Putting Women’s Health First, Part 1: Avestria VC Co-Founder, Managing Partner, Linda Greub, and Partner, Tracey Dooley, MD

Yolanda Fintschenko
This is the Startup Tri-Valley Podcast, featuring in-depth conversations with the leaders who are making the Tri-Valley the go-to ecosystem for science-based startups. I’m Yolanda Fintschenkoo from Startup Tri-Valley.

Lynn Naylor
And I’m Lynn Naylor, CEO of the Innovation Tri-Valley Leadership Group.

Yolanda Fintschenko
So probably the best place to start is how we came to find out about Avestria. So Lynn and I were recording a podcast with Neil and Russ from Raydiant Oximetry. And at the end, when all the mics were off, we got started on a discussion about funding women’s health. And as we were learning about the struggles to get funding for women’s health solutions, Neil was saying basically for every a hundred million dollars I could get to fund cancer, I can maybe get 1 million to fund women’s health. And as we were lamenting that state, he came in with, you have to meet Avestria VC.

Lynn Naylor
Yeah. He’s teaching us these incredible statistics of things he’s learned along the way with you and other folks. But the US has the worst rate of maternal deaths in the developed world. Yolanda and I were looking at each other like, “How can that be? And yes, we have to meet Linda and Tracy and talk about this because we need women’s health policy desperately.” And you’re helping right here from the Tri-Valley. So we were all excited and we can’t wait for this morning. So thank you for all that.

Yolanda Fintschenko
So thanks to Neil and Russ. We’re here with you guys. So welcoming Linda and Tracy to the pod. Thank you so much for coming and so quickly after our first introduction.

Linda Greub
No, thanks for having us.

Tracy Dooley
We’re so thrilled to be here.

Yolanda Fintschenko
So let’s just jump right in. You guys are funding women’s health technology and solutions, and you’re very unique in that. Tell us about Avestria VC, why you do what you do and how you guys came to form your firm.

Linda Greub
I was doing some investing with friends from my personal account. The first thing that really had struck us for years was about 2% of venture capital dollars goes to female founders. And that hasn’t changed in over 20 years. So that in and of itself has to be an opportunity that’s being missed. We think it partially gets missed because 87% of all venture capitalists are men. But then one of the things we found when we started investing is we started learning that there was a huge misperception of women’s health in the investment community. We had a founder who went on to sell her business to Boston Scientific for up to $250 million. But when she was out fundraising, the VCs, most of whom were men, kept pushing back on her and saying, “Well, we don’t invest in women’s health because women’s health is a niche business.” And she heard it over and over again. That’s a huge misperception.

I think that a lot of it is definitional, but again, we saw that as an amazing opportunity. And just even with that one investment, we saw how so many venture capitalists turned down the opportunity to invest in her. And she sold the company within a year and it was a huge return. So that was a great proof point for us that we weren’t crazy. And these were opportunities that were being missed for bad reasons. They were being missed out of ignorance, not because they were bad opportunities. So that’s when we said we have to do this just because it’s an amazing business opportunity. And of course we feel passionate about the need to do it. So we actually fund companies that fall into one of two buckets. Either it can be a female entrepreneur doing anything in healthcare or life science, or it can be a company working to improve women’s health. I’m going to ask Tracy to explain our definition of women’s health because that’s part of where I think the misunderstanding about women’s health being a niche business is.

Yolanda Fintschenko
Great.

Tracy Dooley
So when we think about women’s health, we’ve really been trying to expand the definition and there’s a lot of education, I think, that goes on, right? Because previously, lay people think about women’s health, they think reproductive health and contraception, right? And previously, even myself. Previously to having started invested in this space, you kind of think about women’s health as a category being very limited, right?

Yolanda Fintschenko
Mm-hmm.

Tracy Dooley
The way we’ve redefined that is much more around a personalized medicine and more of a scientific fundamental definition, right? So we define women’s health as any area that impacts women exclusively, predominantly or differently than men, right? And so, as you can imagine, that is a very broad definition, and really, I mean, as it should be, right? When we think about areas where women are impacted exclusively, that does include things like reproductive health, right? So labor and delivery, ovarian cancer, things like that, endometriosis, menopause, right? But then when you think about how women are impacted disproportionately, those can include things like neurodegenerative disease or autoimmune disease. And autoimmune disease, over 80% of the patients are woman, right? And that’s something that impacts a lot of folks, right? When you think about diseases that in which women or men are impacted differently, in cardiovascular disease, that’s the number one killer of women. That is a huge area of research.

