Fitzsimons Innovation Community – Building a Life Sciences Pipeline: Access to Capital
By: Colorado BioScience Association Date: 04/03/2023
In Fitzsimons Innovation Community’s blog series, Building a Life Sciences Pipeline, hear how the CU Healthcare Innovation Fund provided strategic value for Arrive Health, and how they’ve been successful at raising capital to build and advance their organization in Colorado.
Finding Funding In a Changing Investment Environment
The past several years culminated into one of the most secure and vigorous periods for capital investment access, and Colorado life sciences companies were able to take full advantage. The Colorado life sciences industry has consistently raised more than a billion investment dollars annually for the past six years, topping $2 billion in 2021. (CBSA) From state grants to larger venture investments, the Colorado healthcare innovation ecosystem has been well-funded and poised for breakthroughs, and Fitzsimons Innovation Community is proud to be the home of many members of that ecosystem.
Part of what makes Fitzsimons Innovation Community a center for raising capital is our partnership with the CU Healthcare Innovation Fund. This fund is a strategic healthcare-focused venture capital firm affiliated with the University of Colorado Anschutz Medical Campus. The CU Healthcare Innovation Fund has a vast portfolio that spans from the research and development of drugs and treatments to healthcare technologies that can automate and digitize processes for patients in almost every area of care, from pregnancy to cancer.
One success story among the CU Healthcare Innovation Fund portfolio is Arrive Health, a thriving Colorado digital health company that works to make care decisions better for patients and providers—improving affordability, access, and outcomes—all while reducing administrative burden. The Arrive Health CEO and Board of Directors member, Kyle Kiser, recently spoke with us about their fundraising journey and how a continuing partnership with the Fund and the University itself has helped Arrive pave the way to success.
Having been through multiple rounds of investment in his company, from both angel investors and the CU Healthcare Innovation Fund, plus other grants and investments, Kiser gave insight that could be extremely valuable to companies seeking access to capital in the near future, even as the investment environment is changing. “Initially we were seeking investment just to get the company off the ground, to keep the lights on. But from the start, we made a point to find investors who brought strategic value to our company, whether it be a book of business or a capability for mentorship. We weren’t just looking for money for money’s sake.” Kiser explained.
The CU Healthcare Innovation Fund was an investor that proved to hold that strategic value-add for Arrive Health. In fact, while it has been many years since the fund initially invested, fund partners still hold positions on the Arrive Health board today. “From the start, the CU Healthcare Innovation Fund has been strategically valuable in multiple ways for us. First, they’ve been there before and have the entrepreneurial experience that allowed them to be a resource and a mentor to us, and in many ways they represented the voice of our customer and user. I can’t overstate how important that insight and mentorship has been to the growth of our company.” Kiser says.
In addition, he explains that the partnership with CU created awareness of other potential investors, leading Arrive Health to pursue and receive the Advanced Industries grant from the Colorado Office of Economic Development and International Trade.
So, what advice does Kiser have for life sciences companies who are seeking investors today? As the interest rate environment has changed dramatically and quickly over the past year, so has the availability of capital investment dollars. But he gives a very Colorado-esque analogy for how things will work in this new environment:
“For the last 20 years, we’ve been in an effective zero interest rate environment, which meant there was so much capital available. Recently those funds have become constrained, so supply is scarcer than it’s been in a long time. For mountain people, we can look at capital kind of like snowpack. There are 300 billion investment dollars that are still there, but they’re hanging high in the mountains, frozen beneath the new interest rates and market fluctuations. Just like snowpack, it’s going to melt a little and flow downhill, but it’s going to flow to the path of least resistance, toward the organizations that are demonstrating a clear path to profitability in the near term, to those companies that show strong business fundamentals, and to those that have a unique or scarce asset or intellectual property.” Kiser stresses that the opportunity is still there, even amidst these new obstacles. The CU Healthcare Innovation Fund backs up that claim as they continue to partner with and invest in companies with solutions that can change the future of healthcare. For the right ideas and initiatives, the investment dollars are still there—even when the snowpack is thawing a little slower than before.