Deep Dive: How to Secure Venture Capital Dollars with Dr. Kenneth Alleyne

Sports medicine orthopedic surgeon Dr. Kenneth Alleyne returns to give us a deep dive into entrepreneurship. He shares the importance of having a business mindset and how his company raised $160 million on venture capital.

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Learn more about Dr. Kenneth's services at eosm.net. 

ICYMI: Dr. Kenneth's first podcast on investing in health - you can listen to it on episode 1.

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Episode Transcript

Speaker 1 (00:01):
Hey Money Movers, Welcome back to the Money Moves Podcast
powered by Greenwood. We are here once again to give
you the keys to the financial kingdom of wealth, abundance
and success. Today's steep dive into entrepreneurship and our community

(00:22):
is brought to you by our partners at MasterCard bridging
the wealth Gap together with Freedwood. Hey Money Movers, Welcome
back our expert guest, Dr Ken of the podcast. Dr
Ken Allen is the founder and managing partner of heart
Haven Partners and has over twenty years experience consulting to
investment firms in the public and private markets. He is

(00:44):
also a board certified sports medicine orthopedic surgeon. Dr Ken,
thank you so much for joining us today. You know,
there's this misnomer in the medical field that doctors just
want to practice medicine and they are not business people.
So you are exactly the opposite of that. And I
will say this because my dad is a retired O
be going as well. How have you made the move

(01:05):
from going from practicing medicine to investing and really being
a true businessman. I tell people that's the Caribbean in me, right,
So you know you can't just have one job, right,
so I had to figure out what my other jobs
would But really, UM, there were a couple of motivations. One,
I wanted to push back on the notion that physicians

(01:27):
could not be businessmen at a high Two, I enjoy medicine.
I think differentially than many of my colleagues, and that's
because of the relative freedom that having the other stream
of income allows for me to enjoy the practice of medicine. Right,

(01:49):
meaning UM, I practiced by myself and not in a
large group. I don't work for a hospital, and one
of the things that allows me to do that is
these other businesses. Right, I can see people irrespective of
the ability to pay. I mean, obviously I want to
be paid for my work, but it's not to be
all end all because I also know that my partners
and not just closed a hundred and sixty million dollar

(02:10):
investment in our new company, right Medicare Advantage Plan UM.
We consult to some of the largest private equity and
venture capital firms in the world on healthcare. So having
you know these opportunities to be able to think about
healthcare in a different way and a holistic way, but
also understand the importance of business has kind of worked

(02:32):
out for us. Wow, that's incredible. So, Dr Ken, you
just made everyone's mouth drop because you mentioned you just
received a hundred and sixty million dollar investment into a
company that you and your partners just founded. Can you
rewind and tell us a little bit more about that. Absolutely.
Over the last several years, my partners, who also happen
to be my best friend and also a physician, Dr

(02:55):
Eric Whittaker, he and I have had an opportunity to
invest in several companies surrounding healthcare. But interestingly, our thesis
has always been surrounding doing well and doing good. How
can we improve the level of care in the community,
particularly black and brown communities, right improve the level of
care while at the same time generating returns for our

(03:15):
investors in ourselves and hopefully creating intergenerational wealth for our families.
With this latest company, we decided to to really strike
into a very difficult area to break into, and that's
Medicare at Anti, which essentially is creating an insurance plan
for seniors. We previously had a Medicaid plan in Cook County, Illinois,

(03:37):
which we sold to a fortune Congratulations below Black Wealth
and Excellence and we decided a couple of years ago,
under aaric's leaders so to really take on this medicare
advantage space. We had no experience in this space. We
didn't know what we were doing in the space, but
it felt right, It felt like an opportunity. We had

(03:57):
a thesis that if we could leverage the best of
technology into communities where technology generally is not leveraged, not
only could we raise the level of care, but also
raised the level of profit that we'd be able to
take take home at the end of the day and
returns for our investors. And so we set about trying
to sell this idea and UH, random conversation interesting. In

(04:22):
a random conversation, Eric and I every summer we are
families vacation together in Martha's Vineyard for most of August,
and we were at the yard of a friend and
it's home talking about this idea. The person next to
Eric asked, really, I'm kind of interested in that. Can
I hear more? He kind of explained what he was doing.

