(Photo by Christopher Wink)
It figures a personalized health accelerator would want to personalize the experience for its companies.
When Virginia health system Inova Health closed on the 117-acre former Exxon-Mobil campus in Fairfax back in 2015, it was clear there was plenty of space to do something bold. (It was called the real estate deal of the year.) And from the start personalized medicine was going to be the focus.
By September, Inova will formally launch its personalized health accelerator, said Managing Director Hooks Johnston, a Virginia IT business and investment veteran, who founded Valhalla Partners. The former entrepreneur was brought in, along with fellow Managing Director and enterprise tech veteran Pete Jobse, to give the company’s corporate venture arm a bit of gravitas. Like other corporate accelerators, it will be a small budget item for a nonprofit health system with $3.5 billion in annual revenue. Yet, it represents a major part of Inova’s future strategy.
“We’d love to build a cluster in healthcare and wellness,” Johnston said of the heavily wooded and secluded campus near to its Fairfax Hospital. The company is consolidating several of its existing units, a corporate venture arm and the accelerator, with room to grow. “We need to create enough matches to get a spark there.”
The application process is online, but Johnston said they aren’t formally accepting applications yet — that’ll come in September. Building out the program is taking time, he notes, since the Inova team very much intends the program to start a bit more handcrafted than the well-oiled and replicable accelerator programs you know (with their start dates and demo days). Each company will have a specialized offering, he said.
Here’s the line you’re looking for: Inova will offer a “relatively modest” $75,000 check in exchange for 10 percent equity in the companies it accepts, said Johnston. (Johnston is particular about how that’s positioned: he says the equity is the cost of the program and the check is just one part of that offering.) Still that’s a relatively high $750,000 valuation for an early-stage accelerator, predicting its likely marketplace targeting. The companies will be run through a four-to-five month “individualized program,” with goal-setting, mentoring and the like, with the expectation founders will graduate into raising outside money. After the program, if a founder can get $250,000 in third-party commitments (“not mom and dad,” said Johnston), Inova will match it.
Johnston, placid and soft-spoken, was speaking at Startup Grind, the global collection of monthly gatherings for new entrepreneurs to capture wisdom from onstage fireside chats and other events. It’s organized locally by Brian Park, who interviewed Johnston Thursday in high-backed leather chairs in front of a few dozen inside an otherwise quiet 1776, itself an incubator with healthcare interests.
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The companies that make it through the accelerator would then be in reach of Inova’s existing $100 million corporate venture arm, which launched last year with its own application process and committee, in addition to access to partner funds. All along, companies are expected to have access to the Inova network, being a potential customer for the companies it services.
“Companies will come at very different phases, so we want to plan individualized plans for each to go through the program with a planned action plan,” Johnston said. “We want to be graded on the quality of our offering.”
What kind of companies will fit into the “personalized health” and “precision medicine” categories? It’s a big range, said Johnston, from predictive analytics, artificial intelligence, big data, wearable devices to newer corners still. For now, Inova wants to hear what you got.
The accelerator will have two dedicated full-time staffers to start, said Johnston, including a confirmed, but not yet named, five-time repeat healthcare entrepreneur who took a company public and raised more than $120 million in outside capital.
The accelerator will start with just a handful of companies, likely accepting eight to 10 in the first 12 months, Johnston said. At scale, the program plans to host a dozen a year. The vision is that the most successful companies they incubate might lease additional space on their campus, leading to a kind of healthcare innovation campus, with the niche focus on personalized medicine.
Even on the question of company scale, Johnston alluded to it being pre-launch but expressed they’ll be choosy.
“We’re going to like to see self-evidence of real intellectual property,” he said. An algorithm would need to be able to perform some meaningful insight for a physician, a device would need to have a functioning prototype.
In investor circles today, you tend to find of two types: the showmen and the risk-calculators. Johnston seems very much the latter. When asked by Park, a D.C. tech booster, why the region is a good one for startup activity, Johnston, who has been investing and living for 30 years in the D.C. area, offered no civic platitudes.
“If you’re an information technology company, Silicon Valley is still the place to be,” said Johnston, who lives in McLean, Va. “But healthcare companies are more scattered. Your community is really the people who care about the same issues you are. You want to be the best in your discipline area, not the best in the D.C. area.”
But of talent workforce and customers and resources, it’s here Johnston relented.
He said: “You don’t need to move from D.C., you have it here.”