Episode 38: Investing in Women Founders with Portfolia CEO Trish Costello
Why investing in women is a good bet.
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In this episode, Carrie and Trish discuss:
What the consequences are when women’s health is underfunded
Why women’s health is underfunded
How to drive innovation in women’s health
What the emerging issues are in women’s health
Keep scrolling for a transcript of this episode.
Key Takeaways
Innovation in women's health has been woefully underfunded and it results in compromised health outcomes and lives for women of all ages.
Much of the reason innovation in women’s health is underfunded is that 95% of innovation investing is done by men who often misunderstand or are uninterested in women’s health.
Investing in what you know is a fundamental investment principle. Who can know better about women’s health than women themselves? Therefore, the best way that we can drive innovation in women’s health is to get women to be involved financially.
There is so much more emphasis on reproductive health, childbirth, and birth control in the women’s health space now. It’s also much more important to make sure that people’s data is protected.
Learn more from Carrie and Rebecca:
Healthcare insights (monthly email) | Telehealth/Virtual Care Mgmt Update (biweekly LinkedIn update)
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“Money is power when it comes to backing new innovation.
”
Connect With Trish Costello
Website: https://www.portfolia.co/
LinkedIn: https://www.linkedin.com/in/trishcostello1/
Twitter: https://twitter.com/trishcostello1
Read the transcript
Announcer (00:01):
You're listening to Decoding Healthcare Innovation with Carrie Nixon and Rebecca Gwilt, a podcast for novel and disruptive healthcare business leaders seeking to transform how we receive and experience healthcare.
Carrie Nixon (00:17):
Hello everyone. Welcome to the latest episode of Decoding Healthcare Innovation. I'm Carrie Nixon, and I am thrilled to be joined by Trish Costello of Portfolia. Trish is someone I have known for several years now and someone I have admired for several years now for all of her efforts in teaching women how to not be afraid of investing. I want her to talk to us a little bit about Portfolia and about how Portfolia's work relates to innovation in healthcare. So actually, Trish, I'd like to turn it over to you to give an introduction of yourself a little above and beyond what I did, and to tell us about sort of how and why, first of all, you started Portfolia.
Trish Costello (01:05):
Well, Carrie, I am so thrilled to be with you today, and as you said, we've been in this work together now for a number of years really activating women as investors in the innovative companies of our times. And this is now our 14th venture fund that we've just launched. We have invested in 125 innovative companies that women want in the world, and that really is what Portfolia is. Portfolia is a family of venture funds that were created so that we can invest as women in the kind of companies that we want to see in the world, the kind of companies that will impact our lives and be able to do it in a way that feels really comfortable. So very educational very much a community kind of approach. We all get to be involved with it, and most importantly, we're backing really amazing companies that enhance our lives and we're making great returns while we do it.
Carrie Nixon (02:17):
That is certainly the case. And I can tell you, you know, a number of years ago in sort of the pre times, actually probably 2018 before Covid hit, I had the pleasure of joining you and other Portfolia colleagues at a conference in St. Louis or maybe Kansas City. Kansas City.
Trish Costello (02:37):
It was Kansas City, but close.
Carrie Nixon (02:39):
Yes, Kansas City. Sorry, my apologies to Kansas City. We had a great conference there full of women who you know, some of whom were investing for the first time and all of whom were eager to contribute in whatever way they could to supporting women investors and women led companies and companies that impact women's lives. So, you know, again, thank you for, for the work that you have done on that front. Now, you know, this podcast focuses specifically on healthcare, and I know that several of Portfolias funds have included healthcare companies. Can you talk a little bit about those and the funds that, that you have that, that you've had over the past several years that may have supported some healthcare companies?
Trish Costello (03:29):
Yes. So Carrie, I would say that what we're most proud of at Portfolia is we created the very first venture capital fund focused on women's health. And that is a bit embarrassing to think that in 2018 there still had not been a venture capital fund focused on this really enormous market and an area where, again, there's an opportunity to make great returns as an investor, but that it really impacts our lives. So we are now on our third just launching our third women's health fund. But we also have venture funds to venture funds in active aging and longevity. And most of those companies also have to do with women's health, just you know, at that 50 year old and plus, so we're the single largest investor in menopause in the country. Maybe the world, but certainly in the US we're also the most active investor in women's health in the us.
