Lemhi was purpose-built to find and fund health care service companies. We do things differently than other venture capital firms. We start with questions that help us identify fundamental problems in health care, and we use our own research and experience to create hypotheses about how to solve those problems. The team has an insatiable curiosity that drives our exploration of new ideas.
Our fundamental hypothesis is that consumers will drive change in health care. We’ve been at this for ten years and it hasn’t happened at the pace we expected. Through our investments we’ve learned to recognize and take advantage of the business-to-business frameworks that exist in health care services. Changing the market dynamics that drive both consumer and business decisions will take a long time. No matter what happens at the national policy level, the day to day delivery of health care does not change easily or quickly. Our companies are selling their innovations into a market with very long buying cycles. For the leaders of our portfolio companies, that’s incredibly frustrating. For us as investors, it is a reality we’re structured to handle. We are ready to fund the first inch all the way to the last mile.
We’ve also learned that not everything is disruptable. Sometimes – especially in health care – we need discipline and stability. That doesn’t mean no change. It simply means that there are good investments to make in simply making the systems work smarter and better. As we’ve gotten involved in partnerships with other investors, we find that they value the way we work with our companies. Prior to investing, the depth of our diligence takes us to a level of understanding of the business that other VCs don’t often reach. We go into the field as part of discovery, well before we get to the investment questions. We use data, not wishes and wants, to define opportunity and measure progress. Once invested, we get our hands dirtier than most VCs are willing to. It’s one of the benefits of being tightly focused on health care services.
The fundamentals of venture capital always have to hold for us to make an investment. But before we get to the terms of a deal, we first have to believe in the premise of the business. Does it get to the heart of a problem worth solving? If we get that right, everything else will follow. Tony Miller began his career at UnitedHealth Group. He joined Deloitte Consulting, focusing on strategic business development, mergers and acquisitions, and performance turnarounds in the managed care industry.