ANN ARBOR — The Social Venture Fund, a student-run venture capital fund at the University of Michgian, said it had participated in the Series B convertible note financing round for San Rafael, Calif.-based Conversa Health, a company developing software ot foster communications between hospitals and patients.
The Social Venture Fund invests in for-profit companies that place social and environmental impact at the heart of their business models. It’s managed by about 40 master’s and bachelor’s degree students in business administration, many of whom are pursuing dual-degrees with education, environment, health, law and public policy, along with faculty advisor Uday Rajan, the chair of the finance department at UM’s Ross School of Business.
The fund has seven active investments and focuses on health care, education, food systems, and environment and urban revitalization.
In addition to the investments it makes, the Social Venture Fund conducts consulting projects for its portfolio companies, from market and pricing analyses to financial models and pitch materials to support companies’ future business development and fundraising needs.
“Investing in companies with a purpose is an increasingly important mandate both for our students and for the investing world as a whole,” said Stewart Thornhill, executive director of UM’s Zell Lurie Institute for Entrepreneurial Studies. “The Social Venture Fund has done a great job choosing a company that has good prospects for a strong exit as well as the potential to change the way our health care system interfaces with patients for the better.”
Conversa Health aims to improve patient engagement, adherence, and health outcomes through software that provides hospital systems with an automated way to bridge the gap in communication that occurs between visits.
Conversa’s main product, “Digital Checkups,” uses algorithms to generate personalized clinical questions, patient education, reminders and alerts triggered by a profile of each patient, including data from electronic health records, biometric monitoring devices and other health cata derived from online responses.
This information is analyzed and fed back into the EHR and other care management systems to alert the care team about patients that are in need of guidance, support and intervention.
A team of seven students, led by Christine Priori, MBA/MPH ’17, sourced the deal and conducted due diligence on the company. The Fund’s rigorous deal sourcing process began with screening nearly 160 companies that submitted applications and narrowing the pool to five companies that would undergo the three-month due diligence process.
For Conversa, this process included analyzing the company’s management team, its product’s effectiveness and market potential, its financials and revenue model and its potential to create positive social impact. The team interviewed numerous industry experts, including leaders in patient engagement, the fund’s health care advisors, and key thought leaders and purchasers at large hospital systems.
The team determined Conversa would be a strong investment for the Fund due to the company’s potential to enhance the way health care is provided.
“We believe in the product’s ability to improve patient adherence, serve as a conduit to foster communication between patients and their doctors and ultimately improve patients’ health outcomes,” said Logan Pitts, BBA ’16, a member of the due diligence team. “We also have great confidence in the caliber and experience of the entire management team and the company’s traction with thought-leading providers and health IT distributors. Finally, the management team’s deep-seated interest in developing a continued, working relationship with the Social Venture Fund is a very important factor in arriving to our decision.”
More about the fund at http://www.umsocialventure.com. UM’s Ross School of Business has four student-led investment funds with more than $7 million under management.
More about Conversa Health at http://www.conversahealth.com.