do I navigate an investment committee, et cetera.

Yeah, I mean, the point there, I think it's important to understand the economics of venture before you go into it. I think most people, there's this very sexy, romantic side. This is, it's, you know, not everyone's Peter Teal, that's number one. And I'll just to put into perspective in raising a fund, our first fund, we spent 162,000 miles in the air.

Oh my goodness. Yeah. So it's not a, it's not for the faint of heart. Like this is, you have to wanna do it. It's not, and you, you know, once you've raised the first fund though, the second, third, fourth come a lot easier because there's a track record. But, you know, just to me to point like it's your track record doesn't necessarily only mean these are the investments I've done.

Right. Like your co-founder had done med tech companies and, and people invest in people. So if you have a network, because you've spent some time developing yourself in a brand, whether it's a device, a product, a patent, a just a generally, you know, super nice guy, you can go to people and they'll give you money.

So it doesn't have to come from institutions.

That's right. To tie it back to a point that we talked earlier about network power. I often give you, you know, Rashad, I often mention you as an example, or Polyus as an example of people who didn't do MBAs but have like super massive networks and a whole bunch of goodwill because you build communities and put out a lot of information and pull people up and like you guys have really like, you know, maximized your, you know, loose connections, et cetera.

So I often tell people, you know, see what Rashad did, see how he sort of like, you know, man, it like that strategy or what Polly has did with his writings, the hackathon, I think being a pinnacle of something that I've seen him build over like 18 months, you know? Awesome. Awesome to do. Hard to do, hard to do.

Well you guys are like Olympians when it comes to this.

Thanks. So, and I'm a big fan of Polys. We both started around the same time and it's, I'm very happy to see his success and I'm, you know, I can't wait for what he does in the future. Um, his brain works in magical ways. Um, and I, I love, we're both artists as well.

We both paint, and I think that kind of, that helps build these communities to an extent. Not that you don't have to be an artist to make this community, I don't want people to think that, but, um, it, it definitely helps. I, I wanna talk about, um, mental health, psychiatry and how it, we differentiate it from all the other fields of medicine, specifically in terms of diagnostics.

And this question may seem out of the field, but I'm hoping it gives people an insight into the mindset and investor needs to succeed. Um, there has never been, from what I can recall, and please correct me if I'm inaccurate here, a blood test or biomarker for a psychiatric or a mental health illness. And whenever there is, we say there's a thyroid related with anxiety or depression or B12 with dementia, we, we pull.

Those people out of psychiatry, for some reason we say your, your dementia is, is not true dementia as b12, dementia or, or vascular dementia, for example. When do you think the first biomarker diagnostic, it doesn't have to be a blood test, but um, will exist for psychiatry and achieve market adoption. Which illness do you think it'll be for and why hasn't it happened yet?

I, I can tell you just this week, and there's a question in the qa, I looked at a gen AI company that has an l l M for voice biomarkers for five psychiatric conditions, so depression, opioid abuse, Alzheimer's, et cetera. And so, and there are companies. I've looked at, we did not invest, um, but that are, that have biomarkers for psychiatric conditions of various, you know, things of which voice right now I think is probably at the forefront because of Jenna and LLMs.

Um, and so I think it's coming and there are some there. And I think these entrepreneurs will tell you that they have very high sensitivity and specificity that that is yet to be seen. But this goes back to sort of, you know, why we didn't invest was just, it, it was a single feature that is difficult to deploy in, into the marketplace as opposed to a holistic or comprehensive solution.

And, and so someone's asked the question, I think in the q and a that, um, he's starting a, he or she's starting a gen AI company. Lot of hype, not a lot of substance. How do you generally evaluate medical AI pitches? Any advice for someone who likes the right network? You know, make a comment to here is we don't know how to evaluate gen AI companies yet.

You know, hit ai, got 50 million on some crazy valuation on, I mean, there's an article in Forbes today about sort of what went down with the founders in the past and all this sort of stuff. Like we have not as a fund figured out how to fund J Gen AI companies yet. Um, I do know we're not changing the way we fund companies or the, the things that we look for as a foundation when in companies that we invest in platform tech, you know, universal deployability, a lot of the things we look for founder fit.

We're not changing that. We're trying to adapt and see does do gen AI companies have that? And we just haven't seen it yet. So I think if you put AI at the end of your website, you can probably raise money from somebody really easily today, just not us. Um, but I'm happy to look at the pitches. So, um, I'm looking for my first, we're looking for that first gen AI investment right now in healthcare.

You know, Deval Kari gave me this advice a couple years ago when I was just starting that, uh, you know, he was like, we, it's like, you know, we see sins of omission and commission differently and you just gotta make peace with like, you know, sins of omission. Avoid making bad investments, um, and be at peace that, you know, good things will pass by.

