The Angel Next Door

Unlocking Investment Opportunities in Women's Health with Economist Mark Gannott

Episode Summary

Have you ever wondered what it takes for a startup, particularly in a niche field like women's health, to secure the necessary funding to move forward and make a meaningful impact? In this episode of The Angel Next Door Podcast, Marcia Dawood sits down with Mark Gannott, who brings a unique blend of neuroscience, economics, and entrepreneurship to the table. From navigating the complex landscape of women's health financing to shedding light on economic modeling and network strategies, Mark's insights are invaluable for anyone looking to understand the intricacies of funding in highly specialized areas. Mark Gannott, an economist and pharmacoeconomist, has a scholarly background in neuroscience and economics. His career took a pivotal turn following a personal tragedy that shifted his focus from medical school to the financing side of healthcare. With a side project in managing a massively popular social media page focused on dogs and mental health, Mark works on critical health issues, including cannabis economics and underfunded areas like endometriosis. His drive to bring more financial resources to women's health startups sets him apart as a thought leader in this space. In this enlightening conversation, Mark explores why women's health is still struggling to garner sufficient funding despite its massive economic potential. He talks about his work as a pharmacoeconomist and the significance of building financial models that make compelling cases for investment in women's health. Additionally, the episode highlights the importance of network analysis in connecting the right people to foster successful startups. Whether you're an investor, an entrepreneur, or someone passionate about women's health, this episode provides crucial insights into an often-overlooked yet vital sector. Mark's forward-thinking approach to financing and network building makes this episode a must-listen for anyone interested in transforming the landscape for women's health.

Episode Notes

Have you ever wondered what it takes for a startup, particularly in a niche field like women's health, to secure the necessary funding to move forward and make a meaningful impact? In this episode of The Angel Next Door Podcast, Marcia Dawood sits down with Mark Gannott, who brings a unique blend of neuroscience, economics, and entrepreneurship to the table. From navigating the complex landscape of women's health financing to shedding light on economic modeling and network strategies, Mark's insights are invaluable for anyone looking to understand the intricacies of funding in highly specialized areas.

Mark Gannott, an economist and pharmacoeconomist, has a scholarly background in neuroscience and economics. His career took a pivotal turn following a personal tragedy that shifted his focus from medical school to the financing side of healthcare. With a side project in managing a massively popular social media page focused on dogs and mental health, Mark works on critical health issues, including cannabis economics and underfunded areas like endometriosis. His drive to bring more financial resources to women's health startups sets him apart as a thought leader in this space.

In this enlightening conversation, Mark explores why women's health is still struggling to garner sufficient funding despite its massive economic potential. He talks about his work as a pharmacoeconomist and the significance of building financial models that make compelling cases for investment in women's health. Additionally, the episode highlights the importance of network analysis in connecting the right people to foster successful startups. Whether you're an investor, an entrepreneur, or someone passionate about women's health, this episode provides crucial insights into an often-overlooked yet vital sector. Mark's forward-thinking approach to financing and network building makes this episode a must-listen for anyone interested in transforming the landscape for women's health.

 

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Episode Transcription

Marcia Dawood  

Welcome to the show.

Mark Gannott 

Hi. Thanks for having me.

Marcia Dawood  

So, Mark, I'm excited to talk to you. You are a wealth of knowledge about all kinds of things related to women's health, financing women's health. You have all these great tips and tricks. So why don't you start out, though? Tell us a little bit about your background, how you became such an amazing economist and all, about how you learned about investing and getting involved in investing.

Mark Gannott 

Sure. So it started when I was back at Emory studying neuroscience and economics, which are pretty disparate fields, but also are really the crux of a lot of life science. Right. And see, I just happened to love them both. Like, to me, it was really fun. I worked in a neuroeconomics lab, like, studying microeconomics. So, like, the science and decision making and, like, how people tick, which then they pivot into suicide for ketamine. And I was like, cool.

Mark Gannott 

Like, I had no exposure, really, to either, like, suicide or ketamine. And then about three months before s Ketamine got approved my senior year, my uncle killed himself and really changed me from wanting to go to med school to wanting to make more of an upstream difference. So I think that's when I really started to think about the financing a lot, because the reason it took our trial, basically, my uncle would still have been here if we could have got our trial finance faster. And my PI at Emory went to the CDC and talked to his old friend. It was like, we need money. His friend was like, absolutely. It could not have been easier for us. And it still wasn't fast enough.

