Breakthrough Innovators

SV Health Investors supports breakthrough innovators – like these.

Our entrepreneurs are changing the face of healthcare – creating companies that bend the cost curve, develop new ways of delivering care, and address critical medical needs. They have a transformative impact on payers, providers, and patients.

Breakthrough Innovators

SV Health Investors supports breakthrough innovators – like these.

Our entrepreneurs are changing the face of healthcare – creating companies that bend the cost curve, develop new ways of delivering care, and address critical medical needs. They have a transformative impact on payers, providers, and patients.

Creating the next wave

In each sector, these company creators are delivering the future.

We back innovators with the potential to change the landscape. They’re developing the next wave of breakthrough biotechnology compounds, inventing medical device technologies with the power to improve lives, and delivering healthcare services and digital health solutions that have a decisive impact at the center of healthcare reform, quality improvement and cost containment.

Creating the next wave

In each sector, these company creators are delivering the future.

We back innovators with the potential to change the landscape. They’re developing the next wave of breakthrough biotechnology compounds, inventing medical device technologies with the power to improve lives, and delivering healthcare services and digital health solutions that have a decisive impact at the center of healthcare reform, quality improvement and cost containment.

Working side by side

SV Heath Investors supports entrepreneurs – hands on.

We provide our entrepreneurs with more than just capital. Our investment teams include veteran company-builders, and successful entrepreneurs make up the ranks of our Venture Partner program. We roll up our sleeves and work alongside our portfolio company leaders, helping them solve operational challenges and seize opportunities in good times and bad.

Working side by side

SV Heath Investors supports entrepreneurs – hands on.

We provide our entrepreneurs with more than just capital. Our investment teams include veteran company-builders, and successful entrepreneurs make up the ranks of our Venture Partner program. We roll up our sleeves and work alongside our portfolio company leaders, helping them solve operational challenges and seize opportunities in good times and bad.

Hear their stories

Every entrepreneur has a story to tell.

There are many paths to success – and to breakthrough impact. Meet our entrepreneurs and hear their stories. Find out who they are, and how they’re changing the face of healthcare.

Hear their stories

Every entrepreneur has a story to tell.

There are many paths to success – and to breakthrough impact. Meet our entrepreneurs and hear their stories. Find out who they are, and how they’re changing the face of healthcare.

Biotechnology

Simon Tate's Story

These company creators are developing the next wave of breakthrough compounds.

“When GSK decided to go in a different strategic direction and move away from neuroscience, our team needed a way forward. SV provided it for us. Clive Dix knew us well from his tenure at GSK – he understood the potential. Clive and his SV colleagues joined us at the table, rolled up their sleeves and we all got to work. Because SV knew the industry, they were able to create the financial structure – through multiple stages – necessary for us to get our compounds through clinical trials. They were there when we needed them – they were a sounding board for operational and clinical issues as well as financial issues. But they also gave us a free hand to conduct the research and development as we saw fit. And they helped us structure the right exit – one that met our needs and did justice to our work. We couldn’t have asked for more in a strategic partner.”

– Simon Tate, Convergence CEO

Treatment of neuropathic pain – in such common afflictions as neuralgia and sciatica – is a major challenge for practitioners. Topical treatments have limited effectiveness, and systemic therapies can lead to serious adverse effects.

The neuropathic pain team at UK biotech giant GSK, led by Simon Tate, was one of the early innovators in the field. But in 2010, GSK decided to close its neuroscience business.

This closure of neuroscience presented SV with the opportunity to spin out the team and create a new company dedicated to novel analgesics. It came to us thanks to Clive Dix, who had been CEO of one of our portfolio companies, DNA-based vaccine developer PowderMed. Earlier in his career, Clive had been UK Research Director at GSK, where he’d recruited Simon to build the neuropathic pain team.

