E1: Interview with Vanessa Villaverde
Welcome to the OVERcast, the official podcast for OVERLAB.
“OVERLAB has been a labor of love for many people.”
Summary
Host David S. Williams III and Vanessa Villaverde reveal the backstory and vision for OVERLAB, a program aimed at supporting healthcare entrepreneurs and building a sustainable ecosystem for healthcare innovation. Key points include:
OVERLAB is a virtual accelerator and innovation hub helping entrepreneurs overcome obstacles in starting and growing healthcare businesses. It was co-founded by Vanessa Villaverde and David S. Williams III.
Vanessa Villaverde recognized the need for OVERLAB after seeing many founders with great ideas struggle with building sustainable revenue models and business operations, especially those from underrepresented communities.
OVERLAB is being launched with the support of the California Healthcare Foundation and is based at UCLA, leveraging the university's expertise in digital health and entrepreneurship programs.
Vanessa Villaverde has transitioned to founding Sparrow Fund, an early-stage investment fund backing health and care solutions with real revenue plans and social impact.
Key challenges for founders today include navigating rapid market changes, building resilience, and having less room to iterate without risking patient outcomes. Founders with lived experience can have a competitive advantage by deeply understanding their target customers.
For investors, key challenges include finding the right diverse and values-aligned capital to support underrepresented founders. Building global networks and leveraging demographic shifts are strategies to build resilient companies.
The vision for the future is one where underinvested founders are setting the agenda, with patient capital, data reflecting real people, and networks that provide sponsorship - not just inclusion. Spaces like OVERLAB can be launchpads for new norms of doing business where values scale as fast as revenue.
Transcript (AI automated)
Vanessa Villaverde (00:04):
OVERLAB has been a labor of love for a lot of people.
David S. Williams III (00:12):
Welcome to the OVERcast, the official podcast of OVERLAB. OVERLAB is the only virtual accelerator and innovation hub helping entrepreneurs overcome the obstacles in starting and growing a business in healthcare. My name is David S. Williams ii. I'm a three-time digital health entrepreneur with two exits, and I've been a digital health entrepreneur since the mid two thousands helping more than three and a half million people use data and technology for better health care and outcomes. the OVERcast exists so you can build a company of your dreams serving the people you care for and about the most. It's fitting that our first guest on the OVERcast is the woman who made it all happen. Vanessa Verde is a national leader at the intersection of policy, venture and power building. Vanessa brings a unique perspective. Her philanthropy, venture capital and policy expertise is grounded in community advocacy and driven by lived experience. And with that, it is my pleasure to welcome Vanessa Verde to the premier episode of the OVERcast. Vanessa, welcome to the OVERcast.
Vanessa Villaverde (01:44):
Thank you. I'm so excited to be here. I'm thrilled that this day is finally here.
David S. Williams III (01:48):
You and I have been talking about this for a couple of years.
Vanessa Villaverde (01:52):
Yeah, thank you for bringing that up. First of all, I'm thrilled, David, that you have taken the lead in making this a reality. I think so often great ideas don't make it out of the room into reality. And here we are.
David S. Williams III (02:05):
Thank you, Vanessa. As the co-founders of overlap, we both thought it was important to bring it to life. So let's travel back in time. Can you share your aha moment when you recognized something like what has become overlap needed to exist?
Vanessa Villaverde (02:24):
As you know, for many years I had a traveling accelerator that was working with different that ecosystem leaders across the country. And these accelerators were very helpful in helping organizations or helping new founders prepare for the pitch but not necessarily prepare for what's after the pitch, meaning how to run particularly a healthcare company, which as you know is one of the most complex, difficult types of technology based companies to run. And so at one of these events, I'm sitting across a brilliant founder. She had a perfect product that could change the way frontline workers access mental health support and even help their burnout. But when I asked her how she made money, she gave this kind of hopeful smile and she said, we're still figuring that part out. And it hit me. We've created an ecosystem where passion is everywhere, but the scaffolding for financial sustainability, not so much overlap, was born to close that gap, not just to teach people how to pitch or how to raise money, but to help them build real revenue muscles early on, especially founders who don't come from networks where those conversations are casual one and secondarily don't come from communities that can break down the different revenue strategies across the different markets in healthcare, which as you know, is only getting more volatile.