Mark Gannott 

And since then, I buried 23 people, about half to suicide. And so that's something that really deeply has affected me and shaped me. So post undergrad, I just could not go to med school and ended up at an animal immune conglomerate really randomly, because it spreads goodwill and cheer. But I was also burnt out, and it was like, the farthest thing possible from all this work. And so I started working with one of my best friends. He lives in Sydney. I met him randomly when he had, like, 400,000 followers. We scaled, like, 8 million.

Mark Gannott 

We did, like, over a billion views of the bee, but with mostly dogs and cats memes. So everyone's, oh, everyone likes dogs. That makes sense. It should. And this is great. To this day, we still run it. We do a lot of views, and we get really nice messaging people about how it helps their mental health. Or my favorite message about a man who works with a special needs kid, and he says, basically it's 24 hours shifts around our 14 to 18, he'll get on our page for 20 minutes, and he'll love his job again.

Mark Gannott 

But he's. I just get burnt out for a little, and you see I'm smiling. I still think about this message three and a half, four years later is the nicest message I've ever gotten. I was talking with the founder of the Marshall Cannabis association, and he's like, you have a background in studying drugs? Which I'm like, yeah, I guess I do. And you're an economist, and I need an economist. He's. I can build financial models, but I can't really do economic analysis. Well, what I didn't realize was I had been trained as, like, a health economist.

Mark Gannott 

And because of my background, it's pretty much impossible for me to not be a pharmaco economist, because it's just, I can't do it. So I brought to context, there's only four cannabis economists, including me. The other ones are all like, oh, my God, there's a scientist. And so we did all the. We did a lot of projects, like the Marshall Cannabis association, looking at proper allocation of cannabis licenses to help people of color. And other people are traditionally disadvantaged by the war on drugs, which is what social equity is. And so I still do a lot of that work, which actually paid the way pretty well for women's health. But that's what got my foray when I.

Mark Gannott 

And this happened so fast in business school. By September of my first year, we had already had a project done, because it basically started almost before I got to school. And so we did the tam of cannabis. I got introduced to the other cannabis economists, and that's when I really started to learn economics, because cannabis is weird. It's just weird. It's. There's so many layers to the way that it's not exactly a bio farm. It's not exactly a farming thing.

Mark Gannott 

The people in it, you'll have, like, PhD neuroscientist people who are just really good farmers. And it's like, how many fields do you have where you have to have that, like, primary industry knowledge synthesized with the most erudite ivory tower? And so it really, I think, helps. But it's also like a drug. It's a medicine, right? And if you look at the way people use it, they use it as an over the counter ameliorant more often than not. And so a lot of this research helped to hone my skills while I'm in business school. And then I ended up working concurrently at a neurogenomic startup, looking at like mental health really going back, harkening back onto my work that I had done in undergrad, that actually helped a lot to both be an economist and in business school, working at a startup that was raising money because it was like bringing all those lenses together and forcing me to constantly not only articulate how these fields are interconnected, but also to further interweave them and to think about from a network standpoint, what are we missing? Because a lot of, I would say economics is really good systems thinking and women's health going there is a lot of systems thinking. So I got really good baseline. While I'm getting my MBA, I went and started doing working with this other company through some consulting work.

Mark Gannott 

The first major client was a company called Gyneco, which are a cannabis endometriosis company. Yodem, the CEO shouts to you or is like, hey, can you build me a model? But also. Cause he's an Israeli, he's like can you please help me meet some Americans and just other indo players. So I'm like cool, I'll go and meet some people. Cause I thought I had knew a little bit about endometriosis, not a lot of, but I had been at my other firm, we had started looking at it for women's health. Cause you know, the neurogenomics firm was really interested in some women's health conditions. And if it's not the most expensive women's health condition, and it might be, it's number two, which I'll touch upon a little bit later. But like the long and the short of it is that I started doing that and within a few months I was the best connected person in the world in Endo because it was.

Mark Gannott 

There's not a lot of money in it, it's criminally underfunded and everyone's fighting for funding. So all the CEO's are spending every day trying to get funding and trying to reach the needle and move things forward. I stand on the shoulders of giants, but by and large there's no data. You say, how much is that company worth? The disease they're treating costs 30,000 a person and they save 25,000 and they're costing 20% of that. So you're like, all of a sudden you're like, that's 5000 a pop per patient. You expect you're going to have a million patients in the next three years. There's your money. Which if you're not like a health economist or a pharmacoeconomist, to be able to go through those assumptions can be quite onerous.