And not every fund has that strategy. I think there are a lot of funds that are like, you know, macro trend, take a bunch of bites, sprain prey can lose money for the first many early stage checks, just have optionality to prestige like c r d, which, you know, cool for them. But certainly for the style of investment that I do.

And I think the attitude that Amed described, it's very much, you know, watch and think and reflect, form a point of view about where the world is, and then make a really smart generative AI investment as opposed to what I think is a frenzy of people just being like, you know, people are running, I should run to, I should like, get in on this.

I respect that. Um, Rashad, to your point about psychiatry, I think that a lot of psychiatric conditions are characterized still at a syndromic level, and what we're really looking for is trying to figure out all the, like, you know, unique pathophysiological subtypes. We kind of get signal that probably something like this exists in depression and probably something like this exists in schizophrenia.

I think schizophrenia would probably be like the first condition where we're gonna see some really. Profound breakthroughs. I think our understanding of the neuroscience of it is a little bit better than the other conditions, and I would describe it as sort of analogous to asthma and how asthma was in like the eighties and nineties versus how asthma is today.

Where in the eighties and nineties we kind of had this idea that, you know, they're like phenotypes of asthma and some people are more like this and some people are more like that. But in this era where we have all of these incredible monoclonal antibodies and we can basically drug like any part of the inflammatory cascade, we can like really, really dive in and be like, but like, you know, what is the exact inflammatory driver of like your kind of asthma And the field is probably the most advanced in this is, you know, cancer and how we went from being like, this is blank cancer.

To being like, you know, molecularly four year specific cancer. Here's like, you know, the promoter cell that, like the promoter protein that's like, you know, doing weird stuff like exact precise druggable target, real clear physiology. Um, I think that probably schizophrenia will be one of the first conditions where something big comes through.

And probably in our lifetime we're going to redesign the boundaries between a lot of the serious mental illness conditions several times. It's already happened several times in our lifetime already between like D SM one and the current D S M, but I think we'll see more of that. This

is a space I'm curious about, but I will admit, I don't know a whole lot about, are there any F D A approved biomarkers for mental illness that you guys know of?

And if so, what is, why aren't they used clinically? Um, and if they're not, do you think if there's an FDA approved test for say, let's take schizophrenia, um, will, is the market ready for that? Will we start using it or will we are not. And, and this is kind of on the basis of changing clinician behavior, um, is, is.

It is not easy. And I think, uh, a lot of what I'll say weak, although I, I think you guys are on a different bracket, uh, than me, um, due as investors is identifying, is now the right time? Is the market ready for this? If this technology solution was to be developed, um, and developing it is one, one part, but will people buy it?

Will people use it? So do you guys think, um, the market is ready for an FDA approved test or if there is one, um, why hasn't it achieved market adoption?

Sorry, go ahead. I see I've seen a lot of, I, I don't know offhand what is and what's not approved. I have seen a lot of pitches in the form of, uh, you know, next generation sequencing test, predict your probability of, you know, responding to sertraline or something for depression. I find those, I've seen a lot of ideas like that.

I personally find them hard to commercialize and uninteresting. I think that part of it is that the answer that you give clinically probably doesn't offset the cost of the test. The way we pay for mental health care for commercially insured, middle-aged people is kind of busted. So that also makes it very tough to like justify a test like this.

And then the effect sizes that we see in our antidepressants when they work is so mediocre in candor. Like I just see it as a very hard problem to solve based on the state of the drugs we have, the quality of our treatments, the way we pay for it. Um, I think the reason that schizophrenia was a very popular area of innovation, especially like in the nineties and two thousands with pharma companies, is that.

For a very cynical reason. There's this intersection of schizophrenia and the law. The population is so devastated, such a large number of people are, um, court ordered to be on treatments. There's like such a cynical reason why that field had an explosion of like depot formulations of drugs based on sad things, true about our society, sad things true about that disease, and then sort of strange things about how we do patents in this country.

But I bet probably for, you know, if there's some opportunity where a biomarker drug test can inform something, and if it sort of plays into some of those same market dynamics, I could see something potentially being successful in schizophrenia. Yeah, I think there,

so we we're invested in a company called Arpeggio that has an r n A sequence that there, there are a whole bunch of, and we had done sort of a deep dive into some of this stuff when we were doing due diligence on this company.

And I think there's a host of biomarkers. And so, you know, in bipolar disorder there's a specific SNP in the gene encoding for glutamate, um, decarboxylase and GAD L one that's associated with, uh, reactivity with lithium. So there is a host of SNPs from the chromosomal level of dna, genetic biomarkers that are really.

