After selling four healthcare-related companies, the cofounder of a venture capital firm's healthcare efforts shares a bit of his strategic perspective.
This excerpt was first published Thursday, February 28, 2019, by Buyouts Insider's PE Hub Healthcare Wire, a sibling publication to HealthLeaders.
By Sarah Pringle
I'll be stopping by ACG's healthcare conference in New York City on Thursday night. If you're attending and catch me bourbon-tasting at the reception, come say hello!
One of the speakers is Andrew Adams, Oak HC/FT, cofounder and head of the firm's healthcare efforts. Coincidentally, I just wrapped up a Q&A with Adams, who, I learned, is currently binging "Escape to River Cottage" on Amazon Prime. I had to look that one up!
Among other things, Adams explained to me how the less-than-five-year-old firm best positions its portfolio companies for sales to strategics. His firm has sold four healthcare-related companies to date.
"When you’re [investing in companies] addressing those three central elements—cost, quality, and consumer experience—that creates sustainable value," he said. "Total addressable market is an issue we never address because it's always enormous. That's one thing that is attractive to strategics: growth runway."
Adams also touched on the evolving buyer landscape, what he looks for in entrepreneurs, and how his firm keeps up with the constantly changing healthcare landscape:
"If we find a low-cost operator that we think can be successful in fee-for-service, but can make that shift to value-based care, then we're not making the bet on value-based payments. It's hard to time that. But we invest in the ones that would benefit from that trend … We're not interested in being single-threaded on one thing like one regulatory change."
The full email newsletter is available at PE Hub Healthcare Wire, and the full Q&A with Adams is available at Buyouts Insider.
This post was edited by HealthLeaders editor Steven Porter.