FCA Investment Criteria
FCA is focused on investing in companies in Healthcare IT Industry. We are open to investing in Healthcare Services investments, but are prioritizing Healthcare IT.
Our companies are led by strong management teams with sector specific expertise and a passion for building businesses. Our entrepreneurs often have previous entrepreneurial success.
Companies are often SaaS solutions that make the customer's life more efficient and save them time and money.
We look for early to growth stage businesses that are capital efficient with scalable and disruptive business models. Companies typically have between $500K and $2M of annual revenue with a proven product and customer base.
We invest $3M - $6M. We often invest $3-4M as an initial investment and then hold reserves for follow-on investments as companies need more growth capital.
We look to establish a meaningful ownership percentage in each company and serve as the lead investor for every deal. We require a board seat and assist management in building their businesses.
FCA Example Investment
ProviderTrust is a Nashville, TN based Healthcare Technology company.
ProviderTrust solves a range of compliance issues within healthcare today:
- Provide HHS and OIG exclusion list checks for all employees and vendors reporting only when a possible name match has been confirmed to your employee or vendor
- Deliver a consistent, automated process of verifying and monitoring the credentials of nurses, allied health professionals, technicians and staff
- Alert appropriate personnel, including each provider, of expiring, missing, or expired required licenses and certifications– ensuring that the properly qualified people are on the floor providing care.
FCA invested in the company in 2012 has continued to invest as they have scaled dramatically since our original investment. The company has grown revenue along with headcount while rapidly improving their technology. FCA has been helpful in areas including business development, budgeting, marketing, human resources and John Burch represents FCA on the company's board of directors.
FCA Investment thesis reports
FCA is actively interested in making investments across the following areas of healthcare as we believe they are ripe for improvement by innovative startups.
End-of-life care is an important part of the care continuum for patients and the families of patients with terminal conditions or those encroaching upon old age. Palliative care is one option for end-of-life care and is specifically focused on symptom and pain management for patients with serious illnesses; it is not necessarily limited to patients in their last days or months of life and can be administered across a variety of care settings (from home to hospital).
The Oncology space offers an attractive market opportunity for the rapidly growing number of cancer-focused startups. The transition to value-based reimbursement is fueling this market opportunity by pressuring providers to improve processes and reduce costs. Although relatively new, MIPS and the Oncology Care Model supply the incentive for providers to adopt technologies that succeed in making cancer care faster, better, and cheaper. Skeptics are pessimistic about the longevity of MIPS as Congress takes aim at the sometimes-excessive reporting requirements, but experts agree that the concept of value-based reimbursement is part of healthcare’s future. Additionally, tech solutions can help to mitigate the negative trends in oncology such as increasingly cumbersome reporting requirements, the rising rates of oncologist burnout, and the challenges of patient treatment adherence. To solve these problems, software platforms will assist with clinical standardization, precision treatment planning, and patient symptom reporting, reducing costs for providers."
The U.S. healthcare system continues to shift toward a value-based care model as payers incentivize treatment value (value-based care) over treatment volume (fee-for-service). Innovators and entrepreneurs are forming new businesses focused on delivering better care outcomes at a lower cost to support this shift from fee-for-service to value-based care. These startups work directly with payers, patients, and providers to generate solutions to improve patients’ health by rethinking delivery of care and disease prevention. Many of them aim to rein in runaway healthcare spending by focusing on the costliest diseases and conditions, and by charging payers a flat (often monthly) fee for services rendered.
While it is still very early days to fully comprehend blockchain’s role in healthcare, we believe that this technology has the potential to address some of the top concerns in data sharing and security within the U.S. healthcare system. We are actively seeking investment opportunities into companies using blockchain to solve unique problems that widely adopted technology solutions fail to address. Initial Coin Offerings have changed the role venture capital firms play in funding blockchain startups; however, because of the unique complexity and difficulty of building a healthcare startup (in relation to other industries), having a value-added capital partner ally who understands the intricacies of healthcare can create an unfair advantage over competitors without these types of investors.
The opioid epidemic offers three clear entry points for startups. A biotech enabled solution will yield the most profit and has a clear path to commercialization. A patient or addict centered solution may gain user traction but has an unclear path to profitability. The clinician centered solutions are gaining modest traction; however, the value creation model is difficult to ascertain. Clinicians would benefit from software based tools, but the patients and payers absorb the costs associated with addiction. Therefore, a startup trying to enter this space would have to develop a product that provides benefits for both providers and payers to gain significant market penetration.