Raissa Hacohen Reveals AgeTech Startup Funding TRUTH | The AgeTech Podcast S4E1

Keren Etkin: Hi Gerontechies! Welcome to the first episode in a brand new season of the age tech podcast. This season is packed with amazing guests and thought provoking discussions. I am thrilled to kick it off with none other than Raissa Hacohen, the founding partner at longevity venture partners. Are you ready? Well, let’s get started.

Welcome to the show, Raissa!

Raissa Hacohen: Thank you so much for having me here.

Keren Etkin: So can you tell us a little bit about Longevity Venture Partners? It’s a relatively new fund. Am I correct?

Raissa Hacohen: That’s correct. My background is in private investing. And I had built a private portfolio for a company called Communicare. And it was a small micro fund. It was focused on the AgeTech space. They’re a large a chain of long term care facilities in the U. S. And they own many healthcare sort of related businesses.

And so we started investing in AgeTech in 2020. The micro fund did quite well. So as of last year, we decided to go out and raise a proper fund. So as of April 2023, we’re allocating a 30 million focus silver tech fund.

Keren Etkin: That is awesome. And you invest primarily in early stage ventures.

Raissa Hacohen: Early stage pre seed and seed.

Keren Etkin: So you’ve been in this space for a number of years. What can you tell us a little bit about your perspective? What do you see as the open opportunities in this space that startups aren’t addressing quite yet?

Raissa Hacohen: I think the major issue in AgeTech in general is that there’s not enough money flowing into the ecosystem. So the number of dedicated silver tech funds, you can count on your hand. It’s, the usual suspects, primetime 1843, Third Act. And I think it we’re building momentum.

Most generalist funds are starting to look needing to have one or two AgeTech related companies in their portfolios. So that’s a very positive. But in order for the whole ecosystem to do well, we need a little bit more capital flowing into it for investments. I would say, the other.

Main obstacle I see in the industry is that because we’re beholden to non specialist funds, you need to be really attractive to a generalist fund. So the numbers need to be really, VC appropriate. This is not tech enabled businesses. There are plenty of cash cow businesses in the industry that are. Very profitable. And that’s not what venture is looking for. Venture is looking for the unicorn scalability. And, you need to make sure that if you’re going the VC route, which is not suitable for all startups in the space but if you are going the VC route, you need to be prepared to go from 1 million ARR to 10 to a hundred million ARR.

In five to seven years, because that’s what, my shareholders are holding me to.

Keren Etkin: Absolutely. So are there any specific verticals within the AgeTech space that you are currently focused on?

Raissa Hacohen: So I’m very bullish on the future of work space. I think the retirement age is really no longer relevant. There are a lot of social institutions that were set in the early 1900s that, we’ve added 30 years to the lifespan and we haven’t changed these social institutions. So social security, retirement, some of these institutions are really no longer relevant and we need to rethink them.

I personally, I don’t plan to ever retire. I want to work my whole life. And I think we need to find the right sense of balance in these areas. Often people talk about retirement as falling off a cliff. And I think that there needs to be more room for ramping up and ramping down in your career.

So that’s a space I look at very closely. I think lifelong learning is very interesting. Insure tech needs a rethink because the insurance industry is building on old models. Fintech is quite interesting because the way the pensions and social security, we need to rethink those as well.

So those are all very interesting, I think.

Keren Etkin: Absolutely. And I totally agree with you about the fact that the retirement age is something that we have to rethink as a society. So within this market of the future of work and allowing people to continue working for as long as they wish, or as long as they need, because unfortunately we know that most people’s retirement savings are not going to last them for 20 or 30 years.

Within this space, are there any particular opportunities that you. feel are the most attractive to startups right now.

Raissa Hacohen: I think it’s a challenge. Because the customer base that you’re going after is not necessarily ready to rethink its retirement system. And so yes, I’m following a lot of kind of, freelancers and add ons wait to continue to ramp up. It shouldn’t be that the most innovative thing that’s happened in the retirement space in the past 10 years is the gig economy.

A lot of gig workers are in the senior population because they want to do, they want to do meaningful work. And so I don’t know if it’s another kind of revolution in that area, but there’s less institutional work being done and I’d like to see more.

Keren Etkin: Absolutely. Which sort of, I think like it ties us back to what you said earlier around the fact that not all the startups in this space are VC ready or appealing to VCs. So we see some startups in this space that are more tech enabled services that Do you provide a solution to a significant portion of the population but they’re not necessarily the ones who might be able to raise 50 million in funding to get to that next level.

