VC Start-up's $55M Backs Black Healthcare Entrepreneurs

Jumpstart Nova founder Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success.

By some estimates, there are nearly 785,000 companies in the nation's healthcare sector, but only 35,000 – less than 5% – are Black-owned.

Jumpstart Nova, a newly launched, Nashville-based venture capital start-up, hopes to change that.

Touting itself as "the first venture fund in America to invest exclusively in Black founded and led companies at the forefront of healthcare innovation," Jumpstart Nova is backed by $55 million in assets, well oversubscribing its initial $30 million goal.

The need is there, Jumpstart says on its homepage, because "decades of chronic underinvestment in great Black healthcare founders (has) created an opportunity for a fund to focus on and invest in them, exclusively."

The fund's blue chip investors and healthcare partners include:  Eli Lilly and Company, HCA Healthcare, Cardinal Health, Atrium Health, Henry Ford Health System, LHC Group, Meharry Medical College and American Hospital Association. In addition, Jumpstart Nova launched with partners Bank of America, Pinnacle Financial Partners, FirstBank, Ingram Industries and Vanderbilt University.

Jumpstart Nova founder and managing partner Marcus Whitney speaks with HealthLeaders about the fund, why it's needed, and the metrics they'll use to measure success. This interview was edited for brevity and clarity.

HealthLeaders: Are you targeting a particular area of healthcare for investment?

Marcus Whitney: It's broad. I would have said before we pulled the whole fund together that we wouldn't do anything in life sciences. But we did come out of the gate with a cell and gene therapy commercialization company.

We've got a specific list of the types of companies that we're looking for and we put those on our website and in the criteria section.

HL: You stress that you are Black-founded and led. Why is this important?

Whitney: It's two big things. The first is healthcare is almost like a utility. It's one of the few universally used services in America. When you look at the percentage of the population that Black people make up in America, and then you look at leadership in the healthcare industry, there's a pretty big delta between those two percentages.

Then, I would say that innovation has now finally arrived in healthcare and everyone recognizes that, to improve that cost-quality ratio as well as to address significant health equity issues, we're have to innovate and we're not able to do that with our existing systems.

Venture capital is an important component of healthcare innovation. So, for those two reasons, we need more Black-owned and led healthcare companies because there is no avenue where diversity, equity, and inclusion are most important than healthcare. It has the most to do with the change that we're looking to make in the healthcare system to make it more equitable for all, but also we want to bring as many diverse minds into the healthcare innovation ecosystem to solve problems for everyone.

Limiting where we're getting our ideas from or who's building those companies to certain demographics is not good for any of us. We're taking on the challenge of focusing on this one demographic, but you've got to find venture funds that are focusing on others and more broadly looking at underrepresented groups to level the playing field for the benefit of everybody.

HL: Do you think that your fund would be particularly receptive to entrepreneurs who address social determinants of health?

Whitney: What we are most in a good position to do is to get to know the ecosystem of Black founders in the healthcare space and support them broadly in any way that we can, but also find the ones that are qualified -- specifically because of our knowledge, our background, our network, our existing strategic, and limited partners -- to  help those companies be successful.

We anticipate that some of these companies, because they're Black-founded, are going to have personal stories that drove them to create the businesses. Some of those personal stories will absolutely have to do with health inequities, and so they'll be driven and passionate about solving those problems. We want to back to those founders, but we also think they're going to be founders who are going to create solutions that are going to be great for problems that all people are struggling with today. For us, it's about understanding and being able to best support this group of founders that have been chronically underinvested in.

HL: Provide an example of one of Jumpstart's entrepreneurs who might otherwise be left behind.

Whitney: The founder's name is Derrelle Porter. He is an MD/MBA from Penn who worked at McKinsey and spent two decades working in pharma in senior leadership positions and strategy and commercialization at AbbVie, Amgen, and Gilead.

He has launched a company called Cellevolve Bio, a cell and gene therapy commercialization company. This company is incredible, a new type of biotech at scale to bring cell and gene therapies to market, something that nobody's figured out how to do. When you look at his background, how uniquely qualified he is for this, his understanding of the space, he's incredible. Getting funding at the seed stage is very difficult but we were able to be the lead investor, take a board seat, and push his seed round across the line to get it closed.

Some of it is meeting these founders at these critical inflection points where they need someone who will step up and lead and say "I'm backing this person. I'm going to put capital in. I'm going to take a board seat. They're going to be great." Then, others will follow along.

HL: Ultimately this is about private equity and making money. How will you measure success in five years?

Whitney: We see the social component as built in but not something that we are going to quantitatively measure. We will qualitatively measure that. Our quantitative measurements are the success of the fund and the success of the companies and the success of the founders that we invest in.

We were clear about that on the onset. It's very easy with this type of a company and investment thesis to move to an "impact investing mindset," but that's not our mindset. We're a healthcare venture capital fund. We have a very specific look through to what the makeup of the funding team needs to be and we believe that, just because of the chronic underinvestment of the teams that have this particular makeup, it's ripe with fantastic opportunities for investment.

The byproduct of that is that we're going to get different types of companies leading in different ways, solving different problems. In the end, there will be some great social benefits from that.

HL: Does making this about the bottom line simplify your message?

Whitney: We don't we don't want to say this is just about giving people a chance. We're trying to grow an institution that we think can be incredibly successful. So, we have one single goal ultimately, which is find the best Black-founded and led healthcare companies in the market, successfully invested in those companies, and support the for great outcomes, period. We think there will be tremendous byproducts as a result of us being successful in that one clear goal.