At the time, Simon’s team had two promising drugs in pre-clinical phases – a sodium channel blocker and a calcium ion channel moderator. SV met with Clive, Simon and the team to chart a way forward and move the drugs into clinical trials. We established required financing levels, set milestones for drawing down cash, and set the key value reflection points for potential investors. We brought in two other VCs as co-investors in $35 million in Series A funding, and negotiated terms with GSK to give them an interest in the future of the new company. The reward structure clinched the deal and the new company, called Convergence, was spun out in 2010.

SV continued to work hands-on with Convergence, providing strategic counsel during the development of a significant proof of concept study for the sodium channel blocker. In the groundbreaking Phase 2 Trigeminal Neuralgia and Sciatica study, the treatment demonstrated exceptional efficacy and safety – it led to a 53 percent decrease in pain sensitivity (vs. 18 percent for placebo) and a 60 percent average reduction in the number of paroxysms (vs. 12 percent for placebo). The treatment is now in Phase 2b/3 trials. After four years of hands-on work by Clive and the SV team, we structured the acquisition of a portfolio of Convergence assets by Biogen Idec for up to $675 million (based on future milestones) in January 2015.

Medical Devices

Randy Barko’s Story

Innovators whose technologies are improving lives.

“We’d investigated a couple of different options – two that were strategic, and two that were financial. SV was the most attractive to us because their view was to support us and let us run as we were running – they’d let us execute our business strategy and run the business. They didn’t want to micromanage us, and they didn’t want to turn us into just another financial play, where we’d lose the innovation and lose what made the company successful.”

“They’re there for us when we need them. We’ve talked about funding issues, customer issues, how to minimize risk, potential customers. SV has a window on the world – they know what’s happening, they provide us not only with leads and contacts, but also with strategic knowledge of where the industry is going – a general marketplace perspective that we couldn’t otherwise get.”

– Randy Barko, Ximedica CEO

There is no shortage of outsourced medical device design or engineering firms. What made Ximedica stand out? Talent, scale and culture, says SV managing partner Paul LaViolette.

“Although there are many companies doing outsourced device R&D, most are small – groups of good engineers who’ve set up shop and built $1 – 2 million in revenue,” he says. “But Ximedica was different. It had a 20-year history. The company had reached significant revenue, achieved profitability and overcome myriad barriers that prevent most companies from achieving such scale.

“It is also just a cool and impressive group of people. Ximedica has a real design culture, along with engineering, with strong ties to the Rhode Island School of Design. It is the kind of company where talented people want to work.

“In the medical device space, we look for unique growth assets, and Ximedica gave us that.”

LaViolette knew of the firm from his days as Chief Operating Officer for Boston Scientific, a Ximedica client. But it was a mutual friend that later brought him together with the founders. Meetings – purely shop-talk at first – developed into an informal advisory relationship, and didn’t become more formal until 2012, when the founders were ready to write their next chapter of growth.

“The founders had already made a great move when they brought in Randy Barko as CEO to tighten up operations as a step toward growth or exit,” LaViolette says. “But there was no formal governance or growth strategy – the structure was a private partnership. The more we talked, the more we recognized a vital role here for SV. What Ximedica needed – establishing systems, creating diversification strategies, accelerating bold expansion moves – is what we do. And the opportunity was clear – Ximedica was the absolute best asset of scale in a large fragmented market growing at 20 percent, and they were at a key inflection point. This created a powerful and proprietary opportunity for SV.”

“We helped the team create a new corporate structure, established a board of directors and got to work on multiple expansion opportunities. We helped Ximedica expand the management team, diversify the client base and make acquisitions.

“We tried to bring our skills to the table while otherwise staying out of their way,” LaViolette says. “At times we provided guidance, other times simply reassurance – if you want to move in this direction, go for it. We helped the Ximedica team think bigger and we enabled them to shine. This management team has immense capacity. We aimed to be supportive while staying out of their way.”

Healthcare

April Anthony's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“Gene Hill is someone who has been around the block, both running his own companies and as an investor. He was a tremendous help. The venture partners don’t try to manage the business. You get the sense they like what they’re doing – that helps you be very open about your challenges. I could trust that I could share my problems without the fear I would face a set of directives on how to solve them.”