And so you, do you invest globally or do you focus mostly on a U S and Israeli based startups?

Raissa Hacohen: I invest globally. So I’m an opportunistic fund. Our thesis is really to re imagine the way we live in order to improve the way we age. So more about adding life to years than years to life. So we’re less interested in pharma, but the scope is still quite wide in terms of looking cross sector.

Keren Etkin: I love that adding life to years rather than years to life. I think that is a wonderful way to refocus us into what this ecosystem is all about. So when you’re looking at your portfolio companies, I’m not going to ask you to choose a favorite because that’s unfair, but are there any particular companies that are doing really right now and you think are really innovative in terms of their product or their technology or their business model that other startups can look up to maybe?

Raissa Hacohen: Sure. So I have one called fairies. They’re basically like an uber for cleaners where you get these micro tasks. They go building by building. And so they sign partnerships with buildings, but they’re a consumer service. And you can get micro tasks done at your home. Now you wouldn’t think it’s necessarily AgeTech, but the truth is that what sort of gets you on the merry go round is not being able to keep your home, not being able to do your dishes, not being able to take out your garbage.

And so we put it in the portfolio with the thought that it really enables people to age at home. You can get anything to your door today, but there’s no trusted service that really comes in your house. So I think they’re doing really interesting things. You need to look at your customer base and your customer pipeline.

So what’s very interesting about them is they sign a partnership with a building and then they have 5, 000 potential clients. So anytime I look at a startup, I’m saying who are the potential customers? What’s the sales cycle? And what is the sales pipeline look like? Yes, I’m in the game of taking risk, but also my job is to potentially de risk those investments, right?

So if I’m looking and I’m saying, okay, you have three customers, I believe that you can scale to your next 20 customers. What does that customer base look like and how quick is that sale cycle?

Keren Etkin: Which sort of brings me to my next question, when you are doing your due diligence on a startup, what are the main boxes that you would love to tick in order to confidently say, we want to write a check for this one? And what are some of the stuff that will make you say this opportunity is not for us?

Raissa Hacohen: So I like to see a working product, an MVP. I like to see signals towards product market fit. So whether that’s actual revenue, Or initial partnerships, design partnerships, something that tells me that when you do get to market, customers are going to want this. And then the third is the team.

I’m looking for the top 1 percent of entrepreneurs going after the AgeTech space. So often, if I like a specific industry, I’ll do some market research and I’ll look at every single startup in this space and reach out to most of them and pick what I think is the winning team.

Keren Etkin: Have you encountered any any startups in our space that you, maybe that’s, if you don’t want to answer that’s fine. We can edit this out. But if you encountered any startups in our space that you said, ah, I wish I would have made that investment.

I, they were just raising their seed funding right before we closed the fund. That is a missed opportunity. I really would have loved to be on their captable

Raissa Hacohen: I definitely have an anti portfolio. So companies that I missed, what I often tell people is no one’s a prophet. It’s really very much, these startups are very much roller coasters. So it could look good two years in and then four years and it doesn’t. So the feedback loop is very, Long and very convoluted, so it’s very hard to give like a very strong yes or no answer.

That was a mistake because the feedback loop is so convoluted. Some of my worst companies have exited. Some of my best companies have flopped. And so it’s really about a snapshot in time about where the company is.

Keren Etkin: said that makes a lot of sense actually. And do you have any advice? That you love to give startups at such an early stage. So for example, if you meet a startup and they’re slightly earlier than when you feel comfortable investing and you say, Hey, let’s follow up in six months. Is there like a specific advice that you find yourself giving over and over?

Raissa Hacohen: What I would say is this, there are two things. One is, I’m always wrong. I want to be proven wrong. I want startups in our space to do well, even the ones I say no to. Come back to me with data. I’m looking for that hockey stick. That’s my, mandate that was given to me by my shareholders.

If you can show me that you can hit, Those KPIs and those, revenue targets, I’m going to be interested, even if I wasn’t interested before and most VCs would. Prove everyone wrong. I think that’s the number one. And two, I would say is communicate. There are plenty of entrepreneurs who you say I’d like to hear from you or put me on a, newsletter or investor letter just so you get a sense of your, communication style and how you operate, how you’re thinking about running the business.

And then you hear nothing. And so I, I’m, I like data points. And the more data points, the better. So if I see you once, and then you come back to me when you’re fundraising, I have less data points to base my opinion on. And so I would say, try to pick some consistent level of communication, that’s good for you, whether it’s every month or every quarter or whatever it is to get the message out.