But women are also disproportionately misdiagnosed with heart attacks when they go into the emergency department. So up to 50% of them are sent home because they’re having a “panic attack.” And so that’s obviously a metric that we are not enthusiastic about and would love to change, but these opportunities are really everywhere within healthcare. And so the way we really think about it is, you need to stratify data at a fundamental level from the very beginning, whether that is looking at male and female cell lines, male and female mouse models, thinking about looking at your clinical trials and setting them up so that you understand what the impact is on patients, right? And when you do that, then you get better insights and you drive better outcomes. So it’s really a very data-driven personalized medicine approach, but we feel like women’s health is a shorthand for all these opportunities in all areas of healthcare.

Linda Greub
One thing Tracy taught me is when she was in medical school… Tracy, at Stanford, how they define an average patient?

Tracy Dooley
It’s 150 pound man.

Linda Greub
Wow.

Yolanda Fintschenko
Wow.

Tracy Dooley
So that’s how you think about pharmacological dosing, right? That’s how you think about treatment plans. And if you think about it, how many patients do actually not fit into that category, right? So all of us are getting somewhat good enough healthcare, but obviously you can imagine we would be getting better healthcare if it was really tailored to us as individuals.

Yolanda Fintschenko
Right.

Tracy Dooley
And that’s what we’re driving towards.

Yolanda Fintschenko
So I’m just curious, who’s the they in the “they define”? Is that like an AMA definition, a FDA definition?

Tracy Dooley
It’s a standardized patient definition. Yeah, so it’s kind of been recognized as… It’s interesting. Samantha Bee actually did an entire segment on this, but it’s a historical definition that has been sort of used for dosing calculations and things like that.

Yolanda Fintschenko
Wow.

Tracy Dooley
But it’s been there for a long time and hasn’t really been challenged.

Linda Greub
And so both science and medicine have really assumed that women are small men. And so if you understand men’s health, you understand women’s health, but you add babies, right?

Yolanda Fintschenko
Right. Small men with uterus.

Linda Greub
Right. And so that’s why it’s a niche business, right? And that’s why I think there’s a definitional issue that as a society we have to really get our heads around, the fact that women are not just small men.

Yolanda Fintschenko
Wow. Okay. I’m just letting that land for [inaudible 00:08:32].

Lynn Naylor
Amazing. Amazing.

Yolanda Fintschenko
So you both have really different backgrounds, right? Tracy, you’re an MD. And Linda, you are MBA, right? Yeah, how did the two of you come to meet?

Linda Greub
So I started out investing in publicly traded companies. And for no good reason, wound up doing everything healthcare. So I didn’t come from a science or medical background. I wound up working at some life science tools companies. And then I wound up working at Novartis Diagnostics. I was always a finance person, but also a business person. Basically, my job has always been to invest whether it’s buying companies for companies or buying companies that were publicly traded stocks. And Tracy and I met at Novartis.

Tracy Dooley
And that was a dozen years ago in 2010. And so we were working together there to build innovation pipeline, everything from really early stage research with academic labs, institutions, but also incubating partnerships with early stage startups and then also corporate level M&A. So we had the opportunity to work there together which I think is incredibly important on evaluating these opportunities and knowing how each other works. And so team is a big focus of how we think about evaluating our investment opportunities. And I think we also feel that it’s really important to have the right team to look at that. And so Linda and I have both worked together and had this close personal relationship for the last 12 years, which I think really helps to have more transparency, more robustness, just a really much better quality discussion because we have a lot of that trust already built.

And prior to that, I came from a fundamental science and medicine background. So I think our roles are very complimentary. I was a biomedical engineer and undergrad. I came back up to the Bay Area. I was at Stanford for medical school. And at that point it was really when a lot of the innovation was taking off and Stanford Biodesign was starting up. And so I really got interested in thinking about how do you really take that amazing innovation and actually bring it to the bedside because there was enormous chasm, right? And while we’re paper charting and faxing and trying to do all these things and keep data in our heads, there is amazing stuff going on. But it’s regulated and it’s hard to do for a reason, right? And so helping companies make sure that they can get through those hurdles and get actual innovation to the bedside, I think is really important.

And so because Linda and I have been able to do this for so long, I think that that has really helped us meld both of those sides. So we really start off with having to understand a really true unmet need and being able to start with that. We are fundamental investors at heart, right? You need to have not only good technology, but a great product and a great business, right? And if all those things can be true and you can build that, then I think that that is really what we look for. But there’s so many opportunities out there that we’re very excited to see really, companies that continue to be built.

