What is Lemhi’s investment focus?
How does Lemhi make its investment decisions?
How does Lemhi decide how much to invest?
How much does Lemhi invest?
Does Lemhi need to be the lead investor?
Does Lemhi require a board seat in order to invest?
What is Lemhi’s investment focus?
Lemhi Ventures’ focus is on disruptive business models with the potential to transform healthcare. That’s a mouthful. What it means is that we are looking for companies that use market tools to give the consumer more control over how he or she purchases health. It is a little ironic that using the tools of the free market to transform a vital industry sounds subversive, but that is what we want to accomplish. We believe that the businesses that successfully marketize healthcare will do good (improve health and well-being) and will do well (provide substantial investment returns).
We are tightly focused on healthcare services, because that is the segment of the industry we know well, and we believe it is an area with enormous potential. Within this segment we are willing to consider companies at any stage of the development cycle, but our preference is for an earlier investment, rather than later. We are structured to support extensive incubation, as well as to make investments in proven business models poised for accelerated growth and market penetration.
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How does Lemhi make its investment decisions?
The first question is about the idea behind your business: how big is the change you want to create? Lemhi is interested is investing in transformative business ideas and business models.
The second question is: do you know what you are doing? This is partly literal – do you have a track record that demonstrates the necessary skills and experience? – and partly figurative – do you have the imagination to understand the long-term complexities of attracting capital and building a business? And if there are gaps in knowledge and experience, do you have the confidence to work closely with us as your partners?
If we feel comfortable with these issues, we’ll do the due diligence to support an investment decision. The Lemhi team has deep experience starting, funding, operating and exiting businesses. We lend all of these skills and the benefit of our accumulated experience to each of the companies in which we invest.
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How do you decide how much to invest?
This is one area in which we differ from other venture capital firms. Our investment will depend on what is required to get your business to market and what it will take to bring it to scale, not solely on a capitalization formula or an exit multiple. We expect to work with you to balance investment risk with long-term reward. The benefit of investing with a point of view is that we also pay attention to the leveraging effects of having investments in companies that operate in complementary areas of healthcare services.
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How much do you invest?
How much does your business require, and what will the investment produce? In practical terms, our smallest investment to date is around $1 million in seed capital. Our largest commitment is approximately $12 million. Since we are generally interested in identifying or incubating promising business ideas from a very early stage, the dollars invested or allocated will generally be in the low millions. But the guiding principle is to invest the funds and the expertise that a promising business requires.
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Does Lemhi need to be the lead investor?
Yes. We are structured to invest early and are comfortable being the first risk-taker. That said, we also play well with others.
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Does Lemhi require a board seat in order to invest?
Always. We fully embrace the fiduciary and the governance responsibilities of a board seat. But we also know that the board of a young company is a tremendous asset in helping establish and grow the business. We enjoy working closely with the management teams of the companies in which we invest.
