Redesign Health - Up and Coming Fund?
Has anyone heard anything about this firm? Founding team looks very legit, as does the group they’ve assembled under them. Seems to be a mix of former PE, HF, IB, and consultants launching 10-20 new healthcare companies per year. Appears like they have good traction thus far, but there’s isn’t too much online about them outside of a WSJ article.
Briefly recruited for a position there - it’s a pretty interesting model, almost like a heavy-ops focused seed investor. Typical finance backgrounds feed into the Strat and Fin Associate position and you touch a lot of areas beyond just investing (fundraising, FP&A, etc). I got the sense they really work hand in hand with founders to stand a business up and provide a ton of resources.
what would be a realistic comp range for an associate at one of these venture studios?
did they reach out directly or through a headhunter?
I’ve heard great things about their New Ventures team and have one friend who works there that I consider among the smartest people I’ve ever worked with. It will be interesting to see how the fund scales, but they’ve had some early successes and are backed by smart LPs.
what would be a realistic comp range for an associate at one of these venture studios?
Their business model is just a larger-scale or more formal version of a phenomenon that's been pretty successful the latter half of this past decade.
At the earliest stage, the lines are very blurry between the work a 'founder' and an 'investor' does. The biggest differentiator is concentration of time. Let's use an example.
A guy has an idea. He used to work at Dropbox, and since he was an early employee, was involved in the hiring process for hundreds of employees as the team scaled. He decides there's a more efficient way to track your interactions with a candidate before they actually apply (and are tracked in your ATS like Greenhouse or Lever).
He talks to 150-250 other people who are either hiring managers, recruiters, or frequent interviewers to validate the idea: learn their pain points, understand their existing workflow (do they track conversations in Excel, is there a shared Trello board inside the company, did they build internal software, whatever), and gauge their receptiveness as a customer. He decides to incorporate, buys subscriptions to all the basic software (let's not lie, he builds the first guts of every damn thing on Notion), and starts chatting up former coworkers, friends, classmates, any people he thinks are smart and scrappy and will be useful as early team members. He hacks together an MVP, shows it to all those potential customers he spoke with in his discovery exercise, and tries to get his first clients.
That's a founder. (And the company is called Gem.)
Now, what does the first investor (let's say a $500k check) do? Turns out ... all the same shit. Only instead of spending 60+ hours a week on all that, it might be 5 or 10, because there's four other companies that person wrote a check to who all have the same needs and require time.
What I'm trying to illustrate is that the work you do as a 'supportive' investor in the first inning is really analogous to the work the company team is doing.
This is why 'seed' as a stage developed. I've said it before on this site. Josh at First Round was one of the original first-check people. Roger at IA (who just "retired" last week) too. By people I mean they weren't a firm. Firms did Series A and onward, which is why that round is titled that. It signified the first time an institutional investor got involved.
Because it was personal money, the "don't let it flame out" instinct was way stronger, which translated into spending more time helping the recipient of the check.
Eventually Josh, Roger, and at roughly the same time, a few other guys doing the same type of thing chose to (you could say the market dragged them to) build their own firms around that specifically: the 'we help you in the trenches' investing.
All of that is less than 20 years old. (First Round I and II were 2004 and 2006 vintages, I believe.) Nothing is set in stone, there's no single 'right' way to do it. People are still experimenting with the smartest way to structure having financial and time exposure to a portfolio of young businesses.
Betaworks is the oldest I can think of (pre-crisis for sure, 2007 I believe). Expa is 2014/15. Human Ventures is of similar age. Atomic (got a ton of attention when Hims and Hers did a SPAC deal) and Juxtapose are younger. Redesign Health has smart people involved and seems to have a promising start, but everything that I'm aware of is just paper marks from other investors doing rounds in the spinouts. Fractal Software is another but is way less public. Thrive (Kushner's fund) has done the whole gamut of what I wrote above.
If you're coming from a finance background, you're probably going to be in either a finops type role (managing financial and accounting systems) or a general bizops role (blocking and tackling on core processes or internal systems that are the glue of the company).
If you're in banking and interested in a tech role, any of the names I listed are a great entry point.
If you're already in private equity, the comp hit is going to feel pretty rough and it may feel like you're farther from the action (product; and why would they take a two-and-two guy for product when they could go get a product person from any of a hundred venture-backed startups).