Linda Greub
That’s one of the things in tech I found that sometimes you’ll find a great technology that’s looking for an application. Whereas in healthcare, there’s so many really obvious unmet needs that people who are in the field can tell you. That you don’t have to create the business, right? The market is there and is just waiting for the solution. So to me, that’s a much more fun way to invest than the other way around.

Yolanda Fintschenko
Right. Right. You understand already what problem you’re going to be solving and you know that that market for a solution is there. Yeah, that makes a lot of sense. I’ve been kind of hogging the mic with the questions.

Lynn Naylor
Oh, no. I’m curious, I read recently that 70% of femtech companies have at least one female founder. And that female founders on teams tend to solve solutions for both men and women. Whereas men founders are more apt to solve for male-based issues. And I think that’s fascinating that women just have a more holistic larger view of how to solve problems.

Linda Greub
I think right there you sort of touch on why maybe there hasn’t been innovation for women’s health for so long, right? Until women are at the table and in decision making positions, their voices are often not heard. And we’ve had an additional issue with healthcare in terms of there’s been sort of a stigma about certain aspects of women’s health for so long that I think even women have been reluctant to bring them up and certainly reluctant to bring them up if you’re in a business setting and you’re the only woman at the table, right? You’re not necessarily going to discuss the fact that you’re having a hot flash, right?

Yolanda Fintschenko
Right.

Linda Greub
And all of those are potential areas for innovation, right?

Lynn Naylor
Yeah.

Linda Greub
And so I do think that having… And we see so many women entrepreneurs and a lot of it is just because I think entrepreneurs follow their passions. I think so many of us, our passions really get back to our own personal experiences, right? What is the life we’ve led that lead us to be passionate about anything? And so that’s what I think why we’re seeing so many women entrepreneurs on the women’s health space and they really see the problem and they see the solution. And you have to be passionate enough to stick with a business that has ups and downs as all startups do, right?

Yolanda Fintschenko
Right.

Linda Greub
Because if you don’t have that passion, you’ll just give up at some point.

Yolanda Fintschenko
Mm-hmm. So it’s really interesting you bring up having that passion, because when we talked to Neil and Russ, the thing that came across really clearly was Neil’s absolute frustration with such an inefficient way of monitoring fetal pulse and oxygen, and having to be confronted with performing unnecessary C-sections. And so I’m really curious. How did you recognize… Because this is an unusual situation, oftentimes you have a founder, so he’s an MD, so he really understood the problem, but did not have the capability to invent the solution. So I’m just really curious. How did you recognize that this founder, this team was going to be the right match for your fund and also that you see that, “Hey, they can actually build a business and build a solution.”?

Linda Greub
So when I first heard the pitch, it was at a reproductive health conference. One of my friends, she has been an OB-GYN for forever. She was actually in the room. I was trying to understand what Neil was saying about like, “Well, all we can do is measure the fetus’s heart rate and that’s not a good marker, right? And what we really care about is the oxygen level.” And I turned to my friend who was an OB-GYN, and I said, “Is that true?” And she said, “Absolutely.” She said, “We use the heart rate because we have nothing else. But we don’t care about it. It’s not a good marker.” And so right there she said there was a desperate need for technology that could provide the information that the doctors knew they wanted, right? So that sold me right off the bat. Just the fact… And plus, there were a lot of babies born every year in hospitals, right?

Yolanda Fintschenko
Right.

Linda Greub
So the potential for this to be a huge market and the potential for this to change the experience of almost every mother and her child, I mean, that’s the type of thing that gets me really excited when I think about market opportunity, right? And then the other things is that Neil will often mention that if you go into a hospital these days, everyone has a pulse oximeter on them except for the fetus. So the idea that this is something that could be accepted by the medical community as an important marker, that was going to happen really quickly if they could get it together.

Lynn Naylor
Really quickly. Yeah.

Linda Greub
And then what’s unique about the team that Neil’s been able to bring together is that Nellcor is a company that was bought by a company called Tyco long ago. Nellcor actually brought out a fetal that what’s placed intravaginally on the fetus’s scalp. So clearly, it was something that was a problem. Someone had looked for a solution, they found a solution, and the FDA approved it. The trouble was, is because Tyco bought Nellcor, in the shuffle the business got shut down. So there were people who had already solved the problem in a particular way. And yet for no good reason, this technology wasn’t out in the market.

Neil was able to tap into a lot of the old Nellcor people. I mean, his team is really unique in that sense. He clearly saw the need and he was able to bring together these people who had already solved the problem. One of his board members had been at Nellcor. Russ was at Nellcor. He’s brought it in some other people who had been at Nellcor. So if anyone was going to be able to solve this problem, it was this team.