(04:39):
So everything from, you know, those first periods all the way through menopause and later life issues that happen as we age. So we're, we are really the one that gets to see almost every company out there from the various early kind of precede concept, you know ideas on women's health all the way up to those private companies that are getting ready to IPO, over 40 companies right now that we're backing in women's health. Also, with that, Carrie, you know, we're doing direct women's health, menopause, breast cancer, you know, anything to do with our ovaries or, or those types of things. But we also invest in companies that are kind of general health, but where women you know, where, where women need a little different type of approach or where it expresses differently. So heart disease is different for women, and we invest in companies that have to do with heart disease or pain management or mental health or addictions. You know, all of these need to have a different view or direction. And so those are just as important to us. All of these, these are impacting our health.
Carrie Nixon (05:58):
Yeah. It seems obvious that one would need to look at women's health through a different lens than, than men's health, right? Or children's health. I mean we are, we are, we are different, you know, in our, in our chromosomes. And it seems like an obvious thing yet. I wanna circle back to something you said at, at the very beginning, which is that Portfolia hosted the first venture fund in women's health in 2018. Yes. That is not long ago. And it is incredible to think of when you think about the market opportunity that exists in this space. Let's talk a little bit about why that is, Trish. What took so long for someone to come along and say, Hey, we need a fund that focuses specifically here?
Trish Costello (06:54):
So, Carrie, I believe there's a couple of reasons for it, but the most important one, and the most obvious one is that 95% of investors are men. 90%, 95% of venture capitalists are men. And that's where the money comes for those new innovations in these private companies. So with so few women, they're not personally aware of issues and problems and concerns that women face in their healthcare. In fact, they can be kind of squeamish about a lot of the things that we are dealing with. I recall early on when we first were putting together our first women's health fund and I was talking to a number of healthcare investors, and by the way, in 2018, only 20% of all healthcare investors had ever invested in one women's health company.
(07:58):
So it wasn't just that they weren't focused in that area, they just were not looking at those companies at all or backing them. And, and, you know, venture capitalists are professional investors, but one of the maxims of the area is that you invest in what you know, and so you've never period, you've never been pregnant, you're never going to go into menopause. It's just something you don't know. So that's really the biggest problem. There are physicians that are in healthcare, but they're not OB gynecologists. Right. So even within that, you know, market, you just don't see, you know, a lot of that special, that special interest. I'm gonna give you, if I can, one example we talk about, you know, talking about something where you don't have experience. We've been looking at a number of companies that will give us different ways to screen for breast cancer.
(08:55):
Now if you are, if you've never had a mammogram, and when I talk to a number of men about some of these companies we're looking at, they say, Well, why would you wanna bother with that? You have mammograms and you know, it's a CapEx in hospitals. Nobody's gonna wanna get rid of that. That's a big profit center. Right. Only a man would say that you talk to any woman and say, If there were other alternatives to screening for breast cancer besides radiating your healthy breast in a mammography machine, would you be interested? And of course, we all say yes, right? And so you take that by a thousand different conditions or issues that we deal with, and we are the ones that should be, that have that knowledge. We should be the ones green lighting the kind of companies that we want in the world.
Carrie Nixon (09:43):
We should absolutely be the ones leading the charge. Yeah. It makes total sense. You know, you have the most knowledge and understanding of things that you are familiar with, and when you have the most knowledge and understanding, you understand the needs, right? And that is just critical. So what do we do to sort of change this dynamic? You clearly are working on it in, in getting more women interested in investing, but what else can we do to sort of bring women's health companies and femtech companies to the forefront more broadly?
Trish Costello (10:20):
Yes. Well, I do think that the investing side is the most, is the most important because, you know, money is power, money is power when it comes to backing new innovation. So I do want to say that I think that's critically important. You know, all of our funds—femtech, active aging, we have a fund of led by all women of color. They're doing a lot of women's health as well, because that's a huge, huge issue that, you know, maybe we can touch on again in a little more depth later in the, in the podcast. So having women around the table, our funds are run by women and having women who are investing in those funds. And so we do let women come on and invest for $10,000. That's the minimum amount. And that goes into 10 to 12 companies, all that are kind of early stage innovative companies. So it's important if you have the capacity to invest that kind of money to consider putting your money behind these kind of companies that will enhance our lives and that of our children and our mothers and others.
