One might say that things have come full circle for Kimberly Campbell.
November 3, 2016
Understanding Corporate VC with Kimberly Campbell of Mosaic Health Solutions
The third installment of our Women on the Other Side of the Table series
After earning her MBA from the University of Virginia’s the Darden School of Business in 2004, she spent three years with Johnson & Johnson. There, one of her roles included re-engineering an internal venture program, to better facilitate what she calls “corporate venturing” for the $70 billion company.
Today, she is back in North Carolina creating value for large organizations through her investments. She holds a leadership position at Mosaic Health Solutions, the direct investment arm of Blue Cross Blue Shield of NC (BCBSNC), as their head of consumer engagement and wellness solutions, where she writes checks into growth stage companies. The fund has invested in North Carolina companies Fast Med Urgent Care and Community Eye Care from Charlotte and Triangle-based Touchcare. Corporate strategic investment and the Mosaic Health Solutions name might be new to a lot of our readers, so we took a few minutes of Kimberly’s time to learn more about her and her take on this growing form of investment.
Who is Mosaic Health Solutions?
In essence, Mosaic Health Solutions was created 2 and a half years ago as the direct investment arm of BCBSNC. We have the responsibility of helping the health plan diversify its earnings and catalyzing innovation in healthcare.
For the first part of the equation (diversifying earnings) we typically skew more toward later stage companies,focusing more on growth equity companies that have already found traction with their business models. That is potentially one of the reasons the earlier stage companies may not be as familiar with us.
However, the flip side of that coin is the mandate to be a catalyst for innovation in healthcare, and we have found that a lot of what is really innovative is happening with much earlier stage companies. With that in mind, we have begun to earmark a portion of our portfolio for earlier stage companies and to establish ourselves as a partner for more venture-stage companies.
How do you how you find investment opportunities?
I should start by pointing out that we are not limited geographically and look at opportunities across the nation.
The growth equity companies we see have typically already secured institutional capital and are looking for additional funding to build out or scale their business. Part of our strategy is that we have fund-to-fund relationships (with other funds, investors), and we find many of those opportunities when our partners call us about a follow-on investment opportunity. We have also positioned ourselves as partner for accelerators, so we are there when companies “graduate” and are ready for additional funding.
While we work closely with partners, there are definitely no roadblocks to companies connecting with us directly. One way we have done that here in North Carolina is through our relationship with CED and their two conferences. We have found it very valuable to connect with companies there, both growth-stage and earlier-stage companies. I enjoy attending conferences and connecting with entrepreneurs, learning about their businesses and sharing a little bit about the areas of interest from our investment time so they have more direction on whether or not their offering is a fit for Mosaic.
Typically, we are not the first investor or first money in. If a company has not had any institutional capital, I would recommend making introduction to seed and pure-play venture capitalists that we have relationships with. If I hear a pitch and admire the solution they are introducing, or the leadership team is impressive, I may connect them to my network. That allows us to stay close to their growth, so when they are ready for the next stage of capital, we have a great relationship with both the investor and the entrepreneur and are invited to sit at the table for those conversations.
You say that your investment strategy is about more than just money. What do you mean by that, and how are you different from other investors?
Once we make those investments, we pride ourselves on going beyond just a financial investment, to more of a strategic partner helping our companies create commercial success. For example, one of our portfolio companies is FastMed Urgent Care. We were able to bring in our BCBSNC marketing team to partner with them on some marketing opportunities to our members.
Other things that set us apart include the strategic advice and guidance we can bring to a board conversation, our understanding of the healthcare market and the valuable insight we can share with a company trying to sell in through a health plans or the provider market. It’s also about the doors that can be opened the association with BCBSNC and our network. It is a vast network of potential customers, depending on the type of company it is. We take pride in being able to do for our companies and to help them navigate what can be a very complex ecosystem.
Why do you decide to become an investor and to join Mosaic Health Solutions?
As I mentioned, I had exposure to the world of investing early in my career. I have always an interest and love for this kind of work. My journey took me to different places including strategy consulting and ultimately to Weight Watchers where I had an operational role focused on innovation. That experience really shapes the way I look at deals. You can have a great idea with poor execution – or you can have a great idea but just not the right leaders to take it from vision to reality. I am able to pull from my consulting and operational backgrounds, to not only evaluate these opportunities but also to help our investments scale.
Have you faced any unique challenges a woman investor?
I am typically one of maybe two women in the room, but it hasn’t really been a roadblock. This is a very relationship-based business. People have been very gracious when I stay persistent because I believe in coming to the conversation with something to give, not just something to take. Then, they remember you when a deal comes across their table.
What advice would you offer to entrepreneurs?
I would say that the healthcare market sales cycle is not for the weary, and it always takes longer than you thought. I see a lot of nativity in entrepreneurs who have not made that sale before, and they end up backing themselves into the corner. That sales cycle can be a year long, so when you are courting these big plans or healthcare systems, you need to factor that into your plans.
In general, healthcare is an exciting place to play these days. It has attracted a lot of attention on problem solving, a lot of money. But, having a lot of money doesn’t’ necessarily mean you will be a success. I have seen a lot of companies blow through a lot of cash without a lot of results to show from it.
Because of that, I think there has been a shift in the market, where investors are being a lot more discriminating in early stage capital. They are looking for companies to show a much more clear path to profitability, so you need to have your business a little more baked and refined than before.
t’s important for entrepreneurs to know that all money isn’t good money. You really have to know what you are getting into when you accept money. Its like a marriage, you need to know what kind of partner you just invited to your table.
I would also advise entrepreneurs to really understand in their heart of hearts what their exit strategy is. There will come a day when the investor will want a return on that investment, and you need to know if you are comfortable with that.
Do you have any advice specifically for women entrepreneurs?
We see maybe only one in ten female entrepreneurs. In one way, that may make them even more valuable in the eyes of an investor. Since they are so rare, you are excited just to talk to them, maybe more open to giving them input and feedback, not just hear their pitch. I will say that these are untapped opportunities for investors, to invest in female and minority entrepreneurs. There is less competition for investing in these entrepreneurs, and fewer investors at the table.