To keep the people who are your sort of fans and who are watching you, who you’re on their watch list, to keep them involved, to keep them intrigued.

Keren Etkin: That is such fantastic advice. So basically compile a a mailing list of potential investors, potential partners, and just keep them in the loop and get them engaged throughout the company’s lifecycle, even if they haven’t invested yet, or they haven’t purchased your product yet. And that is fantastic advice.

I also know it’s. It might be really hard for startups to do when they’re just starting out and they’re just not enough people on the team to do everything. But it’s fantastic advice nonetheless.

Raissa Hacohen: I, I totally appreciate that. And yet, the stronger your relationships are and the stronger your network is, the easier time you’re going to have fundraising.

Keren Etkin: Absolutely. And it’s what I see all the time the best fundraisers I know are also the best ones at maintaining, creating relationships and maintaining them for years sometimes until that person is ready to make an investment. Sometimes I see startups who meet someone very early in the startup life cycle who is, Only able to invest huge check sizes.

And it takes years for the startup to grow and reach that level, but when it does, and they’ve maintained that relationship, then that person is way more likely to write the check. So that is fantastic advice.

Raissa Hacohen: I would, yeah, a hundred percent. Because it may seem like a transactional business, But really, it’s a relationship business. My LPs are investing with me for a decade. And I’m investing with my entrepreneurs for a decade. So this is like a, this is a long term relationship business. And there are plenty of entrepreneurs who, I’ve seen them go after something.

It’s not in my space, but I like what they’re doing. I like how they’re approaching it. And all of a sudden they land on something in the AgeTech space. And it is something that I can look at.

Keren Etkin: Something else that I love seeing is entrepreneurs who they’re serial entrepreneurs and that the same investors are backing them up, no matter what venture they decide to embark on because they believe in them and they’ve built those relationships. So I think it’s really powerful.

So even for your next startup, it could be valuable. So I would like at this point to ask you to take out your crystal ball. And try to imagine what the future of this ecosystem could look like five, 10 or 20 years down the line. The best case scenario that you can think of.

Raissa Hacohen: that’s a tough one. But what I would say is this, I think the AgeTech problems that we’re focused on are not all VC addressable. And so we need a global task force. That’s governmental and cultural and grassroots that’s addressing like some of the key issues in society. And the way we disincentivize matching health span and lifespan.

And so I would like to see, a global movement towards matching healthspan and lifespan and looking at the way, again, the way we build our workforce, the way we build the system of retirement, the system of, of social security. And as we’re rethinking these systems globally, the caregiving task force and where you’re going to deploy with some of these, aging populations and, I do feel that there’s a big gap that can be addressed by technology.

And that’s where VC comes in and that’s where VC can accelerate, the technological aspect of closing that gap, but the rest of it also needs to be addressed. And so I would like to see a lot more global funding going into the AgeTech system, but I’d also like to see a global movement towards addressing some of these international issues that are facing the aging population.

Keren Etkin: Absolutely. That is so important to really make sure that we all get to, to grow old and live our best lives. And like you said, adding more life to years rather than more years to life. And that is really spot on. Is there anything else you would like to add that we didn’t talk about and you think is worth bringing up?

Raissa Hacohen: I would say that I see a lot of companies in the AgeTech space, back to the sort of tech enabled services. There’s a lot of value in non VC backable ventures. And If you can manage to, bootstrap or get yourself off the ground with, private capital, a friends and family around just to kick you off and build a sustainable business.

I recommend that to a lot of companies that I see. VC is really like 1 percent of the startups and the companies that you’re seeing globally. So it’s just, it’s not the right structure. For many companies that have very important missions. And so I would just say, not to get discouraged, but to just redirect and understand what the best suited, financial structure is for your startup.

Keren Etkin: Absolutely. I could not agree more. And it’s not just that not all companies are VC ready or even will ever be VC ready, but it’s also, I think it adds a lot of stress and pressure raising VC capital to businesses that, could really make a huge impact and be profitable, but don’t necessarily need that pressure of go be a unicorn or try to be a unicorn.

Thank you so much for joining me on the podcast today. It’s always an absolute pleasure chatting with you and thank you so much.

Raissa Hacohen: Yeah. Thank you for having me anytime.

Keren: Thank you for watching this episode of the AgeTech podcast. If you enjoyed it, make sure they hit the like subscribe and get notification buttons so you can get a notification. Whenever we publish a new episode. Until next time, stay humble. Stay curious.