David S. Williams III (03:55):
Absolutely. At the time you were at California Healthcare Foundation in their innovation fund, and I do want to recognize CHCF as they are the main sponsor for overlap and the OVERcast. Thank you CHCF for your support. Now, Vanessa, can you tell us what happened behind the scenes to make overlap a reality?
Vanessa Villaverde (04:20):
Yeah, I want to thank also the California Healthcare Foundation for their support of this work. And it was a pleasure of my life to be there for a couple of years and learn the way the philanthropic machine works, but particularly how it can spur innovation in new markets. So over the past few years, there has been an effort to ensure that there is equitable access, particularly to company building. I pitched an opportunity to make on demand access available through a fun multimedia way via a podcast and like all good things. This started with a no. There was a no to the initial podcast because there needed to be a more systemic way to ensure there was a center of gravity, and I'm thankful for that. No, and also it fired me up. So over the next year, I dug in to identify, well great, how can we quantifiably prove that we can generate a center of gravity for entrepreneurs who wanted to grow companies in healthcare within LA County?
(05:30)
So we looked at the data across the state. There was a project that had been started to identify how government funds could be used for the creation of ongoing support in the entrepreneur space. Just so happened that UCLA had taken its state money and created inroads within digital health that we could build off of. In other words, there was already scaffolding. The longitudinal data showed that the uc system created jobs and kept those jobs in the state of California. And so the math proved that if we built in this fertile soil something that democratized access to every business owner that wanted to build across LA County, then we had a chance of developing an ecosystem that lasted. So that's the behind the scenes of how this project happened.
David S. Williams III (06:24):
Well, if there's one thing I've learned about you over the years, you do not take no for an answer when you're on the mission. UCLA is a perfect home for overlap. I've had the pleasure of serving on the board of advisors for the Price Center for Entrepreneurship and Innovation since 2007. One of the Price center's greatest achievements has been building relationships and programs serving the LA County community focused specifically on healthcare innovation. So overlap can be the bridge, bringing much needed innovations to these LA county healthcare organizations and real revenue opportunities for the startups delivering these innovation solutions. That's a win-win for everyone.
Vanessa Villaverde (07:14):
That's fantastic. I'm thrilled and excited to see what happens over the years as you guys grow.
David S. Williams III (07:20):
I am too. I'm also excited about your journey. You left CHCF earlier this year. Can you talk about what you're doing now?
Vanessa Villaverde (07:32):
Thank you so much for asking me that. As you know, the reality is when you're creating something and you're building something new, oftentimes your head's down. So this is the first time I'm publicly talking about the work of what's next after the California Healthcare Foundation,
David S. Williams III (07:47):
Breaking news, breaking news, let's do it.
Vanessa Villaverde (07:51):
So I started my career negotiating policy inside government and then helping to build two digital startups that really taught me the difference between growth and growth that pays for itself. So I oftentimes around the country talked about the revenue roadmap, but really that was built off of information learned through the hard knocks of growing these companies. And as I moved into investing, I realized that we kept funding tech that served hospitals and health plans, but what about people that looked like me and communities that were like mine? What about the mom managing diabetes at home or the cousin working two jobs that still can't get mental healthcare? So now I'm at this stage in my life that I'm really blessed to invest in those companies, those companies that are meeting people, families like mine where they are in their streets, in the homes, in the communities.
(08:47)
So I'm building Sparrow Fund with an amazing team. We back early stage health and care solutions with real revenue plans and social impact DNA. The goal is to use AI for good. Here we have this moment in time opportunity that diagnostics can be affordable and they can be in someone's home without having multiple visits miss multiple days of work to go try to schedule time with a specialist when you can get something accessible to you at home. So that's what I'm building. I'm building an early stage fund that helps supports the kinds of solutions that my own family would need.
David S. Williams III (09:27):
Oh, that's great. Congratulations on your progress with Sparrow Fund. Consider me a disciple and evangelist of your mission. Now, from an investor's perspective, what challenges do you see for tech and healthcare services founders today?
Vanessa Villaverde (09:46):
Yeah, I think that's a big one. A loaded question. Founders are being asked to scale without enough room to build. We've always talked about the incredibly difficult market and difficult access to capital, but I think even more so in healthcare, there's less room to build because many people have never lived through the volatility of what we're living through right now. It just so happened that my graduate school thesis was about the devolution of federalism. In other words, what happens when state markets take over and there's bigger changes On top of that, we're navigating a global landscape in which supply chain costs have radically changed. And so there's pressure to look for investible companies, frankly, when they're not even operational because they're just now gaining access into the market and learning how to build within this particular market. So I think founders are obviously facing the challenge of building formidable companies that can withstand what will inevitably be more change over the next few months.