Carrie Nixon (11:25):
Yeah. And I wanna underscore that for a moment, Trish, because you know, it is the case that many venture funds have sort of a minimum investment amount of $250,000 or even $500,000 or more, right? And, and that that kind of benchmark, like creates a barrier for many women who would otherwise like to invest. $10,000, while it may not be in reach for many women, is certainly a much better reach and a, and a much more attractive and feasible option for women who want to get active in the space than starting out at $250,000 or $500,000. And so I think, you know, my sense is that Portfolia is pretty unique in allowing an entry point for women that is more manageable.
Trish Costello (12:24):
Well, that's true. And you can be an angel investor and invest a $10,000, but that's in one company, right? And so it's really important when you're investing in new innovation that you have, you know, very quick diversification because some of these companies will fail, you know, they are, they are highly innovative. And so, you know, with the fund, and that's why, that's why every pension fund, every big foundation and, and and trust, you know, does put at least 10% or sometimes up to 20% of their money in venture because that's where those new innovations are being backed. And, and and so it does give you that instant kind of diversification. In our case, what we do is, you know, Carrie, is that we know that that women want to be involved. And so we will, we let all of our investors and we take 250 investors in a fund, we'd let them come on, and every month there's a set time and they can watch the companies we're considering as they pitch the company.
(13:34):
We watch the founders. Yeah. And then those founders go off and the partners actually discuss. So you're actually at the table, you know, on Zoom, you're actually at the table listening to how we evaluate a deal, what we like, what we don't like, what we would need to see in, you know, in regards to terms, you know, where we think their weak points are. And it's all confidential, but you can actually be there and be a part of that every month. And so you are, you are passive in that you're not making the final decision, but you're certainly active in that. You are learning a lot, and you are really connected to the company and the entrepreneurs through that.
Carrie Nixon (14:13):
Yeah, it is absolutely the case that I have found, you know, sitting in on pitch calls to be very educational, very helpful. You know, a lot of the, the early stage companies that we work with at the Firm are, are going in front of investors and are pitching to investors. And it, it previously was not a space that I was very familiar with, but it has been incredibly helpful to me, both personally and professionally to be able to sit in, in on these pitches, to ask questions via the chat, right? Of when, when, when they're pitching, and to hear the questions that the fund leads are asking to those companies who are pitching. And then to be sort of in on the conversations afterward when, you know, when you're trying to determine is this a company that we're gonna invest in? I just think it has been incredibly educational and useful. So given, you know, given these pitches that you've had, had, you know, many throughout the course of sort of the femtech, the two femtech funds that you've already had, and the aging and longevity funds and the women of color in the BIPOC fund, talk to me a little bit about some of the emerging issues that you're seeing in women's health today and the innovations that are popping up around those issues.
Trish Costello (15:39):
Well, there is there's so much, but I think that one I would start with Carrie is one that we're, we're all familiar with, and that's reproductive health right now. Yeah. And we've always done a number of companies that have to do with childbirth and birth control and different things like this, but there's really an emphasis on it. Now. We, we just have backed and so we're looking at all kinds of solutions, and here's one that's a little counterintuitive, but we just made the investment into what holds the promise of becoming the first male daily contraceptive. So the first male birth control pill.
Carrie Nixon (16:26):
Wow. Fascinating.
Trish Costello (16:27):
Yes. Yes. And so people say, Well, this is for men. Yes. Think what it will do for women's health is
Carrie Nixon (16:34):
Women absolutely
Trish Costello (16:35):
The only ones right. Carrying this load. And, you know, the hormonal load that we've often put on our bodies with birth controls. So this is it's a team out of Berkeley just some of the top sperm scientists in the world, and that we're really thrilled that we're one of their major backers right now. And have just just signed the papers on that one. We're also backing a company that is providing drugs for abortion, so that with both telehealth and services, and those services are all across the, the spectrum for women, but they're really looking at what other solutions are for us to be able to manage our in place a placement of our, of our birth, of our children, and manage our reproductive health. So those are two that are really key. Another one is to look at companies where our, in the same vein where our data is being clearly protected.
(17:43):
You know, a number of those early companies that are period trackers, those are really data companies, right? And that, that data is told to others. So it's, yes, it's a service to us, but that's not really the business model. And you know, now with a lot of the controls that are out there, those data those data sales can really, could really impact our lives. And so that's another area that we're looking at, is making sure that all the companies that are being backed have that same privacy issues and con and, and protections that we demand.