– April Anthony, Homecare Homebase CEO

As the population ages and as healthcare costs rise, payers and providers seek alternatives for care delivery – for example, home care and home hospice. That’s the opportunity targeted by Homecare Homebase. The company provides best-in-class information technology support for homecare and home hospice providers, who are themselves under ferocious cost pressures.

The handheld solution developed by Homecare Homebase gives homecare field staff a cost-effective alternative to laptop-based offerings for data collection and data management. The company’s solution is the result of real-world experience – Homecare Homebase’s world class management team has an extensive homecare background. April Anthony, Founder & CEO, has over 25 years of experience as an innovator and entrepreneur in the home health care field, having founded and led three successful homecare-related companies over the course of her career. The industry has responded enthusiastically to the company’s solution, which is purpose-built, based on the team’s industry domain knowledge; Homecare Homebase has a 25 percent market share and is highly rated by research leader KLAS.

SV came to the table to help grow Homecare Homebase and guide the company to exit. Our own experience in homecare and home hospice investing made us an effective match for the company’s needs. SV Chairman Eugene Hill became an active board member – and oversaw an eightfold increase in EBITDA in just three years. The performance surge paid off. In 2013, Homecare Homebase was sold to the Hearst Corporation for $625 million. April Anthony continues to run the company as CEO of Hearst Health’s Homecare Homebase line of business.

Healthcare

Jim Glynn's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“When I looked to fund my new venture, Jet Health, Tom Flynn was the first person I reached out to. He and SV have been terrific partners from the start. Within a few weeks of our initial discussion, the SV professionals had a list of ten potential acquisition targets that met the profile we identified, that would enable us to enter the skilled home health business. Within four months of starting the project, we signed a letter of intent with our first acquisition target, and we closed that transaction shortly thereafter. Along the way, I felt like I had a team of dedicated professionals to support me – through diligence, legal counsel, debt sourcing and capital expansion. And that same level of support remains in place as we continue to build the platform.”

– Jim Glynn, Jet Health CEO

A push to reduce healthcare costs, strong patient preference for at-home care, and an aging population – all these factors are driving demand for home health services. Among the companies striving to meet the demand is Jet Health. The company is a full-service, Medicare-certified home health platform. It provides skilled nursing, therapy, rehabilitative care, medical social services, personal care, and companion services to 1,300 patients in Texas, New Mexico and Colorado.

Jet Health was on SV’s radar thanks to managing partner Tom Flynn, who has known Jet Health CEO Jim Glynn for over a decade. Jim is a seasoned, highly accomplished home health care executive. He has deep expertise in building, acquiring, and growing home health care and home infusion businesses. Tom had backed Jim as the CEO of Amerita, Inc., a specialty home infusion provider. After Jim sold the business to a strategic acquirer, he expressed interest in working with Tom again. The result was that Jim joined SV as a venture partner in the fall of 2015.

Jim continued to see the market opportunity in home health. SV helped him develop and refine an investment thesis. The plan was to build a premier regional home health company that championed local brands and operating expertise, while sharing best practices and leveraging centralized corporate functions. We worked with Jim to identify and evaluate dozens of potential investment opportunities in home health. The search went on for over three months before we found our first acquisition – a business that served as a platform for the creation of Jet Health. Founded in 2006 and based in Fort Worth, Texas, the target was a clinician- and founder-led home health company that had been growing at more than 20 percent year over year, and was looking for a partner to help it scale. The acquisition closed in April 2016. Jet Health quickly became the foundation for the acquisition of other home health services companies.

As part of the transaction, and to support Jim’s vision for the platform, we recruited a co-investor and brought in a lender to provide financing support. Since then, SV has helped Jim build an executive team and board. Tom Flynn joined as chairman. We have supported Jim in developing and executing a growth plan, and we have assisted in various business development and partnership initiatives. Most recently, we sourced an add-on acquisition, a Colorado-based home health business, to the Jet Health platform.