Useful indicators for a state of disease and severity. And the first sort of stuff is being, um, done ar around bipolar disorder. There's a host of transcriptomic biomarkers for like neuropsychiatry stuff. So, um, there's gene expressions and there's microray studies that have been done on, on things like certain gene protein, K D X, D one, MMO 28, these things that are, they're clinically associated with major depressive disorders.

So those transcriptomic things are coming down the pipeline and then not associated with the company that we looked at, but there are these promo, uh, proteomic biomarkers that, you know, they buffer their specific for. Neuropsychiatric things like schizophrenia and like these, and I don't know enough about this, but it's, you know, synaptic function, calcium, homo stasis, energy metabolism, all these things that go into these neurotropic factors, these BDNF factors that look at whether or not, um, uh, uh, someone has a condition and things like l AEL to carnitine and L A C is a proteomic biomarker and major depressive disorder.

So there's a whole bunch of these things. The thing I saw today in the news was something about neuro film neurofilament light change. These NFLs have been, uh, proposed as biomarkers for neuro damages and certain psychiatric diseases. So that whole area of metabolomics and biomarkers and stuff is coming down.

And then there's, you know, epigenetic markers. So there's a huge amount of this going on this, and this just goes back to my original point, like I'm not an expert in neuropsychiatric biomarkers. So before we invest in a neuropsychiatric biomarker company, like you need to go really, really, really deep.

You know, under, I mean, I, I knew nothing about glutamate, decarboxylation, gad one genes until we invested in this company. But it was literally three months of deep research into epigenetic biomarkers, potential biomarkers, antipsychotic drugs, like all this stuff that they were working on. They had, you know, prostate res or metastatic prostate re resist, um, prostate resistant cancer.

Like, just, there's so much in it that you have to spend some time going deep. So, you know, there's a lot going on in a lot of these spaces and you, it, there's a lot of rabbit holes to go down. So make sure that your, your friendships and your marriage can withstand it If you wanna become a vc, cuz you spend a lot of time in deep holes looking at things that people think are, you're crazy.

Let's, uh, let's talk about this a bit more when it comes to diligence. How do you pick what you should know in depth and what you can outsource? So things like, I think, um, some investors will outsource their legals to an extent. Um, or if we are not software engineers, their, their technical diligence to an extent.

Um, how do deed is it, I have tried to understand everything in its entirety that I invest in and it takes a very long time and I don't know if it limits the time and energy I can devote to other dean floor or other avenues which would drive a better return. How do you decide where to focus your energy and what, what parts of diligence to outsource and what parts to do yourself?

I'll tell you what I

do. I ask to be CC'd on every email that goes back and forth. I don't necessarily participate in every email, but I learn. By watching. I'll tell you, we're doing a deal right now with one of our port codes that they're signing a in-licensing deal with, uh, another company. We don't have the depth, the company doesn't have the depth.

We found an expert, this guy's an mdm, b a, spent his career doing these biobank deals of upfront costs, royalty structures, back in like all of this stuff. And we spent 30, 40 hours with him designing that deal. Now, the next deal we do, cuz I read 6,000 emails that went back and forth. I could probably do a biobank deal at this point, right?

But it took 1, 2, 3 of them to figure it out. So I think part of this is just keep your ears, open your eyes to the, you know, your eyes open, ears to the ground, and just take in as much as you can. But the biggest thing that I've learned is understand, like you said, some of this, you can't fake it till you make it in this business, no matter how hard you try.

No matter how hard I tried, like I'll, as I'll admit, I tried to do that and got busted very early on and then was just like, you know, it is better just to say, I don't know, and go get the, there's enough money in the system to hire these, you know, folks who help these companies out. Um, so we do as much as we can and then there's a limit.

And then, you know, identify that limit and go get people. It doesn't mean you're not smarter, you don't understand. It just means you, you know, your job as a VC is to be good at a lot of things and not necessarily go super deep in one thing unless that's the kind of fund you are. Legals, for example, like, you know, I understand how to write a term sheet, how legals are structured per pass, do how to do warrants, how to do all the things from experience, but we have lawyers who do all that.

I mean, we don't try to write our own even, we don't even try to write our own term sheets. I mean, we have lawyers who do all of that so that mistakes aren't made right, but we understand how to do it and we double check everything. And we work with these lawyers very closely to make sure, I mean, they miss things too.

Now with the advent of Chad g p t, maybe nobody misses anything on the legal side, but we still use lawyers for everything. So I think it's, it's important to understand where, where you should spend your time digging deep. You know, there's no one on my team who can. Who would understand the challenges of neuropsychiatric epigenetics, you know, that's something I have to do, right?

