American Heart Association Fine-Tunes Venture Capital Approach
The American Heart Association, through its American Heart Association Ventures group, has developed a venture investment strategy that is backing innovations in digital health, medical devices and community-driven solutions. Lisa Suennen, managing partner of American Heart Association Ventures, sat down with Healthcare Innovation to discuss their approach.
Healthcare Innovation: Before we dive into talking about some of the investments you're working on, could you tell me about your background before coming to American Heart Association Ventures?
Suennen: I've been in healthcare since the late 1980s. I started as an entrepreneur, and helped build up one of the first big behavioral health carve-out managed care companies. The core of that company, while a very commercial enterprise, was very mission-oriented. The fundamental belief of that firm was that you could use clinical quality and access to drive better outcomes and better cost. At the time, that was a very weird thought for most people. When we sold that company, we started a venture fund that focused on that same theory — that you could improve quality and cost by focusing on clinical value and outcomes and access. Since that firm started in the late ‘90s, I've gone back and forth between venture capital and entrepreneurship and operating roles around health tech, health services, and medical devices. Ten years ago, as a consultant I helped the Heart Association start its first venture fund, called Cardeation Capital, which is still very much alive and well. The Heart Association was completely new to venture capital, and it was still finding its way, as was most of the not-for-profit world in terms of thinking about how to do venture capital in an effective way that's appropriate to that segment. But it has evolved tremendously since then. About a year and a half ago, Nancy Brown, CEO of the American Heart Association, asked if I would come in and build a bigger program.
HCI: We write about big health systems that form venture funds. For instance, UPMC Ventures is one of the partners in Cardeation. But I don't think we've written before about an association that's disease-specific having a venture fund. Do others have something similar?
Suennen: Yes. The American Cancer Society has a big program; JDRF [now called Breakthrough T1D] for diabetes has a big program. So now it's kind of common. Ten years ago, when Cardeation was getting started, it was not so common. When I was in my consulting phase of life, I helped a bunch of firms get going in that area. The focus is, how do you use venture as a lever to improve operations, improve care delivery and also make money, right?
HCI: Let’s talk about some of American Heart Association Ventures’ initiatives. Can we start with the Go Red for Women Venture Fund, which is focused on issues related to women’s health? I saw it described as having a $75 million capital target. Is it already approaching that goal? And has it already started investing in startups?
Suennen: It is a new program. It started to come to life last year. We conceived it and kicked off the fundraising and hired the team. It has raised almost $60 million of the $75 million. It is a donor-funded fund related to women's health, but through the lens of cardiovascular and brain health. It focuses on how cardiovascular disease and brain health show up differentially, disproportionately, uniquely for women.
HCI: I read that a percentage of the funding is reserved to catalyze creation of companies that originate from American Heart Association-funded research. Have there been some startups launched out of Association-funded research? How do you Identify which research projects might lead to a company idea that's sustainable?
Suennen: The American Heart Association funds hundreds of millions of dollars of research every year. It is the largest funder of cardiovascular and brain health research after NIH, so we have a massive database. We know what we funded, and some of it is basic research, and it's a long path to commercialization. Some of it gets licensed, and we can see that they've created a young company that we can support, so we are actively looking for those.
HCI: Some people doing the research may not think of themselves as entrepreneurs…
Suennen: They're researchers. Yes, that's a different issue. The Go Red Venture Fund, for instance, would look for things where the entrepreneur has been declared. The Studio Red program, which is our incubator, is looking for things where the entrepreneur may not know that they're an entrepreneur or the clinician may not know that what they've developed is a commercially viable idea. We’re taking other paths to look for those things so we can help commercialize them and build companies around them.
HCI: Is Studio Red fairly new?
Suennen: We have two active programs that we've worked on over the last six months. One is very specifically using American Heart Association assets and people to help think about how to solve a particular problem in the delivery of care, and it just launched, although it's not been announced yet.
HCI: Is one of the roles that the Heart Association plays finding health systems or clinical settings where people can test out something that's promising?
Suennen: Yes, we can definitely do that. We have relationships with all of the health systems for various reasons. For instance, in the project I just mentioned, there is a health system that is engaged in that as a co-founder as well. Also, the Heart Association has training, certification, consumer education, provider education, registries, and clinical trial capabilities. We have a variety of things we do as an organization through our various businesses, so we can help bring those assets to bear in one form or another.
HCI: Let's go back and talk about Cardeation Capital, because it sounds like that preceded some of these other efforts. I saw that involved Philips and UPMC Ventures. How did that come together? And have there been some successful startups launch out of it?
Suennen: That came together, almost 10 years ago, out of a lunchtime conversation I had with Heart Association CEO Nancy Brown on how to close that gap between science research and know-how and where the rubber hits the road for patients.
I came on and did a bunch of research around the organization and around the industry, looking at different models and what would fly effectively at that time. Ten years ago, we decided that the best approach would be to partner with a venture fund that existed already, which in this case was Aphelion Capital, who had a very deep knowledge of the sector, and was small enough to care a lot about us and big enough to be influential. We would partner with them to build a bespoke fund around our mission that they would administer, and we would bring in some like-minded investors alongside us, who would add money, but also knowledge and paths to market and expertise to the process. Fund One was kicked off eight or nine years ago, and it made 11 investments. There's a really nice portfolio there around cardiovascular and brain health and related conditions. Mostly it's medical devices, although there's some digitally enabled stuff as well.
HCI: Have Philips and UPMC continued to invest?
Suennen: When we went to raise for the second fund after the first was fully invested, Phillips returned. UPMC had by then built a pretty big venture fund of their own, and they decided not to come back as an investor, but they are very engaged and supportive. We added RCT Ventures, which is kind of a fund of funds that works a lot in med tech. So the second fund kicked off two years ago approximately, and it's now made five or six investments.
HCI: Let’s switch gears and talk about the Social Impact Funds. Is that different? Is American Heart Association Ventures expecting a return on investment from them? Many are nonprofit organizations.
Suennen: We are not expecting return on investment from nonprofit organizations. The nonprofits are grants, not investments, right? That fund has a bit of a different focus. Number one, it doesn't focus first on returns; it focuses first on impact. So we're measuring how many people are we bringing something of value to? What is the value we're bringing? Many are charitable enterprises addressing food insecurity, access to care for uninsured populations, mental health, workforce development and programs to support financial literacy.
HCI: One of the companies I saw listed I'm familiar with, and that's Pear Suite. I have interviewed Colby Takeda, who's the CEO there, and some of his customers in Hawaii, and I've written other stories about the community health worker space.
Suennen: In the for-profit portfolio that's an emblematic type of deal for us. It really enables the delivery of good care to people who don't always get it. It enables the empowerment of people into jobs as community health workers, so they now have a living wage, and it's got a kind of perfect virtuous circle to it. Now, will that company create a financial return? I hope so. But that's not why we did it.
HCI: This part of your work has really grown. I read it funded 34 organizations in 2024 and that was up 100% from 2022.
Suennen: I think we've made close to $40 million in commitments in that fund over the six or so years of its existence. And it's accelerating, not declining. We make on the order of close to $9 million to $10 million a year of commitments. They're small. They're usually $350,000 to $500,000 in early stage endeavors. It started as a granting enterprise only. It evolved to do both the for-profit and not-for-profit. And really the rigor of it, in terms of thinking about the validity of the science, the validity of the models, how it's implemented, has really grown, and we're just super proud of it.
