What VCs Really Want From AgeTech Startups | The AgeTech Podcast S5E4 with Tracy Chadwell From 1843 Capital
If you’re building in the AgeTech space or thinking about raising your first round, this conversation is a goldmine. I sat down with Tracy Chadwell, founding partner at 1843 Capital – one of the earliest VC firms to focus on AgeTech – to unpack what really makes a startup fundable in this industry. From creative go-to-market strategies to the shift from “sick care” to prevention, Tracy brought a refreshing mix of experience, candor, and optimism. You’ll definitely walk away with some counterintuitive insights (and maybe a few hard truths) that every founder should hear.
Catch the full conversation on Youtube, Spotify, Apple Podcasts, or scroll down for the transcript (auto-generated, so pardon any oddities – the bots are still learning!)
Keren Etkin: Tracy, welcome back to the show.
Tracy Killoren Chadwell: Keren, thank you so much. It’s so good to see you. I always love talking to you.
Keren Etkin: Thank you. So it’s been a few years, since I last had you on the show. Could you share a little bit about, the journey that you’ve been through with 1843 Capital and what has happened in the past, give or take five years?
Tracy Killoren Chadwell: Oh yeah. Gosh, I can’t believe it’s been five years. And, you
Keren Etkin: I.
Tracy Killoren Chadwell: Really appreciate you being there from the beginning. And your focus on, on all things aging and how we can age better. And it’s it’s also been an inspir. For me as, as I’ve worked through my journey building the firm. We started
Keren Etkin: Thank you.
Tracy Killoren Chadwell: eight years ago. Yeah, of course. Yeah. Eight years ago. We started the firm and I can’t believe it’s been that long, which is, really nice because in this business of venture capital, you really don’t know how you’ve done until 10 years out. And here we are at eight years and our first fund is, has top quartile returns, which we’re really excited about.
And also too, our, our thesis is continuing to grow and evolve, you know? When, when we talked five years ago, no one was really talking about ai. I think we did, we did have a chat bot technology company, but we called it machine learning. At that point, we didn’t call it ai. So now here we are in a whole revolution and completely new business models and new opportunities.
Keren Etkin: That is so exciting. So in terms of your investment thesis, has anything changed since Fund one until today? I.
Tracy Killoren Chadwell: It’s definitely evolved. I think if you, if you stay in the same place while the world is moving, then, then you, you don’t get to see the best opportunities and. I would’ve, I would’ve called us focused on age tech or silver tech, you know, when we last talked and, and we still absolutely are, but that has evolved and that has involved to encompass longevity solutions because I think even as people into their sixties and their seventies, they want to make their remaining years healthy and well. We’ve seen the launch of a lot of wearables and a lot of data that can come off those wearables. So looking at companies that are, are. Doing the analytics in those, that, that data is, is a really interesting place. I have also seen some shifts in focus. You know, both, both the founders and and venture firms are shifting their focus from. Where people I think in age tech traditionally said, okay, here’s the easy, the easy route is to go to senior living because that’s where all the older people are forgetting that 98% of people want to age in place. it’s a relatively small market opportunity and it’s one where there’s not a lot of margins.
So if you’re just investing in companies that are focused on that market, I think, I think that’s a pretty tough one. Likewise, hospital systems. There are some. unique opportunities, especially in the cost saving space. And we can talk about a couple of my companies that are helping health systems do that.
But, unless it’s cost savings, it’s really hard for them, and especially as their internal costs are going up, their, their people costs are going up to afford new products for people to, to make themselves better. So what’s been happening. have taken matters into their own hands. I have a thesis called patient driven care, which is where the patient ha has a problem that’s so urgent that they have said, we’re, we’re not gonna worry about whether this is reimbursed or something.
This is, this is something we’re gonna take care of ourselves. And so I’ve invested in quite a few companies that are doing that.
Keren Etkin: That is fascinating because I, I think one of the myths about selling to older adults is that most, if not all older adults are already at the decumulation phase, so people are on a fixed income, so it’s very hard.
Tracy Killoren Chadwell: Right,
Keren Etkin: To get them to pay for something out of pocket. Can you elaborate on how you sort of learned or found companies that have managed to do that successfully?
