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HealthIT startups to pitch in Minneapolis for shot at Dublin accelerator

January 4, 2013 | by Jeff Pesek 6 Comments

Event Health IT

HealthXLEuropean startup accelerator HealthXL will be touching down in Minneapolis on January 29th to host a nationwide “preliminary selection day” held at Worrell Design.

By offering mentors, money, and media, the Dublin-based initiative is seeking to recruit 10 HealthIT startup companies from around the world for their next class beginning in February.  Over 100 entrepreneurs have already submitted their applications for a chance to pitch the crowd, and more are yet anticipated.

Health XL’s partners include names like IBM, SVB, and GSK, amongst other corporate and private investment groups clamoring to nascent talent pursuing their piece of a trillion dollar plus industry caught in a sea of change.

“HealthXL is an accelerator program specifically designed for startups disrupting health with breakthrough technology. The program is run by experienced entrepreneurs and backed by leading global health investors, medical professionals and corporates.  We are looking for smart, revolutionary teams that are working for solutions from the following domains: direct medical solutions, personalization, patient compliance, prevention and participatory health solutions, health economics, integrated solutions and more.”

“It doesn’t have to be a business yet, as even idea stage startups will be considered…it’s a great opportunity with a big potential upside,” says John Brownlee, one of the local acting mentors for the Minneapolis selection day.  Jeff Weness of Children’s Hospital and Zipnosis’ Jon Pearce are also on board to meet and mentor the startups, some of which are expected to be local.

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Jeff Pesek / TECHdotMN Co-founder

A product of the net generation; consumed with the convergence of tech & culture. Pursuing things that aspire to improve the quality of human life.

  • http://twitter.com/UniqueVisitor Jeff Pester

    Somebody remind me again why there isn’t a dedicated Health/Medical Accelerator in Minnesota right now??

    You can’t have a vibrant startup ecosystem if the local people who have already made 100′s of millions in this space are afraid of losing a tiny fraction of their wealth nurturing/mentoring the next wave of innovation.

    Until that changes, the siphon of talent out of Minnesota will continue.

  • http://twitter.com/casey__allen Casey Allen

    By no means do I have the definitive solution to this, but I’ll take a stab.

    Until / unless med device investors switch their investment profile over to include HeathIT, there simply isn’t enough available capital to support such a program.

    You could hope a Healthtech accelerator program (like Healthbox in Chicago or BluePrint Health in NYC) would lead or spur more investment, but basing an entire program on the hope that Omphalos or a few non-healthtech-focused angels handing over term sheets simply isn’t enough.

    It’s worth noting that every HealthIT play here that has exited, like BloomHealth, Virtualradiologic, or Acuo, didn’t raise much of their cash locally. Same goes for funded companies like Precious Status, RedBrick, and HealthSense.

    Could this ever change? Am I optimistic? My hope is that we’ll see one or two more exits in this space, notably RedBrick (which will be huge) and some of the founders will turn their eye to investing, a transition (from successful founder to angel) that doesn’t happen as much as I wish it did in the Midwest.

    That will help gradually change the game for healthtech. But until then, or until an enterprise like Mayo Ventures or UHG really ratchets up their investing by at least 10x, a program with that narrow of a focus would be fundamentally doomed.

  • http://twitter.com/UniqueVisitor Jeff Pester

    Casey,

    A couple thoughts:

    A) If you’re counting on medical device investors to switch their investment profile, that isn’t likely to happen. Medical device investors by and large don’t fully understand and aren’t comfortable with the enterprise software market. It’s not their thing.

    B) There’s plenty of local money and expertise to fund a HealthIT or similar program. But true accelerators are formed/funded by people who have sufficient money and deep subject-matter expertise and are willing to make a multi-year, multi-million dollar commitment. The truth is, there’s evidently no one in the area willing and/or able to make that level of commitment yet. Could be that sector is still too young. I don’t think so, but evidently the local $$ thinks it is. They are wrong. By the time they figure it out, most of the big money will have already been taken off the table by the firms that invested in some of the companies you’ve mentioned.

    C) It doesn’t matter where local funded companies (like those you mentioned) raised their money. What matters is what the founders/executives do with their money upon exit(s). Unfortunately, the area has a lousy track record of executives recycling capital back into the local entrepreneurial ecosystem (going back to the late 90′s at least). In fact, it’s embarrassingly anemic. That’s the #1 difference between California and Minnesota, and it’s important for a variety of reasons.

    D) Due to their fiduciary and other constraints, neither Mayo Ventures or UHG are going to fuel meaningful seed-stage innovation and investment. Perhaps as LP’s in a seed-stage fund, but not as individual entities.

    E) As long as no one locally is willing to step up, then local entrepreneurs will have to continue to go elsewhere to get their money. All of the funded companies you mentioned did this and mostly found a way to stay in Minnesota.

    Money has a funny way of finding promising companies/technologies, and vice versa. It’s just unfortunate that Minnesota doesn’t have the leadership to find a way to keep more of those companies and the returns that come with them in Minnesota.

  • http://twitter.com/zjrobins Zach Robins

    Hey fellas – great points all around. Curious as to why no mention of local/state government as a means to an end? It’s easy to dismiss gov’t due to its inherent flaws and often lack of resources. Yet, could direct support of an accelerator or indirect (tax incentives) be a partial solution in a land where exited founders are apparently too MNice!?

  • http://twitter.com/casey__allen Casey Allen

    Boooo.

    =)

    Doable, for sure. But as evidenced by the current local initiative, nothing to get excited about and certainly worth getting skeptical about.

    If there was a state or city backed program, the truth is I wouldn’t go near it and would not endorse it to startups. With tax payer money comes clauses that the startups must stay the area, and I have a fundamental problem with that. It’s not natural or healthy for the companies.

    So is it a means? Sure. But I consider it so unlikely to meet people’s expectations that I’m much more excited to see it come together naturally, following the organic process of success -> exit -> recycling knowledge/$ back to the ecosystem by folks who actually know how the game is played.

  • http://tech.mn Jeff Pesek

    Surely you have a more original idea than that, Zach?

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