Mark Gannott 

And to do a deep dive in the literature, right, that requires generally a pretty robust scientific background.

Marcia Dawood  

So you as a pharmaco economist, means that you're looking at the pharmacology, all the types of drugs that go along with helping some of these diseases, especially like endometriosis, which doesn't get a lot of attention. And so you're trying to see from a broader standpoint, like how does this all work together, and how can we get these startups that are working on some of these diseases that don't get as much attention? How can we get them more attention?

Mark Gannott 

Yes, and I think the real distinguish between health economics outcomes research he or, and pharmaco, at least in my mind, is pharmacos are almost all pure scientists, a lot of pharmacists. So health economics works well when there's a lot of literature about things, but when it's like, we don't really know what this costs, we don't really understand this disease. So actually, a lot of what I have less, fewer drugs in my portfolio, more diagnostics and med techs, but that's still, it's because it's not just drugs anymore, right? It's really interventions. Interventions just used to be drugs, and when the word was invented, interventions meant drugs, and now intervention means med device, diagnostic, health tech. And yeah, I work. And also the disease burdens. I like help to help founders explain to investors, hey, this disease is really expensive, and that costs your company a lot of money. And theyre like, how much money? If you funded this company, it would save you five times what youre spending every year.

Mark Gannott 

And you make arguments like that and theyre like, huh? And thats really what my job is, to take all this complex data and synthesize it into a, I like to say, come up with financial reasons for people to do good because I generally take projects that make the world a better place, or I try to, and if youre working in life science, your projects do make the world a better place, especially in women's health. So all you're doing is saying, here's the value, because let's be real, women get less than, I know this. Women get less than 2% of vc money. There's obviously a huge market failure. It's not like we didn't just have a unicorn flow. Health and women's health last week. There's so much money in this space, and I don't know why investors aren't seeing it, but if you really ask me what I see, my job, it's not about pharmacoeconomics, it's about finance. Pharmacoeconomics is a very good lens, but it's about getting more money into research so that treatments and the diagnostics and the med devices that deserve to exist and that people deserve to have actually do exist.

Mark Gannott 

My firm, Rogue, is an insight solutions firm, and he said what I've always believed, which is the way you scale insights, is to become an investor, because then you can see things in a lens that other people can and you can understand what's going to make someone a winner. What are the key drivers? What things about a founder? Can you talk to them and be like, oh, and what are the other intangibles?

Marcia Dawood  

You're like, right, okay, so your company does insights to help these portfolio companies, these startups, early stage companies, private companies, basically. Doctor Brittany Barretto.

Mark Gannott 

Love Brit.

Marcia Dawood  

Yeah, love her. She came on the show before and talked to us a little bit about women's health and all the work that she's doing and her insights report.

Mark Gannott 

I work with a lot of private companies, either working with their data or other, I know also other private people. It's usually if you're working on something like endometriosis, like every company has very willingly been like, if you think this data will help other people, please use it.

Marcia Dawood  

So how do we work to get more funding to some of these companies that really need it for women's health?

Mark Gannott 

That's a great question. I think one of the things is we need, like, good financial exits in women's health, and not that we're not getting them, but there's such a streaming problem because really upstream, we're not getting this. In fact, take it a step further. I bet I wouldn't be surprised. Brit mentioned this upstream trial exclusion. Women aren't in clinical trials, so you don't have mirroring data, you don't have the early stage data, you don't have Reese's data or any other animal that you might use and say, we could de risk this. Let's be real. Investors are trying to de risk.

Mark Gannott 

And if you're a, like, deep tech investor, which is what a lot of women's health is going to be, the de risking process is more difficult. And so one thing I think that would be beneficial is I shouldn't be the only pharmacoeconomist in endometriosis. We should have more people in these different specialties so there's more access, which means I think we need more life science, like traditional life science people to come in and flood the industry. Because a lot of the, if you look at a lot of the top people in women's health, they have deep experience, usually in other life science, and they have contacts in other life science who will co invest with them. Because there's only, I think there's nine vc's in women's health. That's not enough. If you look at the aum, there just isn't enough dry powder to fund the things that need to be funded. So you need syndication.