Tracy Killoren Chadwell: Sure, of course. And, and when we’re talking about older adults, I really like to focus on people that are 50 and older. So while we have solutions that are for 80 year olds, we have one of the, the most wonderful dementia and Alzheimer’s care companies called Ripple Care, which is phenomenal. And that’s a, that’s a cost savings company where, I don’t know if you’re aware, but $350 billion for the costs every year.
Come from Alzheimer’s patients, which is just crazy. It’s actually one of the largest cost centers that there is. but but in terms of having capital to spend you know, there, we do have a tough
Have a tough.
with I believe it’s, it’s 40% of older adults don’t. Don’t have a lot of life savings.
And, and so those, they’re looking for solutions through Medicare and Medicaid. But then there are, and then remember there’s health savings accounts too that are in there. But then there’s also too the rest of the population that then has 80% of the wealth in this country. So there, there is a lot of wealth that’s being spent on both, I say health and travel, you know, at this point. So people are willing to come out of pocket for certain solutions. And one of our most successful companies is a company called MIDI Health, which is in Fund one. MIDI Health is focused on women’s hormonal health and women’s longevity and, that people are willing to pay out of pocket, but it is reimbursed through Medicare as well, which is fantastic. So
That is fantastic.
Getting preventative care too because the, the hormone replacement therapy has now proven to help with heart disease, to help with things like bone density. So why wouldn’t we wanna look at those solutions so that we can stave off those costs as we go forward?
Keren Etkin: Absolutely. So 1843 is actually one of the first, I think, three or four funds that emerged to specifically invest in age tech. So you have a long perspective on the ecosystem.
Tracy Killoren Chadwell: Yes.
Keren Etkin: do, how have you seen the ecosystem in general? Changed. Are you seeing more startups these days? Less startups, uh, startups tackling different problems today because we are in a very different world than we were in 20 18, 20, uh, 17.
Tracy Killoren Chadwell: I think that the first startups were, were focused very much on caregiver communication. That seemed to be the big one that everybody wanted to tackle. And of course, go to market is really, really tough on that one. And, and we’ve seen and. Companies like
Companies like.
That went public, but it went public at what would now we would call a low valuation.
And then was recently acquired. But those companies and, and things like honor, which, which supported people with caregivers did pretty well out of the gate. But then sort of. Struggled a bit. I think I’ve always said, you have to come at this space creatively. Everybody seems to be running for the same door and that door doesn’t necessarily open. So we did things like invested in autonomous driving because. One of the things that Joe Kauflin said and Joe, as you know, is head of the MIT age lab and wrote the book the Longevity Economy. He focused so much on mobility for people as they’re aging. And, we saw a few companies that were focused specifically on aging, but those, those had a really tough go to market.
They were trying to go direct to consumer and there wasn’t a lot of uptake. But we looked at the autonomous driving space because we knew that people were gonna have to get around. And we invested in a company called May Mobility, was the only one that was wheelchair accessible. So they were really focused on older adults and people with disabilities.
But at the same time, building one of the most important autonomous driving technology and mobility as a service, which is what they call it that we have today.
Today
Just
just
in addition to having,
any
with
contracts.
to drive older adults, they just signed a massive, massive contract with Uber. now they’re a direct competitor with Uber. So, so that that does a couple things for us. It helps people get around. It helps, it helps them to get to the doctors and to the hospitals, but it also provides great returns for my investors as well.
Keren Etkin: That is amazing. And I
Tracy Killoren Chadwell: creative, you know?
Keren Etkin: ab absolutely, and and I you’re absolutely right. And Joe Coughlin’s theory on mobility is spot on. It’s like the, it’s the, the missing piece of the puzzle for aging in place. People
Tracy Killoren Chadwell: It’s
Keren Etkin: seem to Exactly, people seem to think that aging in place is just in their home, but what happens when.
Person has to leave their home and get anywhere. It’s not,
Tracy Killoren Chadwell: Right.
Keren Etkin: not so easy, unfortunately.
Tracy Killoren Chadwell: Right, and, and I think if you are, and there are some absolutely wonderful groups that are, that are focused on supporting older adults from a philanthropy standpoint and a grant standpoint, those groups should focus rightly so on what the needs are. It’s harder for us to focus on the needs because we have to generate an above market return for investors. So what I tend to focus on. Is, is who has willingness to pay for some of these solutions. We can do great things, but there has to be somebody at the end of the day that’s willing to pay for it, and there has to be a good business model.