(10:57)
And so really what I am looking for and anticipating is that we can embed resilience within these companies by frankly helping them prepare to navigate some of these changes. On top of that, we've got an amazing new class of younger founders, frankly, that are more diverse and that are more knowledgeable about how to bring the solutions from their own communities out into the market. I'm thrilled. I mean, just personally speaking, I've never seen so many Latina women start companies in my lifetime before statistically, and we have this moment in time opportunity that we can empower them with information. We can empower everyone with information, but particularly communities that have never had access to entrepreneurship within their families with information about what the process actually looks like to go from small business loan to some of these alternative markets, including venture capital but not limited to scale. And so particularly for those new founders, it takes a little more time for them to build because they can't break things in the early days, move fast and break things, doesn't really work when you're a new entrepreneur and also doesn't really work when your customer is a patient in healthcare or a person who has no safety net. They have to move smart, not just fast.
David S. Williams III (12:31):
Vanessa, you have just exposed two of the great myths in startup lore. One that it's paramount to grow at all cows, and two, that it's okay to break things in the beginning. That may have been true in the mid two thousands when Facebook or LinkedIn and other hypergrowth companies were being built in the early days of the internet. But there are two truths from my experience as a founder with multiple digital health exits, two truths. One, and you mentioned this, healthcare is different from other industries because the pain points can be life and death, right? So the conventional startup wisdom does not apply. This is life and death. Two founders from underrepresented groups don't receive the grace from the industry leaders or the venture community to recover from the breaking things in the beginning.
(13:42)
Those things are perceived and treated as unacceptable errors and they're more indicative of a lack of talent rather than learnings that will lead to better execution and higher valuations later. Those two truths just show that the rules are not the same for everyone. So let's go back to embedding resilience. What you call embedding resilience into companies is the entire philosophy behind how I designed the founder curriculum for overlap. For me, I call it radical risk reduction. Identifying, prioritizing and reducing risks in the beginning is the secret to startup success in healthcare and other industries. So I'll even say it again, identifying, prioritizing and reducing risks in the beginning and in other stages as you grow. But definitely in the beginning is the secret to startup success in healthcare and other industries. So that leads me into my first and not last plug for overlap. If you aspire to build or already have a company in digital health or healthcare services or even life sciences and you want a roadmap to success, become a member of overlap, go to overlap.co to sign up. Okay. Back to our regularly scheduled programming. We've talked about risk and resilience. Vanessa, let's talk advantages. One advantage I see is when entrepreneurs have lived experience, how do you view founder lived experience? And then how have you seen that translate into valuation and or competitive advantage?
Vanessa Villaverde (15:51):
Yeah, starting with the lived experience part, statistically we've seen a great shift in who has access to business education, hence the concept of the overlap. We've also seen a great change in the face of what investors actually look like, particularly over the past few years. Now that said, I know there's a lot of market dynamics about how much of that pullback will happen now, and so how much less capital there might be in the market across the population. But honestly in healthcare over the past many years since the digital tech boom, we've continued to layer tech onto broken systems, certainly broken systems from the perspective of populations that weren't being engaged. So unfortunately, I do come from a community that has historically been an underutilized of a lot of services. And so adding tech onto it did not necessarily solve this engagement problem.
(16:52)
The concept of lived experience I think has been watered down in healthcare historically to mean somebody that looks like me. But the real wonderful match is when a business solution is able to engage a population that wasn't receiving the benefit of services at all and wasn't helping in the right language help a population know how to navigate this crazy market. People want simplicity, trust, and access. And so for those founders who are able to tap in to their community's way of gaining that simplicity, trust and access, that's step one. Now, step two in this particular market, and the way I'm looking at it as an investor is we're living in global world. And so what I am doubling down on is the way to build resilience into companies such that we empower founders who have not just the live experience, don't just come from these communities, but frankly have a way to tap into a global supply chain.
