Marcus Whitney

AGAINST the backdrop of current U.S. politico-economic and judicial tensions, Jumpstart Health Investors' Jumpstart Nova Fund II LP sallied-forth last week, making its initial filing with the SEC, showing a targeted $100MM fund raise and $15.5MM closed.

There's a timely pivot at the center: Nova Fund II -- with 13 investors aboard as-of Nov. 13 -- is chartered as an institutional, strategic healthcare seed fund, with -- unlike with predecessor Fund I -- managers who are accorded neither mandate nor liberty to undertake programmatic consideration of diversity, equity, inclusiveness and other nonpecuniary factors that could impact the risk or value of contracted investments.

Briefly interviewed by VNC, Jumpstart Nova Founder and Managing Partner Marcus Whitney, 47, confirmed Fund II's out-of-the-gate institutional focus.

The managers seek via Nova Fund II:

• Leadership: Exceptional founders in C-level position with a board seat
• Sectors: Health IT, Digital Health, Tech-enabled Services, Consumer Health and Wellness, and Medicaid Services
• Stage: Seed & Series A
• Check size: $250,0000 to $4,000,000
• Lead: Yes, not always
• Board seat: Yes, if JS Nova leads
• Location: US-based and -focused companies

Whitney also confirmed cessation of Fund I investments in new portfolio companies. Fund I has about 90 investment partners and was chartered expressly to invest in the best Black-led health care businesses.

Fund I was, as Whitney has previously described it, born "in 2020 in the wake of America's racial reckoning."

Interviewed for this story, Whitney explained that by October 2023, as pandemic, political, and after-market forces buffeted the venture and M&A sectors, Jumpstart Nova Fund I had stopped adding to its portfolio and had begun applying remaining funds to extend runways among its existing portfolio companies.

At roughly the same time, Jumpstart partners began to sense that waves of litigation by conservative critics of DEI-linked investment seemed to be mounting.

By 3Q this year, Bloomberg reported on VC firms being "caught in the middle of DEI legal fights."

Among myriad other examples, Reuters reported on the chill among Diversity funds. More recently, D.C.-based attorneys with Venable captured the tone of the era in this column, not about venture, but about grant-making.

Taking stock of the situation, the Jumpstart Health Investors management team agreed that recent litigation could be only the bow wave of "one of the largest changes in federal law in our lifetimes," continually threatening to undermine the premise of Fund I.

"Our goal is to build an institution, not to continually fend-off lawsuits," Whitney told VNC. He added that Jumpstart aims to have increasingly more institutions and strategics as LPs in its funds.

At birth, Fund I was widely hailed, as indicated by this AHA coverage, VNC coverage, and beyond.

Today, in addition to JS portfolio assets, Fund I's database of Black founder-led companies stands at roughly 400, representing an important cross-section of health care ventures.

Overall, there are 11 portfolio companies showing today on the Jumpstart Nova site. Whitney has credited much of Fund I's performance to the 2021 addition of Los Angeles-based General Partner Kathryne Cooper MBA.

The Jumpstart family of firms and funds was created in the form of Jumpstart Foundry in 2014-15 by Vic Gatto and Whitney.

Whitney said Jumpstart Nova's portfolio holdings have been significantly de-stressed, and prospects for future realizations are attractive, though the portfolio is in growth mode, rather than pushing toward exits.

Whitney confirmed that Jumpstart Nova outside advisors include Holland & Knight attorney Roddy Bailey. Also advising are accountants with PwC and bankers with Pinnacle Financial Partners. VNC

.last edited 0706 19 November 2024