A new residency-venture program helps to tackle one of the most pressing issues in the U.S. — healthcare.
Mary Minno, an investor and former product manager at Google, announced on Wednesday the launch of an early-stage startup accelerator program called Treehub and an early-stage venture firm called AI Health Fund, aimed at backing startups working at the intersection of healthcare and AI. The AI Health Fund is the venture arm of the Treehub residency, where founders apply to incubate their ideas.
The residency program lasts six months — the first 12 weeks are dedicated to helping founders find product-market fit, and the last 12 weeks are focused on company direction, Minno said. “It could be raising a large round, it could be joining a traditional accelerator, or perhaps deploying across a hospital system.”
She got the idea for launching a residency and a program late last year when she was six weeks postpartum with her second child, and when a family member was diagnosed with acute leukemia, going from “being very healthy to very sick virtually overnight,” she said. She didn’t like how hard it was to find a specialist for this family member, how long they had to wait before they could be treated after being diagnosed, and how policy and outdated technology often slowed down the treatment process.
“It’s only when people went outside of that system and broke the rules that things could happen,” she said. “I realized that we need more startups here because they’re going to challenge the status quo.”
So she turned to her longtime friend Esther Wojcicki (an educator and mother of the late former YouTube CEO Susan Wojcicki and 23andMe founder Anne Wojcicki). Esther was once Minno’s high school journalism teacher, and the two have remained close ever since. The two spoke about how to increase innovation in the health sector and about how academics — often the ones with lots of research — struggle to get startup ideas off the ground.
The problem is that they don’t really know how to tell a good story, at least not in the way venture investors like to hear, and they also don’t know how to commercialize their research well, Minno said. She and Esther wanted to build a program that would team operators with academic-focused founders, “similar to the way a venture would in order to teach them the art of building a business.”
In addition to launching the Treehub residency, for which founders must apply, Minno and Esther decided to team up with members of the biomedical data science department at Stanford to launch the AI Health Fund, writing early checks (ranging from $50,000 to $150,000) to companies coming from academic circles. The fund intends to raise $10 million and made its first close last year at $1.5 million, Minno said. They raised $500,000 from family and friends, then received a $1 million check from billionaire VC Tim Draper.
Anne Wojcicki has joined as an operating partner, while Esther serves as founding adviser. The Stanford team includes Roxana Daneshjou, an assistant professor of biomedical data science and dermatology at Stanford Medicine; Minno’s father, Derek, who is president of the VC firm Point Capital; and Alexander Ioannidis, an assistant professor of biomedical data science and genetics at Stanford.
The AI Health Fund is hoping to back at least 60 companies in this first iteration of the program. The fund was set up as a separate vehicle because Minno also wanted to back founders who might not go through the program or who might be second- or third-time founders without a need for the Treehub program but who still have a good idea.
With that said, the AI Fund has already backed 12 companies from the Treehub program, including the women’s hormone tracker Clair Health (which also went through a16z speedrun), and researcher Dennis Walls new company focused on pediatric autism.
Minno said the residency is still in its experimental phase as the team works out the best way to navigate the accelerator-fund approach. She said the residency program’s true value prop is that it hopes to work with founders at the earliest stage, before there is even a company.
“In more than half the cases, we introduce the founders to the lawyers that helped them incorporate, so we almost play a co-founder-like role,” she said.
“The difference between us and the other accelerators out there is we’re really helping them strategize and to get along well; when there’s a problem, we help them with problem-solving skills,” Esther said.
Minno said the Treehub residency program wants to build to support founders’ needs, such as arranging meetings they might need or whatever else is needed to help them scale their businesses. “We don’t have demo day because these companies mature at different rates,” she said.
The goal, overall, is to see how the first iteration of the residency program goes, to “understand which aspects of it can be scaled and which aspects need to stay small,” Minno continued.
“It’s really important to us that we make every company we work with successful,” she continued. “Our vision is to 10x it, so we’re starting with something very small and then our plan is, after we run this cycle a few times, hopefully do this across the country.”