I'm, I'm the healthcare person. Like the FinTech guy is not going deep on that. So it's understanding what you're supposed to do and what you can do. Yeah. Simon

would love your

thoughts.

I like that. I, you know, to echo woman's point, my point of view is shaped by the fact that my fund is small. My resources are tied by virtue of essentially being an early fund.

Uh, and I'm like our full-time gp. I've got like two fractional gps, but I'm like, you know, the main person. I like to think of the company in terms of what is it to major access of complexity. Like what does this company fundamentally do? And do I fully, totally, completely understand that? To take a very strong point of view, often very early, often before official product market fit, that I think that there's a path forward for this company.

And the painful thing is I have to feel comfortable knowing that I can do that and then doing it quickly. I've seen so many deals where I'm like, this is awesome. And realistically, I don't have the bandwidth to become an expert and actually do proper diligence in this. So to on it's point, if I'd seen, um, if I were exploring, you know, another, uh, biomarker company, unless it happens to be an area that I already have depth and understanding, and I probably wouldn't have like the resources in bandwidth, at least for my fund, its strategy, the team, et cetera, to like actually go and become sophisticated enough to know that I'm doing something smart.

And then our motto is very much, you know, if we're not. Very smart. If we're not able to have a sophisticated, sophisticated conversation with every key person, understand what they do, understand the quality of their work. If I don't really understand what the customer wants, ideally even know a bunch of customers who I can call to for feedback and like, you know, get a sense of what it looks like to sell if I can't be valuable to them.

Um, even if it's an awesome company and it looks like it's going to make a lot of money, if I don't feel that, have the discipline to say like, full company, full opportunity, not right for us, like, you know, we're not good at this by virtue of the fact that our fund is small, everything we do is syndicated.

I really like to go for like every early stage fund is usually like generally okay to good at everything and then like outstanding at one or two things. And I love having partner funds that. Compliment the areas where I'm outstanding because when we do deals together, we're very good at spotting from our like outstanding points of view, things the other person missed.

And it's really important to me to encourage companies very early on to have formal governance and to build a board that compliments the perspective of the investors and the skills of the founders.

Yeah, I think that's very important. Just one comment that that ties into it. Somebody says it's. Where you are on this investing chain, right?

If you're a series D or late stage fund, this is very different than what somebody and I do, which is early stage seed, a kind of investments where you can learn everything you need to know. But there's no way if you, if you can do due diligence and figure it out, then it's not an early stage company, right?

Like the fact is we're making investments in seed and a's cause the upside is huge because they haven't figured it out yet. Right? The point is, is that we think they can figure it out and then that's where the inflection point of the hockey stick will come and they'll grow like crazy. So you can, you have to be comfortable getting to a point of understanding enough, but not all of it.

And so I don't want people on this call to think that the intent is, You know, neuropsychiatric biomarkers. Understand how, you know, you gotta be Watson Andrick and figure out DNA A like that's not what we're saying. I think what we're saying is like you have to have enough understanding of knowing how deep you need to go.

That you're not, like somebody says like gambling on the street, like that you're not gambling. Like you understand enough to know whether this is gonna work or not, but you don't have all the answers. And that's the art and me art and science of early stage investing.

Perfect. Let's go back to cosa. Um, he has famously made statements about physicians and how the future physicians will be actors and counselors with AI or a solution providing the clinical backend with the f FDA pathway of software as, uh, medical device specifically, if you're a clinical decision, a tool, you don't require f d a approval.

It has opened doors. And this is getting a very crowded space where solutions can get to market fairly quickly. Um, talk to me about, do you think this pathway is a net negative or positive on OSA's vision? And then do you believe in his vision or do you think that's an accurate vision, um, that will happen in our lifetime?

And if so, what will happen in the next 10 years or the next 30 years?

Um, I, so

I can, you know, George Hinton quit write Google that. This is it. He was one of the first ones to say, and this is dear to my heart, right? Because ve George Hin, everyone said radiologists are the first ones that are gonna be replaced by ai. I can tell you. As a radiologist who uses AI every day in sort of clinical practice.

I think it's, I, I think it's far away that it's a replacement. I think the concept that AI becomes a clinical decision aid is it's here today. I mean, we use it already and I think it's incumbent on the physicians to get involved and develop out the technology so that it can do that. Now, here's the interesting about healthcare investing and being a physician and investing right, is I work with a lot of, in my, the clinical trial company that I had started and read, we did all of the FDA approvals for all the radiology AI devices in a way that we could control it, but also get a deeper understanding.

