CEO of Jumpstart Foundry Vic Gatto (far right) met with digital health entrepreneurs in Denver on February 11th.
DENVER – “Healthcare startups are hard,” said Vic Gatto, the founder and CEO of Jumpstart Foundry, a Nashville based innovation fund. “And if you decide to do healthcare startups in Middle America, where there isn’t any capital, that’s not just hard – that’s crazy.”
Gatto was speaking to a gathering of digital health entrepreneurs at Galvanize’s Platte River co-working space in downtown Denver. The former venture capitalist had come to the Mile-High City as part of Jumpstart Foundry’s City Tour.
“There are really passionate people doing great work here, but there’s no money,” Vic continued. “That’s a really good combination for me as a seed investor.”
Jumpstart Foundry’s City Tour had started in North Carolina’s Research Triangle, and would continue on to Chicago and Minneapolis, before ending in New Orleans in March. The tour was billed as an opportunity to discuss “the challenges that innovators face, and ways that startups can overcome.”
After stating that his organization planned to invest in twenty healthcare startups in 2016, Gatto explained how Jumpstart Foundry’s innovation fund operated.
“It’s a twelve-month process. We invest $150,000 and take 7.5% ownership. That’s a 2 million dollar valuation. Then we spend a year sitting side by side with you, helping you validate the business model, build the product, go to market, scale, get customers, and raise capital. A year later, you have your A round, and you’re off and running.”
According to Gatto, companies selected by Jumpstart Foundry would only have to visit Nashville for a few weeks of training and to make sales calls. Several members of the audience found the model attractive.
“It’d be great to have a source of funding close by, so that people like me wouldn’t have to sell themselves to the markets in San Francisco, New York, or Boston,” admitted Kevin Krauth, the CEO of Orderly Health.
“I think it’s a perfect follow-on for what many accelerators are doing because it helps fill the gap between traditional seed-stage funding and getting to a Series A,” explained Tom Base, the managing director of the Boulder-based Boomtown Health-Tech Accelerator.
Read the full story on CyberMed News.