Carrie Nixon (18:19):
Absolutely. That's critically important. So you mentioned Trish, that Portfolia also has I believe it's the Rising America Fund that's, that's focused on women and women in the BIPOC community. And I'd love to talk about that a little bit and the role that that fund, in addition to femtech and aging and longevity can play in making sure that women are participants in clinical studies. I think, I think many folks are now aware that women have really been unrepresented in clinical studies, and my suspicion is that funds like this can play a role in remedying that. Would you speak to that for a moment?
Trish Costello (19:10):
Absolutely. That has been a major issue, you know, for many years. you know, the studies left out women purposely and now the federal government does require that you have women in your studies, but it's very, can be very difficult because those systems weren't in place to include women to ensure that you have, have women and women of color, as you said. Yes. So we are actually very active with that. You know, we have thousands of investors and over almost 20,000 subscribers at Portfolia in 46 states and 18 countries. So one way that we do work with our companies is to actively recruit women during the trial period. So for instance, we have a company called Bone Health, which is a spin out from NASA, and actually is a device that enables us to hold on to our bone mass and may even enable us to rebuild bone mass as we age.
(20:14):
Especially during the, the pandemic, they had a really major difficulties in finding people for their studies. And so we were able to assist them with that. We've done the same with the company called Ieena, that's looking at how you use saliva to to diagnose cancers early. And we have assisted them with participants in you know, from our membership and our subscribers. And because we have two venture funds led by five women of color, and many of them in those funds are women of color. We've also been able to recruit a significant number of women of color for these you know, for these studies. You know, when you're looking at women of color, I mean, it's bad enough for women. We don't have solutions and our lives are compromised. You know, we all know I think most of us, because we're, you know, we're pretty facile in following women's health, but we have a terrible percentage of women who have bad outcomes or even deaths from childbirth.
(21:24):
Right. And a lot of that is because we have not invested in innovation. You know, we have the same solutions for preeclampsia, you know, that we had 30 years ago. The same for hemorrhage and those types of things. And women, especially African American and Latina women are especially impacted with by that, with these really high mortality rates. And so that's an area that Rising America is focused on, and we've made a number of investments in that area. One of our companies, Maven Clinic, is working with a number of states. They actually do both high-end services for within corporate environments, but they've now taken on a number of contracts for Medicaid to ensure that the services they provide for high-end women are also being used to have better birth outcomes for women that do not have that same kind of financial access.
Carrie Nixon (22:30):
I mean, that's critical. Yeah. That is, that is fantastic. And it is it is work that I am glad is happening and I am really looking forward to it continuing. And it is, it is much, much needed. So let's shift gears for a moment before we, before we wrap up. There's been a lot of buzz about the economy and about what inflation and sort of the craziness in the economy overall right now will mean for investors and the companies that they may be that may be seeking investment going forward in the near term. I would love for you to speak to your take on sort of the investor environment in general over the next year or two. And then I would also love to hear specifically what is on the horizon for Portfolia?
Trish Costello (23:25):
So Carrie, you know, one of the, one of the positives, there's a lot of negatives about the fact that so little has been invested in women's health. One of the positives is that these companies are so resilient. You know, they didn't have these enormous valuations like you see in the general tech sector and overvalues that we saw in the public markets. These are companies that are super capital efficient, they have to be smart, they can't overhire. And so what we've seen is that our portfolios across the board, but especially in women's health, have continued to be quite strong. You know, as I said, we didn't have these huge valuations and we don't have these huge drop-offs. So investing in women's health is still a really a really attractive opportunity to put our money toward no matter what's happening in the public markets.
(24:34):
Yeah. So and we're really, really pleased with that. The other thing with us is that, if you know venture capital well, like I know you do, Carre, a lot of money is tossed into very young tech men, you know, <laugh>, those those 20 I was gonna say, you know, those 20 year old to to 30 year olds many of them that, you know, drop out of college and instead, you know, get these 10 and 20 million checks to create things. You know, that's not the same with the kind of companies. We back very experienced mostly women entrepreneurs. So about 75% of our CEOs are women, but very experienced. They have, they're resilient. They have deep expertise, and so they're less likely to make dumb bets, you know, or to do things that are just really risky.
