📶 General Catalyst is buying a healthcare system?

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Clay here. I’ve gone DEEP creating lead magnets over the past week or two.

We’ve started using these for advertising and intent-based marketing, but it also feels good to give away some of your best resources for free. Check out some of the lead magnets at the bottom of this email, and let us know if there is anything else we should create.

If you think I’m right, wrong, way wrong on any of the stories this week, let me know in the comment section.

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NEWS
General Catalyst buys a healthcare system 🚑

Last week, General Catalyst announced it was launching a new initiative: it is buying a healthcare system. This will be an incubated company named Health Assurance Transformation Corp.

The fund has been quiet on the new project (aside from this blog post), but we did some digging to get our take on it.

Why it matters: We like it when venture capital funds think outside of the box, and this move is definitely an example of that.

Here are the five pillars of the mission statement of this project along with our thoughts.

• Stakeholder alignment: The current healthcare system does not align incentives between providers, patients, and financial entities. The goal of this initiative is to create a value-based care model that will improve outcomes and offer better incentivizes for each player in the healthcare system. This is a bold goal and one that others have had before. We will have to wait and see what the implementation plan is before we can give our opinion.

• Long-term investment vision: Healthcare transformation is a long-term endeavor, and in order for real change to happen, you need a different time horizon that the standard venture investment period of ten years. Given the historical performance and brand that General Catalyst has built, you would assume that their team has an evergreen capital supply to support this project over the long haul.

• Innovation > cost-cutting: Most healthcare initiatives revolve around ways to create cost savings. That’s great and all (there’s PLENTY of room to cut spending), but making money is more interesting than saving it. This new company plans to unlock new revenue streams for health systems, enabling them to invest in innovation and better serve their communities.

• Radical collaboration: The new company plans to work closely with over 20 healthcare system partners, sharing best practices and technologies to scale effective solutions. General Catalyst has already been a significant player in the healthcare space having raised over $1 billion over the past three years to invest into healthcare companies. For anybody that has studied bundling and unbundling, you can start to predict what will happen next (more on that below).

• Value-based care: Incentives run the world, and value-based care is the only option that makes sense especially for patients. Their team believes this will improve the overall healthcare experience over time.

What happens next: It’s too early to form an opinion on this initiative, but we’re not here to make predictions about that.

The more interesting angle of all of this? The bundling piece.

General Catalyst has spent the past three years raising and deploying ~$1 billion into healthcare startups. Now the fund is formalizing a system for all of those companies to work and become reliant on one another.

Will it work? Who knows.

Is it an impressive long-term strategy that we expect other well-capped funds to follow? Absolutely.

LINKS

🐎 Trojan Horses to Avoid: Seven things to avoid to stay ahead

💰 Thoughts on Money: 11 thoughts to help you see money for what it is

🤑 Turn Subscribers to Customers: Eight ways to turn emails into $$$

🤷‍♂️ What Do VCs Do?: Deep dive on how things have changed over the past 40 years in VC

🧠 Scaling an Email to 100k: Hard-earned advice from The Generalist

👉 14 Lessons from Bob Kagle: Legendary advice from the ex-Benchmark GP

➡️ 15 Lessons from Brian Singerman: Timeless advice from the partner at Founders Fund

COMMUNITY
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Sooo … what are you waiting for?

TWEET

This chart is only going to continue going one direction. Tik Tok brain is real.

If you’re able to focus for even relatively long periods of time, you have a HUGE advantage over the masses.

MEMBER
Kyle Ritter (Investor @ NextEra Energy)

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- Clay and Tyler

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