2nd of 2 parts
By JIM STOMMEN
Medical Device Daily Contributing Writer
Kay Koplovitz is chairman and co-founder of Springboard Enterprises, a platform where entrepreneurs, investors and industry experts meet to build women-led businesses. Springboard educates, sources, coaches, showcases and supports high growth companies seeking equity capital for expansion. She also is chairman and CEO of Koplovitz & Co. Koplovitz was the founder of cable TV networks USA Network, the Sci-Fi Channel and USA Networks International. She talked with Medical Device Daily Contributing Writer Jim Stommen about Springboard's push for women entrepreneurs.
MDD: Do you lump HIT companies under life sciences or under tech in general?
Koplovitz: We do healthcare IT companies under life sciences. It somewhat depends on what their product or service is, because it could end up under technology. Usually, it's the insurance companies and healthcare providers that are interested in HIT, so generally they are part of our life sciences area.
MDD: Life sciences is a broad category. Which areas of focus within that category seem ripe for development?
Koplovitz: HIT certainly is one of the hottest areas right now. I can give you an example: A couple of years ago, we a call-out specifically for healthcare IT and we only got a few applicants. This year, we had a huge number of healthcare IT companies apply at Springboard. It was a very decided difference, so it really as picked up dramatically and as far as the investors are concerned, healthcare IT is high on their investment list.
MDD: Having massive federal investment aimed at it probably is a big part of that, but the other part, I think, is that HIT finally is getting its act together.
Koplovitz: Yes. We've been talking about it for a long time, a couple of decades, with people really talking about it back around 2000 and looking for ways to bring the management of healthcare under cost control by bringing in technology, but that whole effort was much more expensive because technology a decade ago was much more expensive. Today technology is extremely accessible at affordable prices for companies in that area, so I think it's finally starting to take hold. In healthcare service, the interaction between the patient and the healthcare provider is leading the way on a lot of this healthcare transformation.
I think that will continue as people are more facile with technology and the use of technology. The use of apps has made a big difference in what people are willing to do. And there's another side of health technology, that is using technology to make a number of different kinds of readings of people's conditions without people actually having to go into a doctor's office and things like that. So a lot of that is coming down the pike.
When you're talking about that, that mobility and the mobile devices that support it would be taken into our technology forums rather than the health forums, because it's really basically a matter of technology. You could have interested investors on either side of something like that. We do have a company in this year's life sciences class, AFrame Digital, that is developing a mobile sensing-based health monitoring product for hospitals, rehab and long-term care centers.
MDD: Within the device piece of life sciences, what areas do you see having a particularly strong focus?
Koplvitz: I just think this mobile reading concept, whether it's blood glucose or heart rate or blood pressure, cholesterol, that's full of promise. Also in our class this year, a company called Careticker is a mobile and web-based platform empowering patients to take charge of their care while allowing doctors to monitor their progress before and after major medical procedures. So people don't have to run back to hospitals and doctors for readouts afterwards. Another device company in this year's class, HDH Medical, has innovative devices to treat arterial aneurysms, occlusions and traumas by minimally invasive laparoscopic or open vascular procedures. There are a lot of devices in this year's class, actually.
MDD: Describe the profile of a typical candidate company. What are the keys from your perspective?
Koplovitz: Well, I would say that most of our entrepreneurs in life sciences have 15 to 20 years of working in the field under their belts, whether in biotech, devices or diagnostics. They are well-educated many have PhDs in their field they have worked in their field, so many of them are taking a considerable amount of expertise and walking out the door and creating their own companies. So I would say that is a very typical profile of our entrepreneurs in life sciences" Highly trained, educated, highly skilled from the work force.
MDD: Venture financing in the U.S. has been in a profound slump for several years, but seems to be stirring of late. What has been your experience in helping your women entrepreneurs negotiate this minefield?
Koplovitz: That's really very much a focus and part of our process. We do have term sheets they can look at to become more familiar with terms; we have a bevy of lawyers who are pro bono to our organization who are willing to speak to these entrepreneurs when they are negotiating. We do advise them to get their own attorneys, of course that's really important, because in venture capital the terms are as important as the amount, and sometimes more important. And there's the matter of valuation, because there's an equity piece being negotiated there as well.
If you have just spent 20 years in a laboratory, you would probably have zero contacts in the venture world and no knowledge of what a venture term sheet looks like, so part of our value is taking people through those paces and understanding what that process is and what the investors expect. Even if they have their own attorneys, if they get stuck or are undecided as to whether they should accept a term, we are there to help them think through the process and what it means to them. It's a very different language. All these kinds of governance issues are a whole field unto itself for these start-up companies, and that's part of our expertise.
MDD: I often ask the question of VCs, "What's more important, the people or the idea?" my impression from what you've said already is that it's the people with whom you're involved.
Koplovitz: Oh yes. Investors invest in people first and businesses second. That would be generally true across the board. VCs expect a certain amount of failure in their portfolios. You really do look for people you feel can deliver. You have to like the business, but if you like the business and don't like the person, you really shouldn't put your money there. A business model always morphs or tweaks in some way or another. There is always some transformation, and you expect that, but you have to believe in the person who is going to drive this across the finish line.
MDD: You get exposed to an awful lot of innovation through Springboard. What is your impression of the state of medical innovation in the U.S.?
Koplovitz: I think the system of American capitalism still has a very strong innovative streak in it, and I do believe that we're at the beginning of an entirely new field of innovation in many areas because of the advances in technology. The combination of technology and life sciences, the understanding of the human genome this is such a wide-open field.
Are we losing people or opportunities to offshore? There are very aggressive centers in Singapore, in Seoul, in Beijing, to name just a few there are many, many others who are very strong in innovation and are putting massive funds into innovation. Several months ago I was in Singapore and visited with a gentleman who is rresponsible for stem-cell research in conjunction with Duke University. They have 800 scientists working on stem-cell research.
Some of the real advances are coming out of these centers, and I think that from a government policy point of view, I believe that we have to invest in advancing technologies such as clean tech, green tech and alternative energy. We should be the leaders in those fields and we should not give that up to others.
MDD: Once they have presented at one of your forums, women executives become part of what you call the Springboard Trust. Could you give me some instances of how they go from "Here's what I need" to "What do you need?"
Koplovitz: It's very interesting, because quite a few of our entrepreneurs have had liquidity, which means they've sold their company. Some have started up other companies; we have lots of serial entrepreneurs. But some of them want to become part of giving back, to pay it forward for others. They become coaches and advisors to upcoming companies in our basket. This is a community that is growing by keeping people in our network; it's a really important ecosystem. When we started with women entrepreneurs back in 2000, $104 billion had been invested in venture capital in the previous year but only 1.7% went to women. Today, women represent 12% of the entrepreneurs funded by venture capital. We are building out this ecosystem behind them; it's the human capital that is so important. It's so valuable and we have such great expertise in our network. That's a large part of the reason our companies are so successful.
Published September 20, 2012