Mark Gannott 

And how do you get those syndicates? Well, one way to do it is if you have one consultant from, who used to work with a venture capitalist or something. But another problem is there are not women's health consultants, which means they're not in four to five years, there are very few consultants. So there can be very few venture capitalists who have done the work, because that pipeline is also an issue. Talking about what networks are going to help to understand what makes a female founder successfully raise, because I also think there's a disconnect. And some women are like, I need to raise money. And even the ones who have a lot of experience, the bar for women's health is so much higher. The best investor I know who's a dude, he is 34, he has eight unicorns. It took him two years to raise 2 million, and he has one of the best technologies I've ever seen.

Mark Gannott 

The dude is running a fund for David Berry, who's one of the top biotech investors. He is running the fund. And they're like, but what do you know about the finances? What are you talking about? And this is a guy, and it pays to be a man. In women's health, they raise more money and it's still hard. Why? And so that's what I think needs to happen, is we need to understand what really we know. But I want a fresh insights onto every little thing. I want to know women that raised successfully, what do their networks look like? Women that didn't race successfully, what were the, what were the real complaints? Not, oh, it's too early, but okay, we didn't feel like it was de riskable. For this, I think we need more hior.

Mark Gannott 

There's just not enough health economics, if you look at it, and because value based care is coming to dominate the landscape for everything, remember, there's 21,000 pharmaco economists and 50,000 heal people, which includes the pharmacokolist. There's 80 million working adults in the US. It's not enough. So you need more of that. And then you need more, not just exits, but I think we need more really deep finance people to be looking at women's health as a space and just see dollar signs. Because I think there should be, because they obviously, people don't care about women dying or women being in pain or women suffering. None of these things seem to matter. Okay, there is so much money.

Mark Gannott 

Do you care about that? You're a vc. Isn't that your job to make money? And I think that's what it's going to take is the continual, not just successful business exits, but the aggressive exits, de risking, and not just education that the field exists, but rather education about what successful founders in the field look like. So that when the best found. So it's not just, oh, it's not a woman's health person, but then that they're actually treated like a founder individually, as opposed to, you come from women's health, so you have a lower valuation or a. Your first investor was a woman, so we're lowering your valuation, both of which are true things, which is terrible. If anything, it should raise the value. Yeah. When a woman leaves the round, especially in women's health, they think it's a woman's thing.

Mark Gannott 

So the valuation goes down.

Marcia Dawood  

So we need more exit data. We need more people to have the financial and economic modeling to show that these companies have the tam to make money.

Mark Gannott 

And. And I think digital health, which is seen as femtech, I would argue that women's health is more like the deep tech, and femtech is more like apps and whatnot. But digital health has had cratered exits. So people see femtech or women's health, they think digital health, which in general is not doing well, and they're like, oh, we should stay away. So I also think we need, like, to support the deep tech ones, like diet, like shouts to Harold, biotech. I do a lot of work with them. They're endometrios, non invasive, diagnostic. Their tam is ridiculous.

Mark Gannott 

Or companies like Dama Health, who I've done with, love them, their birth control, clinical decision support. There's a lot of these opportunities for these deep science companies that I think are just going to make ridiculous amounts of money. And even if it's not that company, it's something doing what they're doing, because they're attacking issues that are not only huge, but they're not that hard to disrupt, because it's like, why? Hasn't been done? There's no financing. If you say women raise 2% of vc money, you can also look at that as it's 50 times easier, 50 for men to raise capital plus women return like two x what men do. So I just don't understand why people aren't investing more in them. I think if you had a fiduciary duty, you should be like aggressively focusing on funding women because they just return more. I think you put in your fund strategy, we make women jump through hoops. No, we should do that to men economically.

Mark Gannott 

We should make men have a much higher bar. So I want to kill endometriosis. I want to fund different companies to eventually gene edit it out of existence. First step is diagnosing it. Then you just make small bets, 1015 years, small bet here, small bit there. Do you want to run a company that's going to go to war with this? We'll give you money. All you need to do is you could put there, but you can't do any of these things if you can't get consistent capital.

Marcia Dawood  

Yes, consistent capital. That's a good way to put it. Because they get started and they get so far and then they just can't.

Mark Gannott 

It's horrible. Companies that have basically made it through clinicals, they had no more money spent. Every time the investors go, we just think that we should be getting returns already. Like, we just made it through clinicals, dude, we're commercialization the investor, like, sell the company. So risk tolerance is part of it. Things like this insight. There's a thing that's published every ten years. I have an excel model for your likelihood of exam.