(25:30):
And so again, that's why, that's why I think when you're looking at investing it, you really should look at the kind of companies like this or active aging or people of color, all of them, again, capital efficient, resilient, and smart. And so we're going to just continue doing what we're doing backing these. We've not really talked a lot about menopause yet, but menopause itself is a huge industry. Totally agree. Just in menopause. And that's another area that VCs have not backed. I actually had one of them tell me, Carrie, he didn't really wanna see any of my menopause. You know, you, you often bring other partners to invest with you and you know, a person said, I really don't wanna see your menopause companies because my team really likes to do the sexy deals. And oh, laugh out of that. It's like, you know you know, we actually have, we, we do some pretty sexy deals in menopause, but but it's a huge market, great opportunities and just scratching the surface really in investing.
(26:37):
And that's why there's so many issues still. There's not a lot of me too companies. There's just a lot of really smart investments that are out there. So all of those are good. Where are we going with Portfolia? Well, one of the things that we, one of the areas that we added and our funds are considered thematic funds because every fund is around a particular theme or focus. And, and we build a team of five to six partners that run that fund who are experts in that space around the country and globally. So very well known, as I say, for FemTech and Active Aging and People of Color. We've added two new areas this year that I think were equally important and they have to do with Green and Sustainability. So one is a pure green and sustainability energy fund. The other is Food and AgTech.
(27:33):
And you say Food and AgTech, Well, it has a lot to do with health, but it also, 40% of all greenhouse gases in the world come from the creation movement di digestion and wasting of food. And so those are also areas that are critically important and will continue to move in those kinds of spaces that, that are really important to women. And then finally, we're going to over the next year, add additional, these are all thought of as alternative assets, so not what you would just normally get in the stock market. We're gonna continue to add to that. We're looking at real estate funds that are considered alternatives. We're looking at art funds because there's also a lot of money that can be made in art funds and others like that. We've not moved into crypto. We think there's still a lot of regulation that has to happen in crypto. So you know, we've, we've not moved into those spaces, but we really like a lot of these, you know, areas as I said, like green and sustainability and others that I think women really want to create a legacy around as well as, as make returns.
Carrie Nixon (28:52):
Terrific. And can we look forward to another femtech, women's health fund opening in Portfolia? I know, I know that Femtech One and FemTech Two I think are recently closed? Will there be another opportunity for folks who want to invest specifically in this space?
Trish Costello (29:11):
Absolutely. Carrie, thank you for asking. In fact, we did make our very last investment in FemTech Two and Fem Tech Three. We'll be opening within the next 30 days. You can go to Portfolia.com and remember that's Portfolia, the Latin feminine for Portfolia and get on the wait list. That fund will close will close quickly. We can only take 249 people because of regulations. In the meantime, active aging and longevity is open. and it does do a lot of women's health mostly 50 and above and others, some other social things too, you know, that we're looking at or, you know, end of life you know, or legacy planning and that type of thing. But a lot of women's health and most of our menopause companies are back there. So, but what you can be sure of is that for the next decade, there will always be a Portfolia women's health fund. I have a new granddaughter, a little year old granddaughter. And I look at that and I say, I'm investing. And I have two daughters that are twins grown. And I always say that my investments must enhance the life of my children and my grandchildren. And that's why I'm creating these funds, and that's why I welcome other women to be a part of them with me.
Carrie Nixon (30:38):
Oh, amen to that. And thank you for doing that. Trash. It is incredibly important for the future of our country and the future of women's health. So thank you very much for your hard work on that in on that front. I have loved this conversation with you. I have loved the conversations that I've participated in with Portfolia members, and I would urge anyone listening to check out Portfolia, we'll make sure the website is in the show notes. Trish, thank you so much for taking the time to join us today. I really appreciate it.
Trish Costello (31:11):
Thank you, Carrie, and thanks for all the work you do getting the message out on healthcare.
Carrie Nixon (31:17):
My pleasure. All right, until next time, this is Decoding Healthcare Innovation. Have a great two weeks until we see you next time.
Outro (31:27):
Thank you for listening to Decoding Healthcare Innovation. If you'd like the show, please subscribe, rate and review at Apple Podcast, Spotify, or wherever you get your podcasts. If you'd like to find out more about Carrie Nixon, Rebecca Gwilt, or Nixon Gwilt Law, go to NixonGwiltLaw.com or click the links in the show notes.