I can tell you the technologists we work with who are not physicians, didn't understand. They really thought when they got into this, they said, we're gonna start a company and we're gonna replace radiologists. And then they start doing the tech part and they go, God damnit, this is pretty hard. And just finding a nodule on a chest x-ray, it was a huge, difficult thing to do, let alone find the fracture, the pneumonia, U I P D I P, pneumo, Steinem, the list goes on, right?

I mean, we look for a thousand things on a chest x-ray, 20,000 things on a CT scan. Like it's not a trivial technical problem that there's an, there is, you know, chat g d came out March 9th, right? The stuff, the pace of acceleration is every day or every week. So by no means am I suggesting that it's not gonna get there.

But I think that it continues to be where AI is an adjunct to the clinical decision making and it makes us better. And the example everyone gives me is, you know, they say when calculators came out, everyone said CPAs, were gonna be out of business. Well, you know, CPAs are still around calculators, the tool that they use, computers came along, et cetera, et cetera.

Self-driving cars. You know, we're looking at a company right now that are adopting self-driving trucks. What they've done is they've elevated all of their drivers that are now sitting in a control center, and they each control five trucks. And so they're manually controlling the trucks in the dense geographic areas where there's humans.

And then once they get onto the highway or freeway, they click it on and auto goes. So that's how, you know, a, the self-driving truck has not replaced the truck driver. The truck driver's just become more sophisticated. So I, I think it becomes, continues to be an adjunct to clinical medicine. I don't, I think there's, there's a, a few things that, where it can completely replace what physicians do, but those are menial tasks that probably we don't wanna do anyway.

If someone can get AI to put in central lines for me, I would love it.

Oh my goodness, that my day's so much easier. I would love that Peripheral IVs. I would just settle for peripheral IVs on it. If I got good IVs on all my, it'd be my nurses would be so much happier. We'd have such an easier time hiring.

Uh, you know, I totally agree. I think that a lot of what the future will look like will look more similar than not. I think the weird rituals and sort of spiritual nature of caring for those who are ill, um, I think there are stronger forces for how it looks, something like what it looks like today than simply, uh, the underlying technology.

Um, I think that a lot of what is new and innovative has echos and things that have existed for a long time. You know, in the eighties and nineties, you'd do some regressions, publish in the academic literature for prestige and put out a model like, you know, Chad's VASc Today. You'd do it as a black box you'd never publish with the actual breakdown is, and you'd be like, you know, for a dollar, I'll tell you if you should be on anticoagulation.

It's a test and it's like, you know, a virtual diagnostic and it's, you know, a very similar idea, but it's just done in a different way. You could look at that and feel like it's a profound change from how it's been, but in a sense, you know, knowledge tools, they make us better, they've made us better. It certainly makes me take better care of patients.

You know, today, if I have to, you know, calculate a feena, I do it on MD calc instead of doing it manually, would really love just to get the number, you know, populated automatically. But, you know, this kind of acceleration, these tools, they'll make me do what I actually enjoy in my day. They'll make me take better care of patients.

I think my job will get better, not worse. Is my, you know, high level point of view. Awesome. Perfect.

Uh, Amit, any last piece of advice for physicians? Uh, this is last question. Watching this, if they want to transfer intervention capital and maybe talk about what are a couple mistakes you've made, um, that you can share with us and we, physicians listening to us can avoid those.

Yeah. My advice would be start with angel investing. Get really deep, deep, deep, deep into Angel, and that means write a bunch of checks. So put your money where your mouth is. Get involved with the companies, you know, sit on boards, help the founders, and then three, work on network. So with those three, you do that as an angel first and really decide, do I like this?

Like it, it's, it can be pretty stressful as a vc, you know, you make, there's lots of money riding if the fund doesn't do well, all those kinds of things, which, um, is fundamentally different. I'm not to say that physicians don't have stress, but it's a different kind of stress. If, you know Sumit, he's in his own fund, right?

Like I. Tons of LPs that we gotta answer to. We have LP calls every month, like it's, it can, when numbers aren't good, physicians aren't used to answering to someone else. We're our own bosses for the most part. You're entering a world where you have a boss to some extent, and I don't care if you're a GP or not, you still have an lp unless it's your own fund and your own money, in which case you're an angel investor anyway, just on a bigger scale.

Right? So I would say that's how I would start into this is, is really get deep in Angel and make sure you like it, and then you'll matriculate because you'll spend your time doing this and you'll get a track record, you'll build the network, you'll make money, and then you'll start moving up in that ecosystem.

