Fred Toney - Launchpad Digital Health

2017 was a banner year in digital health on multiple levels, and one key metric is investment in digital health companies.  Startup Health reported $11.5 billion in investments in digital health startups in 2017, topping 2016’s record of $8 billion. Series A funding grew it’s share of overall funding for the third year in a row; it is now 36 percent of the total funding in digital health. While seed funding has grown in terms of real dollars, it’s share of the funding pie has continued to decline since 2015, but it still makes up 29 percent of the total funding.  See the full report from Startup Health below.

Seed funding plays a key role in developing the companies, leaders and innovations that are needed to transform health and wellness.  We spoke with Fred Toney to learn more about how his company is leading and succeeding in this challenging and dynamic market.  Fred is the CEO & Co-Founder of Launchpad Digital Health, which is the most active institutional lead investor in digital health at the seed stage in the U.S. He has more than 20 years of financial and executive management in the digital health, medical, life sciences and financial sectors. He’s served in executive and Board capacities for 30 public and private companies, and he’s founded, funded, managed and sold numerous companies.  Fred is currently a board member or board observer for over 20 digital health companies.

Fred and I recorded this interview over the holidays so we didn’t have the full 2017 numbers to discuss, but we covered some of the tips for companies looking for seed funding, some of the areas they focus on at Launchpad Digital Health, and the success they’ve had in identifying and supporting female-led startups. He’s also shared some information about their Ground Zero program – which you can download below.  Enjoy!


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Today's Topics

  • What companies should achieve before raising a seed round
  • How the Ground Zero program can help startup companies succeed
  • Why Launchpad Digital Health is investing in female-led startups
  • How children and young adults are being affected by technology, and how they can help preserve and restore mental health
Bayer G4A Generator

About Launchpad Digital Health

  • 2014 – 2017, 3+ year journey thus far
  • 1,000+ companies screened, fifth cohort, one every 9-12 most
  • 28 funded startups (including current group underway), led seed round, highly selective, + follow-ons
  • Most active seed investor in the U.S. in digital health deals
  • 80-90% already received outside follow on funding, avg. 3x step-up
  • Many are already strong M&A candidates (~50%)
  • 50 Advisory Board members


Lightning Round Answers

1- What is a saying, quote or phrase that motivates you?
“Things may come to those who wait, but only the things left by those that hustle.” ~ Abraham Lincoln

2- What advice do you have for others working to innovate in healthcare?
“Bring ideas to the traditional healthcare system, that really were not grown up in the system, things from outside.” ~ Fred Toney

3- What book do you recommend to our listeners?

Fred gave 3!

Against the Gods – The Remarkable Story of Risk” by Peter Bernstein – History of how we’ve de-risked so many things in society.

Moon Shot: The Inside Story of America's Apollo Moon Landings” by Jay Barbree and Alan Shepard- story of how we got people on the moon and the implications.

Team of Rivals” – Doris Kearns Goodwin – anyone who is trying to manage a team of people, this is a great book for any startup CEO to understand history and see how he was able to make great decisions.

4- What’s a technology that you recommend to the listeners?

Amazon's Alexa!

5- If I gave you a check for $5 million for you to invest in health technology today, how would you invest it?

Put it in the Launchpad Digital Health fund!

6- We make a contribution to a charity in appreciation of your time on the show – what charity have you selected and can you tell us a little about what they do?

ContraCosta Interfaith Housing – Ending homelessness one family at a time.  Our mission is to provide permanent, affordable housing and vital support services to homeless and at-risk families and individuals in Contra Costa County.


Dan Kendall

Dan Kendall

ABOUT THE HOST

As an engineer and business leader, I've worked to develop, launch and scale innovative products and solutions that impact health and wellness. As an entrepreneur, I know firsthand what it takes to start a business, build a team, and compete in the global marketplace.

On Digital Health Today, I leverage my experiences to help great leaders and innovators tell their stories and connect to users, investors and other stakeholders.

Connect with me on LinkedIn and Twitter.


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