Yolanda Fintschenko
Excellent. Yeah, so they really answered the question like, why us, why now, with the incredible apt problem and the right team, is what it sounds like.

Tracy Dooley
I would add here too that they were able to address all these different factors because Neil clearly had a really clear point of view as a stakeholder, right? But healthcare is so complex. It’s not just we’re selling to one person who’s going to make a decision and then that’s going to make the choice for millions of people, right? It’s about how do the clinicians think about that? How do the patients think about it? How do the payers think about it, right? What about health systems when they’re making decision as to what their clinicians are able to use, right? All these different things. How do you think about regulatory as well? Obviously, that’s a huge area.

And so being able to build a team that can address all of these things. I don’t know that you could ever really get one person that could do it on their own, right? So the solo founder model that a lot of people talk about in other areas is not something that is necessarily a market of success in healthcare. And I would actually also add that folks who are trying to do something in healthcare would be far better served to build out a very robust team, have great advisors around them because it’s truly a team effort and not this one hero coming up with some new innovation that’s going to completely disrupt things, right? It’s about working and navigating within the existing system and being able to create those innovations and understand how to move those through.

Linda Greub
And experience really matters in healthcare. You can’t really be a 20 year old school dropout wearing a hoodie, right? People have PhDs and MDs. W saw, I think with Theranos, somebody who tried to disrupt the healthcare system. There are a lot of things that could be improved in the healthcare system, but I don’t think disruption is the right way to think about it. I think Tracy brings up a great point. It’s like there’s a large existing system. How do you work within it? And how do you bring experience to bear on making what exists today better?

Lynn Naylor
Wow, fascinating. So the experience of a team is obviously what you look for first and foremost. What else do you watch for? Perseverance? Grit? The ability to bootstrap well? What else do you watch for when you invest?

Linda Greub
I think we like to talk to people who we like to talk to, right?

Lynn Naylor
Uh-huh.

Yolanda Fintschenko
That’s right.

Linda Greub
You know?

Yolanda Fintschenko
That’s the answer.

Linda Greub
I think we’re both incredibly candid people. People give us sort of… I think we’re both the type of people who probably drove everyone crazy in elementary school because we were always asking the questions and refusing to move on because the answer was not the answer we really understood. And so that’s the way we are now. You can’t sell us anything, right?

Yolanda Fintschenko
Right.

Linda Greub
You have to just put up with us asking questions and getting to the point where we understand what you’re trying to do and why you’re trying to do it. You have to bring us along. I can’t tell you how many times Russ and Neil had to put up with trying to explain pulse oximetry to me, because Tracy could get it but I didn’t get it so quickly. Because I can’t invest in something, I don’t understand, right?

Yolanda Fintschenko
Right.

Linda Greub
So we like people who have the patience to put up with that, but also that they’re people who they really love what they’re doing. And so they’re excited to talk about it over and over. And they bring us along as part of their team.

One of the things that Raydiant’s been amazing at, to be honest, was they are so open. And I think a lot of that has to do with maturity again of their team. Every time there’s a glitch, and every business has glitches, but healthcare really does.

Yolanda Fintschenko
Right.

Linda Greub
So many things are changing all the time. They are so open with their board and their investors. And they really use that team as an opportunity for them. Neil, as a CEO is great at saying, “Look, here’s the problem. Here’s what we think the solution is, but we’re really open to other ideas” and is a great listener. You wouldn’t think that somebody who was a doctor would be a great CEO. And that’s one of the things we asked from the very beginning is, “Would you be willing to bring in a commercial CEO at some point?” And Neil said, “Yes, of course, because I want what’s best for the company.” But he has learned so much, he’s a fantastic CEO now.

Yolanda Fintschenko
Mm-hmm. That’s amazing.

Lynn Naylor
Great.

Linda Greub
Yeah. He’s a real listener as opposed to we… All, I think, have this idea of the great CEO is somebody who’s 6’2 and is a blonde male and has a very deep voice and is a rapid decision maker. That’s not necessarily who makes a great business leader at all.

Yolanda Fintschenko
What do you look for? Who do you think makes a great CEO? Or what do you think makes a great CEO?

Tracy Dooley
I think it’s a lot of things, right? But I will maybe distill this and I’m a little bit biased, but I think that one quality that differentiates a CEO from others can be their ability to get to the right question and then to be able to go from there, right? Because I think we see a lot of folks who want to say, “This is the solution, and I’m going to come up with a solution out of my head,” right? And that automatically eliminates a lot of the input you can have from other folks who are experts or who have relevant expertise. And so we want folks who are really going to say, “Okay, here’s the critical question. Now let’s distill it down and we’re going to evaluate it,” right? And yes, they do need to make decisions. But I think that asking that critical question, being able to really get to that is very important.