That would be, that's how I would tell everyone to start. Um, as far as mistakes I've made, I think there's, there's three areas where I've made a mistake. One is something called deal heat. I've gotten so. Ingrained spent so much time, energy, blood, sweat, tears on a deal that I got so deep I couldn't step back and realize that this was dumb.

Like it was a bad, they were bad comp, like it was a bad company, right? And I just spent so much time that I had to spend the money and, you know, love my partners. But depending on structures of how your funds work and stuff, I have a certain amount of autonomy in our fund because, like I said, I'm the guy who's gonna do the deep dive into neuropsychiatric biomarkers.

And the AgTech FinTech guy doesn't even know how to spell dna, right? Mm-hmm. So there wasn't, there isn't someone to tell me that this is bad, except for, you know, either the deal is bad because the numbers are bad, or the cap table's bad, or the, you know, CEO's a criminal, whatever besides dosing from the actual science.

And is it so deal heat was number one. Number two is never undervalue the network. I've met people, and you hear this all the time, right? Talk to the janitor, talk to the ceo. Like, I have been sent deals by people who I would've, like I met years ago, we had a conversation at a cocktail party, and then next thing you know, they're bringing me the next Uber kind of thing.

So never undervalued. These relationships, like in venture, relationship is relationship. And the third thing is sort of is, um, never underestimating the need for continued learning. Like, like I read every day, obsessively, voraciously, I read lots of blogs, listen to podcasts, et cetera. Like I think to be a good vc, like you have to have a deep understanding across a lot of disciplines.

Like it's not just healthcare that we're investing in. We're investing in healthcare as it. Um, it fits into the rest of society, right? And so macroeconomic trends, crypto, all this stuff that's going on in the world has an impact on healthcare, people's wellbeing, investing, the actual dollars deployed, you know, the, all of that kind of stuff is very important.

If you're in a fund. Now, if you're an angel investor doing single deals, it's not as important. But in a fund, you have to think about these things because when you go to an LP to raise money, there's other things on their mind than just GDPs a trillion, you know, healthcare, GDPs trillion, we gotta invest in healthcare.

Healthcare is the best thing to invest in. Like, they don't all think like that. So you have to understand what are they looking at and what are they. So it's more than just medicine as being a healthcare investor.

So that, that

is an amazing answer. Amit, thanks for sharing that. Love the framework around deal heat and sunken cost fallacy. And, and, and the more you learn about something, the more energy spent, um, the more you want to. You want to congratulate yourself or, or you, you hesitate to admit maybe you wasted that energy, um, in that time.

Yeah. So that is really important. So I'd love your answer to this and I would like you to touch on speed of iteration. It's a fairly known path to success for startups. Do you think that's true for investors? And if so, what is some advice you have for investors and how can they iterate fast when the outcome may not be known for a decade in some cases?

Totally

cool question. Rashad, you always have excellent questions.

A lot of general practice advice for founders often breaks down in healthcare, in part because build is expensive, deployment is expensive, and your buyers have a lot of structural reasons to favor downside protection as opposed to upside maximization. I really like how Stanford biodesign on the med tech side thinks about device iteration, which is very much like kill your ideas early air on the side of killing ideas early.

Cause once you build, it's gonna be like a big effing deal and you really, you know, very expensive to make mistakes. So you probably don't get to fail as much as people whose entire company you can build on credit card level debt, fail five or 10 times, iterate product in a few months. So I would say very much depending on the sector of healthcare or life science, think very hard about.

Your tolerance for risk and ability to, you know, iterate and get feedback. Um, and in general, think about maximizing. If you are in one of those sectors where build is expensive and time is ex, you know, and it takes a lot of time. Uh, I think that there's some best practices that I can talk more about asynchronously.

Folks are interested, but Stanford Biodesign, I think their exact approach and how it differs from other startup, like, kind of like generalist non-healthcare like startup. Uh, advice, um, is very helpful in that regard as an investor. One practice that I've made it a point to do. So, Amit made a good point about, there's something very discursive about VC investing.

When you're part of a fund, you bring your ideas, you have an investment committee, and through this discursive process, like people, challenge people question, especially people from other domains who may not have like domain expertise in a sense, are, they're kind of like Beethovens in that, you know, by like, you know, they're like loss of one sense.

They're much better in others. They can challenge you and kind of ground you. Um, at a small fund, I have to do a lot of creating my own methods of challenging myself, especially as like the full-time gp, it's very easy for me to push any idea forward. So one thing that I do personally is whenever I invest, I make a very clear memo that is only for me.

Or beloved VCs who I trust were very close, but it's basically a letter to me through time being like, I made this investment and very specifically, this is how I think the company works. This is why I think it works entirely. My par lawns, all my numbers, all my logic, all my rationale. And I'm like, and I'm pretty sure this is how it's gonna happen.