Keren Etkin: Absolutely. That’s a really, really important point. So speaking of willingness to pay what are you seeing? That there is willingness to pay for, but you’re not seeing startups serve those markets yet, or what? What are specific challenges that people are like eager to give money away to any startup who will solve a problem, but you can’t seem to find startups solving these particular problems.
Tracy Killoren Chadwell: Yeah, that’s a really good question because if I knew that, it would be, then it would be really easy. To pick the next startup for our portfolio. But I think, I think one of the things that we focused on and, and we have picked a few in, in this space, and there are people trying to do this, is, is solve for your health now and figuring out ways to circumvent the current.
Status quo in the health system and to start to look at yourself and your body as a place that doesn’t have to age per se in certain ways that we’ve historically accepted. So we, we don’t have to get brittle bones. We, we don’t have to develop cancers. And there are there. proven solutions to it, but people are now starting to take it into their own hands. They’re saying that, Hey, I don’t want that doctor feel good at the end of the day, who’s just gonna give me a pill to, to patch? I mean, for a long time, for for 40 years, we’ve accepted that. As, as practice and, and where we want to go. Now we’re
Now we’re looking and say,
don’t want sick care anymore.
We want actual preventative healthcare. And so we’ve, we’ve looked a lot in that space and obviously MIDI is one of our portfolio companies that’s doing that. But another company of ours that’s incredibly successful is called Function Health,
which.
- Biomarkers, which is fantastic because then you get to really see, do you have mercury poisoning?
Do you have lead poisoning? A lot of these osteoarthritis and autoimmune diseases that people say they just have to live with and and use pain medication and steroids. Maybe some of those, all, but maybe some of those situations could be really, really helped by taking a look at what your microbiome is doing.
We, we call this
Call the systems.
you don’t, you don’t look at the endpoint. You look at, Hey, where did things start how can we work to, to prevent things getting worse or maybe even reverse certain chronic conditions. It’s really unbelievable.
Keren Etkin: It is unbelievable that we finally have these technologies available for us as consumers. It’s really cutting edge to really look inside your own body and see what is going on other than doing a simple blood count.
Tracy Killoren Chadwell: of traditional, yeah, a lot of traditional doctors, they’re under so much pressure. They really want people to be well, but they’re under so much pressure to both please the health system, but then to also please the patient. And the patient often wants a pill, so what they do is they just shortcut.
They’re on the, they’re on the stopwatch and they, they see the person as quickly as they can. Test only for things that they have a pill for. Like say, you know, the lipid panel. So your, your, your high density cholesterol and your low density cholesterol, that’s something that they will test for often.
You know why? Because they have a statin they can prescribe. So everybody feels good about that. It’s really encouraging to see that both the public and the providers are moving towards more of this really the way healthcare’s supposed to be, which is, which is preventative, to make sure people don’t come down with these chronic conditions in the first place.
Keren Etkin: Exactly, and we do have examples from specific societies like let’s say Japan, where you see older adults who are, fit, nimble, healthier, because the lifestyle is so much different than what we have in Western countries.
Tracy Killoren Chadwell: Our, our traditional American diet is killing all of us, you know, and I was really glad to see that our, food stamp program, which is called SNAP here in the United States I don’t know if you’re aware of this, but 50% of those SNAP dollars were going towards sugary sodas
Keren Etkin: Oh.
Tracy Killoren Chadwell: just recently. Until just recently. So it’s really, it’s really sad because that is we we’re paying on the front end for the sugary sodas and we’re paying on the back end for the healthcare after, after people have ruined their health with those things.
Keren Etkin: Oh wow. Really counterproductive. Yeah.
Tracy Killoren Chadwell: counterproductive. Yeah, absolutely.
Yeah.
Keren Etkin: Wow. So, um, you’ve, again, like, like I said, you have a. Eight, an eight year perspective in this ecosystem, which is quite rare. What do you look forward to in this new age of ai? Are you looking for? To invest in a single person startup? That will be the next unicorn.
