Ever hear the notion that physicians are dumb investors? It’s often rattled off as truth and yet it is totally false.
Physicians, like everyone else, tend to do better with their investments when they invest in what they know. What do they know? They know medicine, and the “practice of medicine.” They have a better ability to assess the relative opportunity for many companies than the supposed “smart” money-like venture capitalists who typically retain physicians to evaluate the companies they seek to fund.
Moreover, when physicians invest in medical startups they may even have the opportunity to help the company with key advice on things like reimbursements, clinical barriers to adoption, and how to facilitate strategic introductions. In other words, they can help influence the outcomes leading to successful exits. If they invest in Coke or Exxon stock it is unlikely they will ever drink enough soda or use enough fuel to move the needle for those companies.
The key challenges physician face when investing are largely ones of time and the vulnerability of being a small investor. angelMD was designed to solve these problems, and aims to reduce risk in the process leading to healthy returns on investment.
The firm has a crowd-funding portal that allows medical startups from all over the world to create a profile which instantly gives them visibility to a large network of physicians. These connections can lead to landing advisors, KOLs, early adopters, clinical trial sites and investors. The angelMD curation and due diligence process result in one or two companies being selected each month for funding. The company packages the information investors need to review in a consistent manner so they don’t have to do all the research; and each month they can review potential investment opportunities presented to the network. Investors are bundled into a group so they have a stronger position for pricing and terms and are less likely to get washed out by future larger investors. Finally, angelMD professionally manages the portfolio on behalf of its limited partners (physicians) ensuring they get updates and are brought in to help if and when needed.
The result is a total reinvention of funding medical innovation, one that gives physicians an unparalleled investment platform while making the capital raising process for promising startups much more efficient.
This article was written by Charles H. Weaver, MD (SVP Clinical and Business Development). He is a former cancer researcher, developer of the Physician Practice Management industry and pioneer of Internet-based cancer education. Dr. Weaver received his medical training at the University of Pennsylvania, National Institutes of Health and Fred Hutchinson Cancer Research Center. He served five years as the Chief Medical Officer of a PPM company, where he created the clinical trials network, developed cancer treatment strategies and pathways, oversaw managed care contracting and the educational programs used by over 750 oncologists in the U.S.