Jet Health grew revenue more than 20 percent in the first year following SV’s initial investment. Today the Jet Health team is focused on developing new programs and service offerings, and is actively pursuing additional acquisition targets.

Healthcare

Eric Schweiger's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“We started to look for outside capital, and fairly quickly, we had multiple offers. SV’s wasn’t the highest – but it was the one we chose. Unlike some of the firms we spoke with, SV was a healthcare specialist, not a generalist. And out of all the firms, SV stood out for the quality of the team – the depth of their knowledge and the depth of their relationships. They’ve been a great partner, not just on the financial side but also in populating the board and in helping us meet business challenges. Bruce Cerullo, an SV venture partner, has been a mentor to me – he’s a proven company-builder and his experience has been invaluable. At the same time, there’s a lot of freedom in the relationship – SV doesn’t interfere with our running the business.”

— Dr. Eric Schweiger, Founder and CEO, Schweiger Dermatology Group

People go into medicine for many reasons – to help, to heal, to have a profession, and to be independent. Doctors in private practice face multiple challenges – not only treating patients but also running small businesses.

Not all of them like both challenges equally well. For many, the business side is a burden. For Dr. Eric Schweiger, it turned out to be an opportunity. Just a few years after starting his dermatology practice – at a time when he was just beginning to expand beyond a single office – Eric realized it was business that really motivated him. He decided that the fastest way to expand was not to open new offices, but instead to buy existing dermatology practices with already-established patient bases. His goal was a win-win: pay fair value, take over practice management and marketing, and let the dermatologists focus entirely on their patients.

Schweiger Dermatology Group (SDG) began acquiring practices in 2014 – and quickly realized it needed outside assistance, both to raise capital and to help systematize the business. SV became SDGs private equity partner later that year, arranging an initial equity funding round and providing management expertise. For example, SV venture partner Bruce Cerullo and managing partner Tom Flynn helped SDG create a professional management structure, add service lines, establish an in-house pathology lab, and expand staffing to include mid-level clinicians in order to increase leverage in the business model. SV worked with Schweiger to launch innovative online marketing programs designed to attract younger patients.

SV saw the same potential that Eric did – because dermatology is uniquely suited to an extended practice management model. While older dermatologists maintain solo practices, younger practitioners seek group practice opportunities. Resources are mismatched to demand – solo practitioners generally don’t hire other dermatologists, physician assistants or nurse practitioners. Practices are often inefficient and tend not to maximize profits. A multi-practice business has the potential to attract younger providers, put them where the patients are, and maximize revenue, efficiency, and quality of care.

Schweiger Dermatology Group’s performance shows that both Eric and SV were right to be optimistic. SDG revenues grew eightfold over a three-year period.  It now operates in over 25 locations In the New York metropolitan area, with over 100 providers and 420 employees. SDG was ranked in the top 20 percent (809th) of the 2017 Inc. Magazine 5000 list of the fastest-growing private companies in America.

Plans call for continued expansion in and around New York, and then in adjoining states. SV will be on hand to help meet the ongoing challenges: recruiting and retaining the best providers, serving as a business advisor and sounding board, and ensuring that capital is in place to fuel SDG’s continued growth.

Biotechnology

Simon Tate's Story

These company creators are developing the next wave of breakthrough compounds.

“When GSK decided to go in a different strategic direction and move away from neuroscience, our team needed a way forward. SV provided it for us. Clive Dix knew us well from his tenure at GSK – he understood the potential. Clive and his SV colleagues joined us at the table, rolled up their sleeves and we all got to work. Because SV knew the industry, they were able to create the financial structure – through multiple stages – necessary for us to get our compounds through clinical trials. They were there when we needed them – they were a sounding board for operational and clinical issues as well as financial issues. But they also gave us a free hand to conduct the research and development as we saw fit. And they helped us structure the right exit – one that met our needs and did justice to our work. We couldn’t have asked for more in a strategic partner.”

– Simon Tate, Convergence CEO

Treatment of neuropathic pain – in such common afflictions as neuralgia and sciatica – is a major challenge for practitioners. Topical treatments have limited effectiveness, and systemic therapies can lead to serious adverse effects.