Tracy Killoren Chadwell: Oh my goodness. You know, that could possibly be I always like tech enabled services though, so I do really prefer the combination of, of people with technology. And I think that a lot of, software solutions that are just software can easily be disrupted by the next new software solution, especially as our processing power increases and our, our ability to analyze data more quickly becomes possible.
So things that, that I’m looking at are places where there’s a lot of data. be collected. Obviously we talked about already willingness to pay, right? So you have a someone who’s willing to pay for it, but then there’s also data that’s collected because I’m sure you’ve heard this before, but people talk about data as the new gold. And we have all of these AI models that are trained on historical data where they’re only as useful as how clean those data lakes are, number one. But then as they have current information, so there’s always gonna be. A real appetite for more data going forward as you, especially things like, let’s say drug companies that are, that are producing those things that maybe could help people or turn around a condition or for people that are in just chronic pain that you can’t solve for anything.
You know, we could develop more pain medications that are addictive and, and things like that and that are really effective right at the right, at the pain point. So the precision medicine is creating data. So, so we’re looking at companies where we can provide that, that newer data, which is really interesting.
And then we also have a company, Pluto Health, which is focused on aggregating all kinds of patient data so that we can just get a much better picture of people and get a much better picture of their health so we can improve their conditions going forward and find out where there’s gaps in care. Which is really important.
A space too where I haven’t found anything, but I think is really exciting is in the robotic space. I think that, that, you know, I’m, I am, I’m speaking to a company soon that has a, a small robotic wheelchair that can get you through the airports. And one of my favorite companies is a, a company called Skip, which is developing robotic pants that can assist you to, to walk.
Which I think is incredibly exciting. And then there’s all kinds of other applications where can help us do some of the, the tougher jobs that, that we can’t do or to, or to help us, you know, with our daily life to be able to get out of a chair. Right? Yeah,
Keren Etkin: Exactly. I, I share your excitement and I can’t wait to have a, a robotic butler at some point, hopefully in the near future.
Tracy Killoren Chadwell: Right, right. Exactly. Although I still wanna take my dog for a walk ’cause that’s good for me.
Keren Etkin: Absolutely. But the Butler robot can take out the trash.
Tracy Killoren Chadwell: Yes, Exactly.
Keren Etkin: So what would you say are sort of your KPIs, the boxes you wanna check when you meet new startups or new founding teams? If there are any entrepreneurs in the audience watching us looking to raise their seed round in the near future,
Tracy Killoren Chadwell: Yes.
Keren Etkin: what would you like them to, to have to be able to confidently write a check.
Tracy Killoren Chadwell: Well, I, I, I think you know, studies and studies and studies have been done on what makes startups the most successful. And over and over again, you hear timing. You know, you can, you can have a great opportunity, but if it’s not the right time sadly it, it, it’s much, much harder to become successful if it doesn’t have tailwinds. So that’s always something that we look for first is, is does this space have tailwinds? The next thing is the team. The team, and I’m sure that sounds kind of trite, but it’s, it’s really important to us from a couple of perspectives. One is that the team has experience and is networked in the space where they’re building it.
It doesn’t have to be directly correlated, but it has to be. They can’t rely on their investor to say, well, you make all these introductions for me. Oh, you, you know, and this is the, the frustration I have with some of the accelerators is that they’re taking people and, and giving them all these connections, but they’re not already in the space.
They’re not already. understanding what the true issues are and back to, you know, my, what I harp on all the time, willingness to pay. You know, there can be a lot of things that need to be in the world. It doesn’t necessarily mean someone will pay for it. And then I like complimentary teams. So I like to see a technical co-founder.
I like to see someone who really understands the underlying technology and preferably come from a company in a similar space so they know how to build in that space and they know what some of the constraints and opportunities are gonna be. and then I
Keren Etkin: And then I also.
Tracy Killoren Chadwell: an eye towards marketing because I think you can have a really great product, if you don’t have a successful sales and marketing arm, it’s very, very tough for anyone to be able to find or buy your product. So I think that that all has to be. To be integrated and you know, people say, oh, do you invest in direct to consumer? And I say, well, even B2B is direct to consumer because at the end of the day, you have a human being that is a, using your product, but also to, you’re selling to a human. So I, you know, I, I mean, I understand the nuance, obviously, of a more of a broad based marketing approach versus B2B sales can sometimes be through channel partnerships, but it’s more the idea of. How and who are you selling to? And really understanding that which which I think some people get so enamored with and so excited by and focused on building their product they forget that a good product with good sales is successful. A great product with no sales is going into bankruptcy.
