The Forbes 30 Under 30 Guide To Starting A Healthcare Company

Healthcare has long had an allergy to youth. Whereas the tech sector has embraced young founders, in biotechnology and health tech, gray hair is not merely an asset but a prerequisite. But as Forbes has tracked young healthcare entrepreneurs on our 30 Under 30 lists, we have seen that change.

Last week, at the Discover stage on the Forbes Under 30 Summit in Boston, attendees got a crash course on what it takes to break the age barrier and start a company from the entrepreneurs who have done it themselves. Some of the advice was specific to young entrepreneurs, and some were specific to healthcare. Other points apply to anyone starting a business. Here, then, is a guide to starting a healthcare company from some of America’s most successful young entrepreneurs.

Tip 1: Be Tenacious

Some founders get lucky. But raising money is usually a grueling experience. Surbhi Sarna, the founder of nVision Medical, which was purchased in April by Boston Scientific for $150 million cash and another $125 million in future milestone payments, said she literally ran out of potential investors to ask. Her last hope: Darshana Zaveri at Catalyst Health Ventures. Zaveri was impressed, but couldn’t get the deal through her partnership. “It’s done,” she told Sarna. “I’m sorry. It’s just not going to happen.”

For six hours Sarna was too dejected to get out of bed. Then she called Zaveri back. She said she would move in with her parents and not take any salary for two years. Zaveri went back to her partners and became a key investor in nVision’s first funding round of $250,000.

Tip 2: Be Prepared

Again and again, we’ve heard investors talk about how they knew within minutes they were going to fund a new company. (We heard it twice at the Under 30 Summit – keep reading.) You can’t engineer chemistry, but you can try to make sure the elements for a reaction are there.

Here’s Sarna’s advice: “This is very anti-Silicon Valley, but I will actually recommend writing a full business plan because there is nothing like plopping a 30- or 40-page document on a desk and saying, ‘Any questions you have about why this will be a success is contained in this document.’” Make the VCs play “stump the founder” – and be sure the founder (that’s you) wins.

Tip 3: Be Flexible

Forbes Under 30 alum Nat Turner told the story of how he started Flatiron Health with partner-in-entrepreneurship Zach Weinberg simply because they wanted to do something about cancer. They had sold their last company, ad-tech startup Invite Media, to Google for $80 million. (First impression #1: First Round Capital’s Josh Kopelman told us he met Turner as a freshman at Wharton and was impressed by his capacity for independent thought – he’d later back both Invite and Flatiron.)

Initially, they thought they were starting a nonprofit, inspired when Turner’s cousin developed leukemia. But then they realized that would make it difficult to hire the right people.“Great engineers don’t work at nonprofits,” Turner said. “They tend to go to places like Facebook.” They came to believe that if they could gather together healthcare data in a useful way, they could have an impact. Eventually, they would purchase an electronic medical record firm. When they started, Turner says, they didn’t even know what an electronic medical record was. The end result: a company that uses data from those health records to try to get evidence about what drugs work best in which patients, which is very valuable to pharmaceutical companies. Roche purchased Flatiron at a valuation of $2.1 billion (including a $200 million stake Roche already owned) in February, but the company is still operating independently. Flatiron is still open for business with other pharma firms, too. Its biggest client, Turner says, is Roche’s rival, Bristol-Myers Squibb.

Tip 4: Be CEO? Maybe not.

In startup fantasies, founders usually imagine themselves as the boss. It’s not always the right approach. Jessie Becker founded Alydia Health to develop a medical device to treat postpartum bleeding. She later hired a veteran medical device executive, Anne Morrissey, to serve as chief executive. “Our mission has always been to bring this technology to the entire world,” Becker told us. “We needed to build a company that outlasted any of our founders. … We always thought this was going to be bigger than us and it got to a point a couple years ago when I thought, ‘I need some help.’”

Armon Sharei, CEO and cofounder of SQZ Biotech, said he had never planned to become a CEO or an entrepreneur. When he was working on his Ph.D. At MIT and developed a new technology called “CellSqueeze” that squeezes cells to get drugs into them, he planned to stay in academia. Later, he thought he would work at SQZ (pronounced “squeeze”) as chief scientist. But his investors saw CEO material. SQZ raised $72 million in August. “My logic was always, as long as I am the best person for that spot, I’ll keep doing it,” Sharei said.

Tip 5: Be A Team

Doug Cole of VC firm Flagship Pioneering knew within five minutes of meeting Dana-Farber assistant professor Cigall Kadoch that he wanted to start a company with her (that’s first impression #2). It was both the science she was doing – understanding the biological mechanisms by which genetic mutations changed the way DNA was stored in the cell that led to some cancers – and a sense that their goals were aligned. Plus mutual trust. “Companies are nothing more than groups of people trying to do something,” Cole said. They always run into problems. “The question is, are you going to be able to navigate that with the people you’ve chosen to join forces with?” He says. The result: Foghorn Therapeutics, which raised $50 million in March.

Kadoch chose the traditional path for academics starting a biotech: She remains involved, but others are running the company day-to-day. She says watching her lab’s work take the first step toward being medicine for cancer and other diseases has been amazing: “This has been one of the most unbelievable, most exciting years of my life.”

Matthew Herper contributed reporting to this story.
This article was written by Michela Tindera from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.