If you're in VC, the comp is probably comparable and you'd be moving to an operating role (depending on your background and abilities, maybe even product).
This was a riff, I hope it's helpful.
My general take is that the studio or holdco model is great for the people who set it up. It's good for the first batch of hires (at the topco), but since it's a thing where you can reach critical mass (at some point, you have enough bodies to support all the teams working on projects or subsidiaries), those seats are limited. And joining one of the spinco startups is exactly like joining any other.
what would be a realistic comp range for an associate at one of these venture studios?
Structurally comp is a base salary plus equity in the management company which is itself raising VC capital. At least that was the pitch for one non-investing role I spoke with them
about.
what was the base range?
I didn't pursue the role so not sure. Market would have been around 200-225 for the seat.
did they reach out directly or through a headhunter?
Had late stage interviews / chats with them. Basically they are just a few accomplished professionals with HealthTech / Tech / PE etc. experience betting on the next health tech incubator (essentially operating as a VC with stealth capital) that will IPO one day (each senior professional has significant equity in the business, and they also get equity in each startup they incubate so the reward seems promising, assuming their bets take off).
Would say this is more of an entrepreneurial route for junior folks. PE/HF isn't for everyone.
Very interesting concept. Have applied here a few years back but didn't get an offer unfortunately. Seem to be gaining decent traction. Have a lot of employees who have similar healthcare connections as I do on LinkedIn so I assume they're definitely legit.
In terms of being lucrative for early employees and the investments into stealth startups, I somehow question it. So many HealthTech companies have valuations that are in a bubble IMO (many being current unicorns).
did they reach out directly or through a headhunter?
Bump. Bit curious, does Redesign Health have clinicians that work for them full time in senior/exec roles? Or is it just mostly ex-consultants/IB/PE/HF?
Hopefully there is someone from the platform who lurks on here and can provide a further insight on their senior/exec structure.
Basically like their new venture team comes up with ideas for businesses and then they go and start the business themselves so that investment professional goes and (obviously works w others) to hire a management team and put it all together and then they fund that startup from their own fund. The comp is that you get equity in the businesses you start. Pretty sick
Following
Comp at junior level is a joke - need to come in at a higher level to realize any benefits from future equity
how did you get in touch with them? through a HH?
Bump, also curious if anyone know which HH / recruiters they use.
Stop following/bumping. Redesign laid off a massive number of folks year-end last year. It's just another VC fund (but in reality a large portfolio company) that's betting on various healthcare themes.
Got an offer from them last year which I ended up turning down.
They have a single associate program that operates across the two platforms - Ventures and X.
Ventures is they basically come up with an idea - do a bit of work on TAM, minimum viable product (massive employee base that does engineering, design etc outside of the investment teams), etc. If they like it will seed it with some money (think it was $100-500k) and work to hire an initial team. From there they move as quickly as possible to raise a seed/series a where they sell down some of their stake and don't invest any more capital. Each investment is structured as an SPV and there's a one-time $2M fee which I think might be equitized but not sure (no mgmt fees/carry afterwards).
The X platform is more growth oriented - cut $10-20M checks. Usually start smaller at like $5M with ability to put another $15M to scale. This is for more capital intensive businesses think a brick and mortar clinic vs a purely digital business in the ventures portfolio.
The people are all from top consulting firms, hedge funds, and PE firms so super strong investors but didn't seem to have a ton of operating experience on the investment team in my view.
Associates work across both platforms but principals (Think 4 years post banking) are in one division vs other. Senior associates also tend to focus on one vs other
Culture seemed really good and benefits were crazy - like a year of diapers for new parents, summer camp allowance for anyone with kids, one medical, monthly stipend for supplements, etc. Option to be fully remote or hybrid in NYC office.
Associate pay was $150k, no bonus, with some equity which didn't seem like a very meaningful amount.
I think it was 25-50k bump per promotion. Not really a place you go to make a ton of money
As you get more senior you get equity or options in the companies you create on top of your equity in the overall business.
Because it is an operating company vs a fund you don't have any carry or management fees. A lot of investments and expenses are all off the balance sheet and it's a VC funded business that burns a lot of capital every year.
How was the interview process? Do you mind giving me insights on it as I have an upcoming interview?
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