Mark Gannott 

If you're a life science company, that's the kind of thing that helps de risk women's health. Because the investors are like, this is risky. You're like, but you know how risky it really is? We usually don't. A lot of your really good investors are like very finance heavy, but you need what I call science or science finance to do any of this. And that's just a lot rarer. So unless you have somebody who can de risk it, who understands both of them, it's easier to be like, why invest in what I know? I don't understand women's health. I'm not investing in that.

Marcia Dawood  

Signance. I like that.

Mark Gannott 

I got sick of saying life science finance.

Marcia Dawood  

That makes a lot of sense. Signance. Yeah, yeah, it's awesome. Tell me a little bit about how you're trying to show the networks of different people and how you're trying to get that all together.

Mark Gannott 

Yeah, I would show you, but this is a recording, but. So this is really. My buddy introduced me to this really cool program for network mapping called Kumu that I started playing with. It's intuitive, but how do you spell it, really pay you mu? So, you can take people's linkedins, and then you can upload those Linkedins into Kumu, and it will show you how, who's connected to whom. But then you can also take a step further and see, okay, who has the most connections, and more importantly, who is not connected to whom. So, Marcia, if I'm sitting with you and I'm like, oh, you should know my friend Sam. How do I know if you know my friend Sam? I don't. But if I had this network analysis, I can be like, wow, Sam and Marcia both do, like, women's financing.

Mark Gannott 

That's kind of niche. And so you do things like tag them, right? So, for instance, it started with reproduction. I only know about 20, maybe ish, very significant reproduction players ten to 20, right? Who are like, you people have to know each other. Most of them know each other, I think, but I don't know. And see, if I had this network mapping, I could just look at it and go, oh, shoot, you don't know her. Let me make an introduction. And so, what we want to do is actually map a lot of these. Not just key decision makers and key opinion leaders, but it's like nexuses and nodes of networks, and especially people who are working to drive things forward.

Mark Gannott 

If you have a coalition, say you have four or five people working on the same thing, you can map everyone's networks to make sure from the jump that they all know all the people they should. And because you can do it, you can slice it really easily over different things. Like, you can do schools, and you can say, do MBA, grad student mbas, and you can switch to undergrad. It will automatically show you, oh, reconstitute from these are the MBAs who know each other to these are the undergrads. So, the ability to really quickly parse different kinds of networks from you're an investor, or looks like, say, these investors have dry powder, which are another things you can visually indicate. You can take these insights and rapidly distill this. So, we want to use this network analysis to understand, like, where people who are working, especially in niche areas, or people who have similar complementary skills or who need things when they should know each other and just don't. To make sure that you have better coalition building.

Mark Gannott 

Because ultimately, I think one thing's will help. Women's health is good coalitions, where people are in these communities and ecosystems, and they just want to help each other because a rising tide lifts all boats. And it's not what can I get out of it, it's what can feel. Does the field going to benefit if you can build those, if you can get those teams where people are like, look, you're all working. You're all on the same team. Let's act like it. But they have to know they're on the same team. So the network mapping makes you like.

Mark Gannott 

It's like jerseys almost. And so that allows you to mine these large networks and just really see not only who are the key decision makers, but if I want to make something happen, and let's say I want to talk to you, Marcia, but I don't know how to talk to you, I can use this analysis to say who's so, who ain't worked with Marcia and Alice. You and Allison are on that south by southwest thing. It might be like, oh, Allison and Marcia are on this thing. So do you know Allison? Oh, I do know Allison. And that's how it builds value, by just being like, who do you know? And how far away are you? How far moved are you from this person? And also, if you want to get in touch with them, who do they know closely? Because they'll show you.

Marcia Dawood  

Very interesting. So, Mark, what's next?

Mark Gannott 

So one is I want to keep developing this understanding, the network analysis of what helps a female entrepreneur raise successfully and what helps someone raise successfully in general. And the other is to expand the endometriosis research and to eventually talk about how things like women's health conditions curtail their ability to raise successfully. Because ultimately, I want to look at the intersection between raise, capital raise and race, gender and healthcare, and just see how they're all in a triangle. And so this is like working on two of the prongs and then a little more. I'm always working on a little racism work. And so hopefully coalescing the three of them into getting, like a good trifecta of, okay, we have a pretty good understanding of what your success is going to look based on this. And to make it better, here are concrete steps that we can take.

Marcia Dawood  

That's awesome, Mark, thanks so much for coming on the show today and telling us all about how we can get more funding to women's health.