The neuropathic pain team at UK biotech giant GSK, led by Simon Tate, was one of the early innovators in the field. But in 2010, GSK decided to close its neuroscience business.

This closure of neuroscience presented SV with the opportunity to spin out the team and create a new company dedicated to novel analgesics. It came to us thanks to Clive Dix, who had been CEO of one of our portfolio companies, DNA-based vaccine developer PowderMed. Earlier in his career, Clive had been UK Research Director at GSK, where he’d recruited Simon to build the neuropathic pain team.

At the time, Simon’s team had two promising drugs in pre-clinical phases – a sodium channel blocker and a calcium ion channel moderator. SV met with Clive, Simon and the team to chart a way forward and move the drugs into clinical trials. We established required financing levels, set milestones for drawing down cash, and set the key value reflection points for potential investors. We brought in two other VCs as co-investors in $35 million in Series A funding, and negotiated terms with GSK to give them an interest in the future of the new company. The reward structure clinched the deal and the new company, called Convergence, was spun out in 2010.

SV continued to work hands-on with Convergence, providing strategic counsel during the development of a significant proof of concept study for the sodium channel blocker. In the groundbreaking Phase 2 Trigeminal Neuralgia and Sciatica study, the treatment demonstrated exceptional efficacy and safety – it led to a 53 percent decrease in pain sensitivity (vs. 18 percent for placebo) and a 60 percent average reduction in the number of paroxysms (vs. 12 percent for placebo). The treatment is now in Phase 2b/3 trials. After four years of hands-on work by Clive and the SV team, we structured the acquisition of a portfolio of Convergence assets by Biogen Idec for up to $675 million (based on future milestones) in January 2015.

Medical Devices

Randy Barko’s Story

Innovators whose technologies are improving lives.

“We’d investigated a couple of different options – two that were strategic, and two that were financial. SV was the most attractive to us because their view was to support us and let us run as we were running – they’d let us execute our business strategy and run the business. They didn’t want to micromanage us, and they didn’t want to turn us into just another financial play, where we’d lose the innovation and lose what made the company successful.”

“They’re there for us when we need them. We’ve talked about funding issues, customer issues, how to minimize risk, potential customers. SV has a window on the world – they know what’s happening, they provide us not only with leads and contacts, but also with strategic knowledge of where the industry is going – a general marketplace perspective that we couldn’t otherwise get.”

– Randy Barko, Ximedica CEO

There is no shortage of outsourced medical device design or engineering firms. What made Ximedica stand out? Talent, scale and culture, says SV managing partner Paul LaViolette.

“Although there are many companies doing outsourced device R&D, most are small – groups of good engineers who’ve set up shop and built $1 – 2 million in revenue,” he says. “But Ximedica was different. It had a 20-year history. The company had reached significant revenue, achieved profitability and overcome myriad barriers that prevent most companies from achieving such scale.

“It is also just a cool and impressive group of people. Ximedica has a real design culture, along with engineering, with strong ties to the Rhode Island School of Design. It is the kind of company where talented people want to work.

“In the medical device space, we look for unique growth assets, and Ximedica gave us that.”

LaViolette knew of the firm from his days as Chief Operating Officer for Boston Scientific, a Ximedica client. But it was a mutual friend that later brought him together with the founders. Meetings – purely shop-talk at first – developed into an informal advisory relationship, and didn’t become more formal until 2012, when the founders were ready to write their next chapter of growth.

“The founders had already made a great move when they brought in Randy Barko as CEO to tighten up operations as a step toward growth or exit,” LaViolette says. “But there was no formal governance or growth strategy – the structure was a private partnership. The more we talked, the more we recognized a vital role here for SV. What Ximedica needed – establishing systems, creating diversification strategies, accelerating bold expansion moves – is what we do. And the opportunity was clear – Ximedica was the absolute best asset of scale in a large fragmented market growing at 20 percent, and they were at a key inflection point. This created a powerful and proprietary opportunity for SV.”

