Venture Capital Challenges

Astarte Medical founders (from left to right) Tracy Warren, Katherine Gregory, RN, PhD, and Tammi Jantzen (Astarte Medical) Three women — a Columbia MBA grad, a Harvard Medical School professor and a chief financial officer — walked into the pitch meeting in Boston with high hopes. Their goal was to draw a group of angel investors to their new healthcare startup, a software platform that would help save babies’ lives. Instead, on that day in March 2017, they were pelted with questions that smacked of sexism. “Halfway through our pitch, a guy raised his hand and said, ‘Do you have any men on your team?’” recalled Tammi Jantzen, the CFO. “I think now: ‘Wow, I’m glad we didn’t take their money.’” Jantzen, along with her longtime business and investment partner Tracy Warren, and scientist and nurse Katherine Gregory, started Astarte Medical, a precision medicine company that uses predictive analytics to improve health outcomes for preterm infants. They are based in Yardley, Pennsylvania. Their flagship platform, dubbed NICUtrition, is a suite of tech tools designed to help hospitals carry out feeding protocols and make more informed decisions in neonatal intensive care units (NICUs). They hope to reduce infants’ NICU stays by nearly 30 percent. “We’re working for babies,” said Jantzen. “I can’t imagine anything that is more rewarding than that.” Supporting ‘Million-Dollar Babies’ The platform automates feeding protocols and amasses quantitative data about preterm babies’ gut health to deliver accurate, customized care, so that doctors and nurses don’t have to spend time manually tracking information and inputting data. “Our software takes in guidelines and digitizes it for the clinical team at the bedside in the form of a feeding schedule,” Jantzen said. More than 380,000 babies in the United States are born preterm annually. According to the Centers for Disease Control and Prevention, in 2018, 1 in 10 babies was born too early (before 37 weeks of pregnancy) — and those are the ones the founders hope they reach. They are piloting the platform at a “well-known hospital” on the West Coast, and doing demos for other hospitals around the country. They have also secured $8.5 million against large odds. “It’s definitely an underserved patient population, especially when it comes to innovation,” Jantzen said. “A lot of investors automatically assume it’s a small market because there aren’t that many babies , but these babies are one of the most expensive patients in a hospital. These are the million-dollar babies.” Finding the Funds Raising their Series A funding was one of the major challenges. But in May 2019, after pouring more than $1 million of their own money into the company and graduating from the Illumina Accelerator in the San Francisco Bay Area, Janzten and Warren were able to secure $5 million from investors. Those included Lunsford Capital, Ben Franklin Technology Partners, Wing VC, Viking Global Investors LP and Next Act Fund. Even though Janzten and Warren both have 20 years together in venture capital, they still had a lot to learn about investing in a new field. “Most investors will invest in software companies, and others will invest in diagnostic companies, but we were a little of both,” said Jantzen. “So it was hard for traditional VCs to understand exactly what we were trying to do.” When they decided to go the angel investing route, it turned out to be a painfully slow process. The groups only met once a month, so the founders had to chase down each investor separately and try to woo them. One was the Boston group who questioned whether they had any men on their team. “There were a couple of angel groups we spent too much time with,” Jantzen said. “The biggest lesson we learned was listen to your gut. If the person across the table from you is someone you don’t want to work with for the next 10 years, then you need to walk away.” Launching the Product Looking ahead, the company has received interest from other hospitals to pilot the program, and the founders are taking their product on the road. “It makes me slightly nervous, like ‘Oh my god, are we ready to take on all these new clients?’” Jantzen said. “That wouldn’t be a bad problem to have.” The company has enough money to last into 2021, which has enabled them to hire a vice president of sales as well as one of operations. Jantzen and Warren are looking to close on their next round of financing by the end of this year. They also hope to hire more staffers to help them focus on leading. “I think there’s going to be more of a strategy we have to work on, and bring in other people to do all the tactical stuff,” said Jantzen. But while launching was difficult, and “there were definitely times the company was living on fumes,” Jantzen said, it’s all been worth it. She advises aspiring entrepreneurs to stick with their ideas. “It may sound simple, but just don’t give up,” she said.

Venture Capital Challenges

Against the Odds, 3 Women Launched a Medical Startup to Help ‘Million-Dollar’ Preterm Babies

The Story Exchange

Venture Capital Challenges

Against the Odds, 3 Women Launched a Medical Startup to Help ‘Million-Dollar’ Preterm Babies

The Story Exchange

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