And I think that’s something that we actually really try and do. And we pride ourselves on at Avestria too. Because based on our operating expertise, we have clearly not been in venture our entire careers, right? But having been in healthcare for decades, I think it’s really important we’ve seen in large companies and in smaller companies how one question can really move a company down a certain path, right? But you’ve got to ask that question first. And if those insights are never uncovered or they’re left uncovered, you could really be facing very challenging hurdles later on as well. So I think that we really appreciate the inquisitiveness and the curiosity in a CEO, as well as the other qualities of being able to analyze and being able to make decisions and being able to build a good team, which of course are all valuable.

Linda Greub
For me, some of the best leaders I’ve interacted with are people who put together their dream team. They hire the people who are expert at all the things they are not expert in. And then they view their job as how do I enable this dream team? How do I get the resources that this dream team needs? How do I raise the money for them? How do I overcome the hurdles so they can perform to their very best ability?

Yolanda Fintschenko
That’s a huge insight. It’s not, I think, an unusual one to say lgreat leaders are actually people who want to bring out the best and the people around them. And I think that’s a very specific way. It sounds like a CEO can leverage the talent they’ve attracted. They’ve put so much effort in attracting the talent as to support them. And again, this sounds like another hallmark of maybe experience. Having the humility. There’s a time in your life where you’re so engaged improving yourself. And then there’s a time in your life where you’ve been humbled enough. You’re no longer out there.

There are so many questions that come to mind, but everything you said is just so rich. I think one of the things that I want to come back to is this idea of the board, using the board as a resource. It just reminds me of some really good advice that I’ve heard, which is, if you’re investors and your board are only giving you money, that money came at too high a price. And so I wonder if you can talk about, I don’t know how much your role is in forming the board, but just giving some advice to these founders in healthcare. What should they be looking for in the board? What should they be expecting from their VC in terms of building the board and what other expertise their investors and boards should be giving to them?

Linda Greub
I think it’s just building your management team, right? You look for what are the key holes, right? If you are a medical device company, you may want to bring somebody onto the board who has been through the regulatory process with medical devices a million times. If you’re not really sure how to raise money, maybe you look to one of your investors to really help you with that. So it’s a matter of identifying where you’re going to need the most help. And again, it should be people who you have a good relationship with, that you can talk to candidly, right? And because again, there will be problems. And you don’t need somebody who is going to spend the entire conversation saying, “Why did this happen?” You want somebody who’s going to help you work your way out of the problem and to solve and look forward, right? And I think that’s probably the most important thing.

Again, even though we’re investors, the way that we can have the most impact on our founders is to just interact with them as much as we can in terms of trying to reach out and say, “Is there anything you’re working on that we can maybe help you with? Maybe we can’t help you, but maybe we know someone who can,” right? As opposed to the idea of a board being somebody who tells you what to do, I don’t really think that that worked very well. I’m more interested in, if a CEO has been building their board, I’m more interested in who the independent board members are than the investor board members.

Yolanda Fintschenko
I see.

Linda Greub
Because the truth is, I mean, I’m an investor. I know how little I can bring to the table relative to the other people on the board who actually have the industry experience.

Yolanda Fintschenko
Right. Do you have anything to add Tracy?

Tracy Dooley
Yeah. I think the solution orientation mindset is so important, right? And I would also say for entrepreneurs, when they’re thinking about… There’s always a little bit of tension between valuation and how much are you going to be able to raise and what is smart capital versus what is not. But really thinking about who are those people who are going to be behind you when the chips are down and people who are willing to roll up their sleeves, right? Because I think we have all seen that there can be areas where maybe you do have a sort of celebrity board member for some things, but it can be challenging to rely on them for anything else beyond having their name on a page somewhere. So I would just think about particularly at an early stage, which is where we invest, the ability of your board and advisors to actually engage in a meaningful way that is meaningful to you and is very important.

And then as you get bigger and bigger and your team is able to take over a number of these functions, then the board becomes much more advisory and much more source of capital. But I think particularly at the early stages, it’s really critical to think about setting your company up that way.

Yolanda Fintschenko
I think we can close this out. Thank you so much for coming. You’ve been listening to Linda Greub and Tracy Dooley from Avestria VC and we’ve been talking about women’s health.

Lynn Naylor
Yeah. What a great day. Thank you for being with us.

Tracy Dooley
Thank you so much, Yolanda.

Linda Greub
Thank you.