(04:45):
They explained that they were venture capitalists and they would
love to have him come out and present this idea
at their firm in California. I wasn't able to make
that trip for some reason, so he went out. They
liked it and decided to invest, and that's how we
got our initial seed investment. Right after that, the American
Medical Association, the largest organization for physicians in the United States.

(05:09):
They've had a tremendous interest in physician innovation and physician
investors hasn't happened. They also have an interest in doctors
thinking about businesses that can allow doctors to work more efficiently.
So they liked it we were doing and they came
on board. And lastly, a very interesting time called Village Global,

(05:29):
which is the money of Mark Zuckerberg, Bill Gates, Steve
Case founder of A. O. L. Travis but I can't
remember his name, the founder of Uber, the founder of Google.
They also have a fund and they invested as well.
So those were our seed partners, and those are some
big names. There were some big names, but they understood

(05:51):
what they bought into what we were trying to do,
and with that we started the business. Um it was
a tough go because the next tranche of capital that
we needed are the sorts of numbers that African American
investors don't get in a series reset I think we
probably if if we're not the largest, certainly in the

(06:12):
top two or maybe three series days for black founders
in the United States. Sixty million bucks and it it was.
It was close, but we we kept plugging away and
a group called you like capital like our thesis like
we were about uh and they committed the hundred and
sixty million dollars, which we've now built out a company

(06:32):
that is seventy people of color in terms of our
management and our employees. We're in three states, focus largely
on communities of color, creating partnerships. We just closed an
acquisition a press release yesterday, so we're gonna be expanding
a portion of the business to thirty states over the

(06:52):
next few months. I mean, these are incredible money moves.
Can you give us some of the pitfalls that you
came upon along the way, because I'm sure there had
to be some, Oh absolutely absolutely. First of all, you know, again,
when you start talking about those sort of numbers and
you look like my partner and I, you know, obviously
it comes with a lot of questions, Right, are you

(07:12):
guys ready for prime time? Can you scale scale the business?
Can you develop the sort of vision that investors are
going to buy into because the folks who put in
the one sixty want to make sure that you're building
something that someone may want to put another two fifty six.
And if you're not, their capital um is poorly invested. Uh,
you know, and this has really been a testament to

(07:33):
my partner and who's the CEO of the company, Eric Whittaker. Um,
you know, we knew and one of the things you
learned about in medicine is how to consult. If there's
something that I don't do, I reach out to consultants.
I reach out to people who have expertise. And so
we have been able to dig into our rolodex rely

(07:54):
upon some of the experience that we had to make
sure that we've put around us people that could but
give us the knowledge and information that we needed and
also to lend us their imper moter, lend us a
little bit of their shine, to to make our walk
seem a little bit more legitimate to people who might
who might question us. Now, you know, it's interesting. I

(08:16):
share a foundation. It's about a hundred and fifty million
dollar foundation, and we have been UM very much focused
on diversifying the asset managers that manage the foundation spots.
You know, in the United States there are trillions of
dollars of money managed and less than one percent of
its managed by people of color. And that is fact

(08:36):
the reality. And in explaining to my board why this
should happen, um and why that there's no concession in
investing with black and brown people. But you're not. You're not.
We're not expecting less returns, We're not expecting to have
less responsible investments. I said, you know one of the
reasons why, because when you look like us, you have

(08:59):
to be at one all the time. You know how
many white meals have blown up multibillion dollar hedge funds
and live again to raise another multi billion dollar hedge fund.
Try being African Americans. It wouldn't. It doesn't happen. It
doesn't happen absolutely. You know, you were one of these
gold standards that has received a lot of venture capital
funding and investments. Can you talk a little bit more