“We helped the team create a new corporate structure, established a board of directors and got to work on multiple expansion opportunities. We helped Ximedica expand the management team, diversify the client base and make acquisitions.

“We tried to bring our skills to the table while otherwise staying out of their way,” LaViolette says. “At times we provided guidance, other times simply reassurance – if you want to move in this direction, go for it. We helped the Ximedica team think bigger and we enabled them to shine. This management team has immense capacity. We aimed to be supportive while staying out of their way.”

Healthcare

April Anthony's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“Gene Hill is someone who has been around the block, both running his own companies and as an investor. He was a tremendous help. The venture partners don’t try to manage the business. You get the sense they like what they’re doing – that helps you be very open about your challenges. I could trust that I could share my problems without the fear I would face a set of directives on how to solve them.”

– April Anthony, Homecare Homebase CEO

As the population ages and as healthcare costs rise, payers and providers seek alternatives for care delivery – for example, home care and home hospice. That’s the opportunity targeted by Homecare Homebase. The company provides best-in-class information technology support for homecare and home hospice providers, who are themselves under ferocious cost pressures.

The handheld solution developed by Homecare Homebase gives homecare field staff a cost-effective alternative to laptop-based offerings for data collection and data management. The company’s solution is the result of real-world experience – Homecare Homebase’s world class management team has an extensive homecare background. April Anthony, Founder & CEO, has over 25 years of experience as an innovator and entrepreneur in the home health care field, having founded and led three successful homecare-related companies over the course of her career. The industry has responded enthusiastically to the company’s solution, which is purpose-built, based on the team’s industry domain knowledge; Homecare Homebase has a 25 percent market share and is highly rated by research leader KLAS.

SV came to the table to help grow Homecare Homebase and guide the company to exit. Our own experience in homecare and home hospice investing made us an effective match for the company’s needs. SV Chairman Eugene Hill became an active board member – and oversaw an eightfold increase in EBITDA in just three years. The performance surge paid off. In 2013, Homecare Homebase was sold to the Hearst Corporation for $625 million. April Anthony continues to run the company as CEO of Hearst Health’s Homecare Homebase line of business.

Healthcare

Jim Glynn's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“When I looked to fund my new venture, Jet Health, Tom Flynn was the first person I reached out to. He and SV have been terrific partners from the start. Within a few weeks of our initial discussion, the SV professionals had a list of ten potential acquisition targets that met the profile we identified, that would enable us to enter the skilled home health business. Within four months of starting the project, we signed a letter of intent with our first acquisition target, and we closed that transaction shortly thereafter. Along the way, I felt like I had a team of dedicated professionals to support me – through diligence, legal counsel, debt sourcing and capital expansion. And that same level of support remains in place as we continue to build the platform.”

– Jim Glynn, Jet Health CEO

A push to reduce healthcare costs, strong patient preference for at-home care, and an aging population – all these factors are driving demand for home health services. Among the companies striving to meet the demand is Jet Health. The company is a full-service, Medicare-certified home health platform. It provides skilled nursing, therapy, rehabilitative care, medical social services, personal care, and companion services to 1,300 patients in Texas, New Mexico and Colorado.

Jet Health was on SV’s radar thanks to managing partner Tom Flynn, who has known Jet Health CEO Jim Glynn for over a decade. Jim is a seasoned, highly accomplished home health care executive. He has deep expertise in building, acquiring, and growing home health care and home infusion businesses. Tom had backed Jim as the CEO of Amerita, Inc., a specialty home infusion provider. After Jim sold the business to a strategic acquirer, he expressed interest in working with Tom again. The result was that Jim joined SV as a venture partner in the fall of 2015.

