Five Questions: Jumpstart Health’s Marcus Whitney

In this series, Digital Health Business & Technology will interview a range of digital health investors, from those who work at venture capital firms and at health system and health insurance venture funds, to individual and angel investors. If you’re interested in participating in this series, email us here.

Marcus Whitney is co-founder and partner at Jumpstart Health Investors, a Nashville-based fund focused on Black-led companies. 

Jumpstart Nova describes itself as the first Black healthcare venture fund in America. The fund focuses on Seed and Series A funding rounds. Whitney and the fund emphasize the relationships that founders can build with strategic partners able to help scale companies faster.

“Allocating capital to black people, I believe, is a critical component of making sure that you ultimately achieve health equity,” Whitney said. “I want to help create more Black healthcare, millionaires, so that those people can go out and do great work in their communities.”

Whitney spoke about how he’s navigating the current downturn, why investors are no longer overlooking the middle of the country and where digital health fails to deliver on its promise of equity.

The interview has been edited for length and clarity. 

A lot of experts talk about specific areas in digital health that may expand as the economy tightens. How do you view the space amid the current market correction?

The difference is really in the capital markets and what the capital markets will accept. It feels pretty clear to me that the markets are showing a preference for focused businesses and businesses that can get to a cashflow positive position relatively quickly.  At Jumpstart, I don't think we've drastically changed what we think needs to be solved in healthcare from two years ago to now. I just think the focus on how the companies are performing is much more there than it was before.

What is it like right now running a healthcare-focused fund that has a social element on top of it?

Our fund, first and foremost, is a strategic healthcare venture fund. An advantage that we have over most—not all, but most other healthcare venture funds—is our strategic limited partners. Those are not just checks. That's incredible insight. For the right companies, those are business development opportunities. It is a tremendous advantage for us. I don't think [the current market] changes much. I think it is better than many of our competitors. We also have fortunate timing that we completed raising our fund in 2021. So, as we entered 2022, we didn't have the burden of worrying about raising money.

Fundamentally, your firm is focused on driving equity. Is it more important that healthcare and digital health companies have that embedded in their mission?

I want to be careful to not make a sort of value statement about how it’s unimportant in other spaces, as it’s very important in other spaces as well. And yet, the stakes are pretty high in healthcare. There is a cultural level we communicate on about care. It actually has a lot to do with how effective we are at provisioning care. In addition, at a genetic level, there is a big issue. Different diseases and different therapies actually do impact us differently based on genetic makeup. That’s just science. You know, what I mean? There’s nothing “social justice” about that. But the third big thing that we’re now clearer on than ever, is that one zip code has a big, big impact on health outcomes. If you don’t incorporate diversity in terms of understanding that, then you won’t know how to implement different care modalities based on different zip codes. This is not the same as cultural differences, which can be communicated via digital means, that doesn’t have anything to do geography.

Do you think there is a disadvantage for companies coming from Nashville or the middle of the country?

One important point is my partner is in LA, and she’d kill me if I didn’t make that point. But, back to your point about being founded here and headquartered here. I think people in the healthcare venture world are really coming to understand how durable Nashville’s power is in this industry. I think less and less. Certainly, one of the biggest funded companies through the pandemic was Olive, and they’re based in Columbus, Ohio. So, I just think at this point, you can’t make a really great case for that anymore.

I’ve been in this venture game in Nashville for a while. I remember when it was that way. I remember when it was very, very difficult for companies here to get capital outside of the, small number of firms that were based here. Now, it just doesn’t feel like that’s the case as much anymore.

What do people most frequently misunderstand about your firm or the work you're trying to do?

One is the default thinking that because we are investing in Black founded and led companies that those companies are focused on serving Black people. I understand why that's what a lot of people think, but it's incorrect. Certainly, some section of our companies will focus on [the population], but many of these founders have focused on the healthcare industry, improving the quality of care for all patients. Specifically, if you’re focused on a particular disease, it’s not, then, further segmented by race. That’s not a knock on those companies that are, but that’s not 100% what we’re doing here.

There's a ton of conversation around health equity, and not a lot of conversation on how you actually finance health equity. Where are the payment mechanisms for health equity? Where's the code for health equity? Show me, I'm waiting to see that. So, I can build an investment thesis around that, but until that's clear, we're not going to be a health equity fund because we have to generate returns. We have to build companies that can be successful in the healthcare industry as it exists today. Now, if I had the time, I would start a lobbying company.