(18:02)
One example of course is rai. Luis started a company whereby he focused on solving the fact that many Spanish language speakers don't have access to mental health support in the US because of the workforce shortage. And so what did he do? He reached back into his home country. He also reached out across Latin America and took advantage of the fact that there was changing market dynamics and changing currency valuations. So suddenly he was able to be one of the most cost effective mental health technology companies in the market. This is where your margins meet your mission. It's taking advantage of the fact that we come from communities that are not scared around working internationally with people who are willing to work with us. And so this is a moment in time to do that.
David S. Williams III (18:55):
I love that your margin meets your mission. That's perfect. I know Luis and son I, well, they're going to be part of the OVERcast, so you're even breaking news on that too. So we just talked about challenges for founders. There are also challenges for investors. Can you talk about what challenges you think investors now face
Vanessa Villaverde (19:20):
For investors? Of course, as you know, this is a time where there's lots of challenges, but particularly when you're one of the first Latina LED funds in the country, of course at this particular time, there's the challenge of finding the right capital. One of my mentors continues to push me to live my values. And oftentimes when you are raising capital, that is a question around the type of money that wants to be a part of your fund and the type of partners that want to be on your journey with you. In the early days, of course, the questions that I got were largely around a thesis and largely around whether I was going to focus on Latino led companies only because I happened to be a Latina. And it was really helpful for me to broaden the perspective of population that I was working with and talking to, frankly by going global and by looking to global investors who understand that we're living in a world of demographic shifts.
(20:26)
Populations are changing. Yes, Latino populations are one of them, but also the way consumers are wanting to consume healthcare are changing by generation. Age is a significantly important factor in not only the way populations want to consume care, but also the types care that they want. We have seen millennials really lean in on mental health services. We've seen the 25 to 30 5-year-old women particularly leaning into the maternal mental health benefits that are coming out in the market. So as an investor who's raising capital right now, just fully transparently having to find the people that I'm aligned with has taken some travel and is making lots of open-mindedness, frankly, to be excited about finding the people who want to build the same worlds that you want to build. Because just like the founder side, nobody can do this alone.
David S. Williams III (21:27):
No starting and growing companies, including venture funds is a team sport. Build the right team with the right product and we all win. So the next question is how do we make this future a reality for each other and for founders
Vanessa Villaverde (21:45):
The future? I see it's one where underinvested founders don't need to break in. They're already at the table setting the agenda, but we don't get there on community and vibes. We need capital that's patient data that reflects real people. Data, of course, is a big one right now. And networks that open doors, not just talk about inclusion, but sponsorship. I believe UCLA and places like overlap can be launchpads not just for companies, but frankly for new norms of doing business and the kind where values scale just as fast as revenue. And I believe that overlap can connect to a global market, and I'm thrilled to continue to partner with you to build this global network.
David S. Williams III (22:38):
I love that vision. As part of overlap, I want to document what success looks like. So entrepreneurs see that there are many paths, and here's the truth. What works for you won't work for others. So having many examples of the paths to success helps increase the probability of achieving our goals, to accomplishing our missions, and to achieving returns. My message to entrepreneurs is simple. We want you to build your dream company, overcome obstacles, and you can do it. Overcome obstacles. That's what overlap is for, and that's why the OVERcast is here. Vanessa, I am so honored to have you as our first guest on the OVERcast. Can you leave us with a closing thought?
Vanessa Villaverde (23:46):
Yeah. My closing thought is a bit of a reflection of us. When we first started talking about supporting founders and I asked you, I said, Hey, do you want to go to Detroit?
(23:59)
You jumped on a plane and we had just met. And that meant so much to me that you were willing to sacrifice your time away from your own family to take some action. I think that I want to make sure that people understand these moments and opportunities don't happen because it's easy. They happen because people take the leap of faith, jump on planes, work together, figure out a solution, get through the nose. That's why spaces like this feel different because they're created intentionally by people who want to build a legacy and who want to create a pathway for others. So thank you for taking the leap of faith with me, and thank you for the work that you will continue to do from California. And I am so excited that you're part of my global family.
David S. Williams III (24:56):
I remember that day when you asked me to go to Detroit. That's my hometown, born and raised. It was fantastic to speak at your conference, to give back to the place that made and molded me. So Vanessa, thank you for your insights and for your contributions to bringing overlap to life. And so all of you listening, if you aspire to build or already have a company in digital health, healthcare services, or life sciences, and you want a roadmap to success, again, become a member of overlap, go to overlap.co to sign up. Thank you for joining us. I'm going to leave you with this even when it's overcast outside. Remember, keep shining.