Jim continued to see the market opportunity in home health. SV helped him develop and refine an investment thesis. The plan was to build a premier regional home health company that championed local brands and operating expertise, while sharing best practices and leveraging centralized corporate functions. We worked with Jim to identify and evaluate dozens of potential investment opportunities in home health. The search went on for over three months before we found our first acquisition – a business that served as a platform for the creation of Jet Health. Founded in 2006 and based in Fort Worth, Texas, the target was a clinician- and founder-led home health company that had been growing at more than 20 percent year over year, and was looking for a partner to help it scale. The acquisition closed in April 2016. Jet Health quickly became the foundation for the acquisition of other home health services companies.

As part of the transaction, and to support Jim’s vision for the platform, we recruited a co-investor and brought in a lender to provide financing support. Since then, SV has helped Jim build an executive team and board. Tom Flynn joined as chairman. We have supported Jim in developing and executing a growth plan, and we have assisted in various business development and partnership initiatives. Most recently, we sourced an add-on acquisition, a Colorado-based home health business, to the Jet Health platform.

Jet Health grew revenue more than 20 percent in the first year following SV’s initial investment. Today the Jet Health team is focused on developing new programs and service offerings, and is actively pursuing additional acquisition targets.

Healthcare

Eric Schweiger's Story

Change agents operating at the center of healthcare reform, quality improvement and cost containment.

“We started to look for outside capital, and fairly quickly, we had multiple offers. SV’s wasn’t the highest – but it was the one we chose. Unlike some of the firms we spoke with, SV was a healthcare specialist, not a generalist. And out of all the firms, SV stood out for the quality of the team – the depth of their knowledge and the depth of their relationships. They’ve been a great partner, not just on the financial side but also in populating the board and in helping us meet business challenges. Bruce Cerullo, an SV venture partner, has been a mentor to me – he’s a proven company-builder and his experience has been invaluable. At the same time, there’s a lot of freedom in the relationship – SV doesn’t interfere with our running the business.”

— Dr. Eric Schweiger, Founder and CEO, Schweiger Dermatology Group

People go into medicine for many reasons – to help, to heal, to have a profession, and to be independent. Doctors in private practice face multiple challenges – not only treating patients but also running small businesses.

Not all of them like both challenges equally well. For many, the business side is a burden. For Dr. Eric Schweiger, it turned out to be an opportunity. Just a few years after starting his dermatology practice – at a time when he was just beginning to expand beyond a single office – Eric realized it was business that really motivated him. He decided that the fastest way to expand was not to open new offices, but instead to buy existing dermatology practices with already-established patient bases. His goal was a win-win: pay fair value, take over practice management and marketing, and let the dermatologists focus entirely on their patients.

Schweiger Dermatology Group (SDG) began acquiring practices in 2014 – and quickly realized it needed outside assistance, both to raise capital and to help systematize the business. SV became SDGs private equity partner later that year, arranging an initial equity funding round and providing management expertise. For example, SV venture partner Bruce Cerullo and managing partner Tom Flynn helped SDG create a professional management structure, add service lines, establish an in-house pathology lab, and expand staffing to include mid-level clinicians in order to increase leverage in the business model. SV worked with Schweiger to launch innovative online marketing programs designed to attract younger patients.

SV saw the same potential that Eric did – because dermatology is uniquely suited to an extended practice management model. While older dermatologists maintain solo practices, younger practitioners seek group practice opportunities. Resources are mismatched to demand – solo practitioners generally don’t hire other dermatologists, physician assistants or nurse practitioners. Practices are often inefficient and tend not to maximize profits. A multi-practice business has the potential to attract younger providers, put them where the patients are, and maximize revenue, efficiency, and quality of care.

Schweiger Dermatology Group’s performance shows that both Eric and SV were right to be optimistic. SDG revenues grew eightfold over a three-year period.  It now operates in over 25 locations In the New York metropolitan area, with over 100 providers and 420 employees. SDG was ranked in the top 20 percent (809th) of the 2017 Inc. Magazine 5000 list of the fastest-growing private companies in America.

Plans call for continued expansion in and around New York, and then in adjoining states. SV will be on hand to help meet the ongoing challenges: recruiting and retaining the best providers, serving as a business advisor and sounding board, and ensuring that capital is in place to fuel SDG’s continued growth.