Like, these are like, you know, my goals and expectations and like this is my mental model. And then I come back to it after the fact and I'm like, what did I miss? What did I miss? Where did I mess up? I also share this with my founders after I invest and I say, you know, this is my theory for your company.

And like, this is kind of like, you know, is your capital partner? Like this is at least like what my hopes, dreams, and expectations are. Like what do you think? Like, challenge me, push me, um, like, you know, help me sort of iterate this. I found that as a way to, in a sense, get feedback and hold myself accountable and be able to.

Improve on how I do otherwise by the numbers. You know, I mostly deployed for my most recent fund after May, 2022, which was the infamous month where the world exploded and, you know, markets tanked. And it was an awesome time to invest because everyone who I really wanted to invest in from the past year was suddenly doing seed extensions.

And I could show up and be like, yo, you know, like, you know me, you like me, my check is small, like your other investors won't be threatened. Hook me up, let me in. So I deployed, but like everyone who raised, basically raised for like long runways well into the future, so I'm gonna get no pricing feedback because basically, you know, how can I, we just deployed and everyone raised super long runways.

Their next financings are like, you know, sometime in the future. So I can't get, market feedback is hard in general as a vc, I certainly can't get any. Immediately and quantitatively in the short term just by virtue of the time when I deployed. So I look for other ways to hold myself intellectually honest and get feedback on like, this was a good idea, bad idea.

In terms of advice for folks, I would echo umit. If you do early stage, throw yourself into the company and use it as a chance to learn cross-functionally. I have had so much fun picking up skillsets, like hanging out with people who are great at enterprise sales and like reading, you know, how do you do sales qualification?

How do you manage a pipeline? Like what does that look like when it's best in class? All these random things that would seem totally unrelated to, you know, Like the science and everything else. And it's been so fun. And once you learn it in the same way, once I minted as deep dive into the epigenetic like biomarkers and psychiatry, it's like a fund of knowledge you can draw and draw on for like, you know, years down the road or your biobank deal is another example.

So throw yourself into the details in your port codes. And the other advice I would give, if I could go back in time, is for all your companies, always meet all the co-founders, meet all the major stakeholders, get a really good sense of like, you know, does everyone have the same like theory of what this company is, what the hopes and dreams are, how it's supposed to behave, what it's like capital expectations are, et cetera.

That alone will give you, um, a ton of feedback into how that company will behave.

Sorry about the

distraction. So

not at all. It's very cute.

Um, I, I think that is an amazing answer and I recommend everyone, um, time for by design. They're doing amazing work. I, I, I met them recently and I completely agree with your framework. The one last thing I would want to say,

you just drop her.

I gently put it

down.

Michelle, why you take that while you do that? Let's just, let's just answer a couple of these questions that came up in the q and a here. Go for it. Yeah. While you do that. So someone, Aaron Smith asked, what about accountable care organization? Would you invest or investing in such? For us, we're an early stage fund.

That's sort of later stage investing after, um, they've got the, you, we were one of the original investors in our last fund in Oscar. We were the series A, you know, 10 years ago. So an interesting journey into investing in insurance companies and understanding medical loss ratios and all of that goes into running that.

So I wouldn't say we wouldn't invest in an aco, but. By design. ACOs probably don't make a ton of money except for the, you know, the executive who are running them buying 10 million houses. So probably for that as a fund, we wouldn't. And then the second question in the, I'm very curious from your point of view of radiologist AI tools increase radi productivity.

Do you see a path where an increase of productivity in the field of reality leads to more demand? And Sumit can tell you this and, and you can ask any ER doctor who's worked in a ER that we're already there. Every patient that comes into an emergency room, whether you got a lump, a bump, a headache, or just don't feel well, you get a full body CT scan.

At this point. In the US at least, uh, imaging is used as a physical exam in triage. So that is part of, you know, it's interesting that you bring that up. That's the pitch I see when I look at companies that are coming, AI, radiology companies that pitch to us for investment from technologists, non physicians.

The very first slide under TAM is always, The amount of images are increasing, the number of radiologists are decreasing. In 10 years, we're not gonna have enough people. So you have to have ai, you know, not a hundred percent true, and, but it is true. Imaging is exploded. If you look at just Medicare, there's lots of folks that looked at Medicare databases of increase in volume of imaging every year.

Um, it's increasing at a rapid pace. So the use of technology to help make that more efficient is definitely a point of, um, a, a big investment for a

lot of funds. You know, I think of this story of light bulbs that I saw on Twitter, so it's true, it's a level of, you know, viral tweets and VC Twitter tend to be true, where the price of light bulbs went down by something like, you know, order of magnitude.