(09:21):
about the difference between venture backed businesses and this notion
in the black community that people are just building smaller,
more bite sized lifestyle businesses. Because I want to erase
this belief that we should just stay in our lane
and build these lifestyle businesses. Yeah, you know. Um, there
is raising and creating a business and then creating an

(09:44):
investable business, which are two different things. Yes, so many
of us have businesses, some big, some small, but all
are not investable, some big, some small. Eric and I,
you know, we really push black businesses to become investable businesses,
even if you don't take in that capital. Why because

(10:05):
that's a business that often can transcend the founder. That's
a business that can often be sold to generate wealth
for your family, loved ones and the um entities that
you care about. That's a business that can often be
transferred to another generation or or another family member. And
that again is about building the sort of infrastructure that

(10:30):
lends itself to investment, the sort of accounting infrastructure, the
sort of bookkeeping infrastructure, the sort of marketing infrastructure, the
sort of leadership infrastructure, the sort of hiring infrastructure. Now,
and when that someone came to me with a company
recently that they wanted a personal investment for me, and
and I encourage folks in the community to make those

(10:53):
sorts of investments. But it has to be investment like
VC venture capital, even for an angel investor. It's not
about philanthropy. It's actually about how I can get my
money back at a ten sale. So your idea that
you present to me, yeah, has to improve without question
that you're going to deliver a return on that investment
check that's ten x like. It's not philanthropy. It's really

(11:17):
about And this is where the capitalism part of venture
capital comes in. And so that's why I tell people
you can't be mad when people say no, you just
have to come back and get better absolutely and let
me um uh you know. Highlight this concept of consultants
I'm talking because a lot of times new businesses don't
have money to hire people. I'm talking about thinking about
your rodens, speaking about the role index of your friends,

(11:40):
for people that you can bring around you, one who
can give you valiable knowledge, and often they'll give it
to you for free or very an expense, for maybe
equity or for something in the business. And too they
lend you their stature for a legitimacy in the world.
I can tell you so many times, particularly in the
businesses that we started, it was just people that I

(12:03):
knew were friends of friends who said, you know what,
I'm not going to write you a check, young blood.
But I'm gonna stand here and you can tell people
that I like what you're doing. Yes, and that's invaluable
number of doors that that that's open. Yeah, And you
know it also caution people because you know, I get
really excited about having these conversations and talking more about it.
Like those early people that you are your advisors, lean

(12:24):
on them. You know, you might give away a couple
of equity points, but you make sure that if you're
building a company that's in healthcare or medicaid, that you've
got someone who has detailed years of experience that can
help you avoid pitfalls, that knows that industry that they're
superpower that they're adding to build your business is you know,
from years of education and knowledge like that's invaluable. Absolutely,

(12:47):
And I tell I tell a young entrepreneurs all the time. Listen,
you've got to decide you can have a percent of
a great or of a water mill. I'm telling you
it's about the pie. You can give a little sliver
of a tiny piece of pole rod. You can hold
out to all that equity and sit by yourself talking
about what could be. Yeah, where you can give up
some points, bring some people around you and actually grow

(13:09):
up business right. Oh my gosh, Dr Ken, it is
so great speaking with you. Thank you. You've offered such
a wealth of knowledge from so many different topics, healthcare
to investing, to startups and entrepreneurship. Thank you so much,
and I hope we'll have you back again. I hope
salads was fine. Thank you, Thank you so much, and
we wish you all the best. Okay, money Movers, you heard,

(13:30):
Dr Ken. We have to make sure we are keeping
things on point when it comes not only to our
pockets entrepreneurship, but also our bodies. Thank you so much
for tuning in Money Moves audience. If you want more
or a recap of this episode, please visit the Bank
Greenwood dot com website and check out our blog there.
Stay tuned tomorrow and every day this week from a

(13:53):
very special money Versus News. So we have a friendship
turned business partnership that seems to be souring. I hear
this kind of stuff all the time, and a celebrity
guest you won't want to miss the one, the only,
the indomitable Carol Owens. The agent that I'm in eurosen House,
just rosen House Schools. They based route me over Gosh,

(14:15):
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