Sarah Fox is a Senior Associate at Windham Venture Partners, a venture fund investing in healthcare technology companies. Ms. Fox regularly sources deals, assesses opportunities, and supports portfolio companies. Her time at Windham follows time studying at Cornell Johnson and working at a digital health startup, Particle Health.
I am curious about your path to venture capital. I noticed you explored the space with Healthy Ventures while at Cornell Johnson and worked with both Big Red Ventures and Red Bear Angels. What about the space interested you, and how did these experiences lead to where you are now professionally?
I’ve always wanted to be in the healthcare sector from a young age. At first, I considered becoming a doctor, but I later decided that was not the right path for me. Healthcare administration then seemed like the natural way forward, working for either private practice or health systems. I was going down that route early on in undergrad at Cornell, until I had an internship one summer at StartUp Health. StartUp Health is a New York City-based incubator/accelerator for digital health startups, which opened my eyes to the digital health landscape and the entrepreneurship ecosystem with venture investors and startups. From there, I pivoted and decided that I wanted to work in digital health — I wanted to be at the center technological innovation in healthcare.
From there, I decided to pursue my MBA at Cornell. In the summer before my first year of business school, I worked with Healthy Ventures, an early-stage healthcare VC based in San Francisco. I served as a research analyst, conducting market research and assessing potential deals. I continued working with them during my first year in business school and engaging with other young investors in the ecosystem. These conversations and experiences further cemented that healthcare venture was the right path for me.
I continued to further pursue any opportunity that exposed me to the venture space, which led me to becoming an associate at Big Red Ventures, getting involved with Red Bear Angels, and taking advantage of entrepreneurship and venture classes at Johnson. Throughout business school, I decided that I wanted to work for a healthcare startup after graduation to learn how a startup operates, work at the ground level, and obtain a deep understanding of what investors get exposure to.
After graduating Johnson, I worked for Particle Health, a digital health startup focused on healthcare data interoperability. I was at Particle for over a year and a half, working in strategy and operations. I worked on some special projects and helped to scale the business and processes across departments, including product, marketing, sales, finance, etc. It was an invaluable experience, because now on the investor side, I can understand where founders are coming from and speak to many of the typical startup challenges and obstacles.
From there, I got introduced to Windham Venture Partners and took the opportunity to join the firm as an Associate, sourcing deals, conducting diligence on deals, and supporting portfolio companies.
Could you please discuss what your day-to-day looks like at Windham, particularly with the fund’s focus in the healthcare space and the unique needs that that entails?
No two days are alike, partly because we are a small firm so we all have a say in many parts of the fund. My day is a lot of sourcing and diligence, but also fund administration (i.e., how do we create a portfolio construction, cash reserves, cash flow management). I regularly reach out to companies that I know from my personal network, who I learn from other investors, or ones that I learn about through multiple healthcare and VC communities I am a part of. A lot of my week is speaking with founders to dig into their market, product, traction, etc. From there, Windham decides whether we want to dig in further and whether it fits within our thesis and areas of investment. Are they the right stage and the right fit for Windham at this time? Generally, we follow up with more questions or request access to a data room to look at their financials and other key metrics. Portfolio support is the other major component of my day-to-day and being that backbone and sounding board for founders.
When you are sourcing and assessing these companies, what sorts of things are you looking for in a potential investment?
Team is first and foremost, because it often comes down to who you are investing in. We look for a “founder market fit” — is this founder the right fit for the company, in its market, at this stage? Do they have the necessary expertise and are they surrounding themselves with the right people? Is their vision of the market pretty clear and accurate?
From the market standpoint, is it a big enough market? A lot of people put a lot of emphasis on TAM, which isn’t misplaced, but when looking at a healthcare product or service, you have to think about TAM and workflows in conjunction. There are so many stakeholders in healthcare, so you have to think about will this actually be used, will providers adopt this, will patients use it, will health plans adopt it? It’s not just about selling but it is also crucial to get utilization and engagement.
Lastly, what is the potential of the company? Is this company ten-times better than today’s standard, or is only a minimal, incremental improvement? Will this really drive change? These high-level questions is what Windham likes to dig into when first meeting a company.
Are there particular deals that you’ve worked on that you are particularly proud of?
One of our newest investments is Vergent Bioscience, who we invested in back in August, is a company that I am very excited about. They developed a novel molecule for tumor visualization and is currently enrolling their Phase II clinical study for lung cancer. Vergent lights up tumors by covalently binding to cysteine cathepsins which are overexpressed in most cancers and are prevalent in tumor cells. Surgeons can then visualize the tumor when they turn on near-infrared imaging capabilities on their minimally-invasive surgical robot, allowing for clear margins. Clear, or negative, margins is important as to not leave cancerous tissue behind, which is a problem in in minimally invasive surgery because surgeons cannot palpate tumors, which is the usual method for ensuring the whole tumor is in fact removed.
Are their trends in the space that you are excited about?
There’s a bunch! One of them at a high level is convergence in healthcare. A medical device is no longer just a device in healthcare, it now has AI components and software to help predict outcomes. An example in our portfolio is Delfi Diagnostics, which is developing a liquid biopsy for early cancer detection. They use machine learning algorithms to detect DNA-fragments in the blood, demonstrating the prolific adoption of advanced data science across healthcare, not just in purely software solutions.
Even within digital health, we are seeing a lot of convergence from point solutions to platform solutions. Customers, including health systems and employers, do not want to buy discrete solutions for one part of the body anymore – they want to buy a comprehensive solution that can address multiple specialties and conditions. Relatedly, many specialties inherently work together, shown through integrative care models; for example, gastroenterology and mental health have seen much overlap, demonstrating that you cannot treat one part of the body/system in silos. Convergence of care across bodily systems and organs must occur.
There are many other trends we are witnessing as well. One of them is food as medicine. Many chronic diseases are preventable due to lifestyle changes, and a lot of that has to do with the type of foods we eat. Cardiovascular disease and type 2 diabetes are two, prevalent chronic diseases that can be preventable in part by eating the right food.
As a final question, do you have any advice to Cornell students seeking to explore the venture capital industry?
A lot of venture has to do with connections, relationships, networking, and then being thoughtful about who your relationships are within the industry. Developing a strong network is very important. It is okay to cold outreach to investors and have conversations about the industry. But I would caveat and say don’t think of it as a means to an end and to check off that you spoke to X person. Quality matters more than quantity here. Having conversations and building relationships with the hope that something can come from it but not a guarantee is the right way to look at networking. Being really genuine in your connections, listening, asking smart questions, and wanting all parties to succeed is critical. This industry is really collaborative across all firms, so becoming skilled in fostering those relationships will be very helpful for one’s career.