And people at first were like, oh, this is cool. Like, we're gonna spend an order of magnitude less on electricity because like, you know, most of it's light bulbs and that went down, but instead the world just became 10 times brighter. So I imagine that in the future, we're just going to do more scans. As an internist, I'm grateful because my ed colleagues are so bold about just getting the CT scan with contrast for everyone, for everything.

And if they didn't, then I would spend two days equivocating and pushing and like, you know, like kind of ingeniously trying to avoid it before, you know, reaching the same diagnosis days later. So I get to keep my high horse and be like, you know, I wouldn't have ordered the CT scan. Reason. Reason it,

and thanks for saving me. I, I wanna end with, to everyone listening, iterating on your decisions. Having a reflective, introspective approach is likely the, the best path to success here, I would think, is a book recommendation, thinking Fast and Slow by Danny Kahneman, a very difficult book to read, but I, I would try and get through it anyways.

Having a framework for decision making, having a framework for when to use your intuition, when to use structure, and having a framework for evaluating your, your decision making is critical. This is a game of getting to the truth. It's not a game of being right or wrong. It's a game of recognizing and deciphering the world as it exists.

It's looking at the incentives that exist in this world, then leveraging those incentives to pick winners. So, I'll pause there, but I, I'd love both of you to give your thoughts on what I've said and we'll, we'll call it a night after.

Please. We do our deal meetings via weighted criteria lists. We circulate, you know, all the deals, blurbs, et cetera.

Our criteria, we all in a blind wave, you know, go through. It's one of those very straightforward conman style, good decision making tools and I found that very helpful. I think the trick is I use it as a way to create qualitative buckets promising and not sometimes companies surface to the top that surprise me from that process, which is an awesome check to my own biases.

And I take it as you know, precisely, you know, approximately correct but exactly wrong. So if a company scores, you know, 18 versus 17, it's sort of arbitrarily precise to be like, that's a meaningful difference based on how I like, you know, index my scores. But stuff like that I find useful. Um, and I make it a point to have a lot of peer mentors and coaches.

Uh, basically friend VCs, other VCs, folks who are much better at this than I am who I turn to for help, who I regularly talk to is a way to make sure that, uh, what we're doing internally is good. One of those things, which is a downside of being a new fund, is you have to like, collaborate out to get that kind of coaching and feedback.

Yeah. Uh,

same agree a hundred percent. That's what we do too. I, what I try, or what I've tried to do in terms of referencing that frame over time has been, at the beginning when we would look at a deal or add something, I would go first out very quickly and I'd find a bunch of experts and then start talking to them and, and try to, you know, figure out what's going on.

What I do now is I spend a good amount of my personal time getting much further along on the curve of understanding before I go out so that the conversations with those people are a lot different and it's a lot deeper and a lot more intelligent. And then I'm asking questions that I feel now at this point, I've made this point earlier that as, as seed and a investors, We don't know whether or not the companies are gonna get it, right.

Right. We believe that the idea is good and that they will be able to execute, and the idea will be right. There's some inflection point where a company crosses over from the idea was good to the idea is working, and that's typically revenue and profit and all those sorts of things. I feel like my understanding now has gotten to a point where I'm, I'm beyond the point of do I understand how this biomarker works or is this good or bad?

It's pontificating on whether or not the company will be successful given what they've done and talking to those experts and really getting opinions from them that are helping me elucidate whether or not I think three years from now, the company's gonna be successful, not trying to understand how does an RNA sequencing technology work?

So that evolution in my learning as a investor has been the biggest change of, I think becoming a better investor and being very quick to. To quickly evaluate a go no go on deals. And I think a lot of the entrepreneurs and people we work with are very thankful that at our fund we'll tell you quickly, you know, yes or no, like kind of what somebody like, we don't know what we're talking about.

This is not a good investment for us. We're just, we can't, we're just, we don't know. We can't help you. So we're probably not a good fund and you really want help or you're, the way you're structured, numbers, whatever, don't fit with the way you know, what we need as a fund for ownership or whatever that may be.

So we're very quick to give you a go, no go within a couple of days for the most part. And I think entrepreneurs, when I was raising money for my company, I mean, that was the, the best thing I, I could ever hope for that. Don't string me along. If you're not gonna do it, don't do it. I, it's totally fine. You don't do it, but just tell me if you're not gonna do it.

So that's what I've learned from a framework of how to, how to work through these investments myself.

Awesome. Thanks everyone for joining and I'll put the recording out and send an email to everyone who was here tonight.

Thanks everyone. Thank you. Thank you guys. Cheers.