Keren Etkin: Absolutely. So founder market fit technical background, and the ability to sell and market your product, which I think is often unfortunately overlooked until it’s too late, and that is part of the reason why companies in our ecosystem take longer to find that product market fit because it just takes them longer to have that interaction with the large amount of people that you need to find your product market fit.
Tracy Killoren Chadwell: And a lot of that has to do with timing and a lot of it has to do with creativity.
Keren Etkin: Absolutely 100%. So what advice do you find yourself giving founders over and over again, whether that’s founders who are just, you’re meeting them for the first time to raise their seed founding, and maybe you’re saying it’s not the right time. Let’s talk in six months. Uh, or founders who are already in the trenches, maybe founders who have been with you in since fund one.
Tracy Killoren Chadwell: Great. Well actually, let’s take a, a step back to the first part, which is that found, you know, I speak to founders every single day and we can obviously only do about three or four of those companies a day. So, so most of them I’m saying no to. And the number one question they ask is, do you have anybody else you can introduce me to? And so the advice that I give day after day after day after day is you’ve got to find the right. Founder investor fit. so the way to do that is to go and look at the ecosystem of companies that are not exactly like yours, but maybe adjacent. And then go to a database like Crunchbase or PitchBook and, and to try to find out who. Those investors were, that backed them originally because then they will, they will get it, they will understand it. I, I have a, a great founder that we’re, we just gave a term sheet to, she had a term sheet explaining in her deck with what functional health was, and I said. I think you should take that out because if someone doesn’t understand what functional health is, they’re not gonna be a good investor for you. You know, they’re not gonna be helpful and then they’re not gonna get the, the value proposition. So I think you need to find those investors that are aligned with you. It’s sort of sort, you know, it’s, it’s like any other relationship. You have to find someone that really gets your space. And the only way that you can do that is by doing the research and doing the legwork.
And then the next piece is, is to go to LinkedIn. And to find someone who can make an introduction to you. And if you are that founder that’s been in the space, like I said, is the best kind of founder, the second or third time founder or, or you’ve been in a startup before, you are gonna have a way into that investor. And so use that instead of the, the cold call emails, which are are incredibly ineffective.
Keren Etkin: Absolutely, and
Tracy Killoren Chadwell: ahead of time.
Keren Etkin: Absolutely, and just because some, some VC has invested in a company like yours doesn’t necessarily mean they, that they won’t take the call and won’t also write a check to you. ’cause even if someone seems like competitor, it’s not necessarily.
Tracy Killoren Chadwell: Yeah,
Keren Etkin: Like exclusive.
Tracy Killoren Chadwell: exactly. Yeah.
Keren Etkin: Awesome. So that was actually my last question.
Is there anything else that we didn’t talk about that you would like to add? Any call to action to people in the audience? I.
Tracy Killoren Chadwell: I think the, the only thing that we didn’t add is that I appreciate everyone who’s building a company. You know, I built my firm from scratch and, you know, the, the the really important thing is that you realize that. taking action and by movement in this world, you’re doing something incredibly valuable.
And so I, I honor and respect that and appreciate everyone who’s out there in the trenches.
Keren Etkin: Wow. Thank you so much for helping us end the podcast on such an inspirational note. I appreciate that.
Tracy Killoren Chadwell: Yeah. Absolutely.
Keren Etkin: Hmm. Awesome. So tr
Tracy Killoren Chadwell: with you, Keren.
Keren Etkin: Thank you. Thank you so much for joining me on the show again. And I wish you lots and lots of success with this fund. It sounds like it’s already pretty successful and it’s, it’s great to see so many
Tracy Killoren Chadwell: fund. Yeah we’re just wrapping up our second fund and getting ready to launch our third, so
Keren Etkin: exciting times. Awesome. Thank you so much, Tracy.
Tracy Killoren Chadwell: Yes. Great. Take care. And thanks so much.