14 Mar Successful Wisconsin VC sets sights on data integration and mass storage
Trevor D’Souza finds treasures in decidedly unromantic spots like little beige offices and IT industry conferences. A managing director at Milwaukee-based private equity firm Mason Wells, he is the sleuthing type.
And though Mason Wells typically devotes its IT venture capital to unknown startups with huge growth potential, D’Souza likes to beat the bushes at events such as the recent Fusion CEO-CIO Symposium at Madison’s Fluno Center because one never knows when an established corporation might be spinning out a unit in need of startup cash.
“We have enough companies to invest in – it’s a combination of people that come to us and people we go out and find,” said D’Souza when asked if Mason Wells has had luck finding local companies within its target market. “As an early-stage investor, why would I come to this conference? I might be looking for a technology that a large corporation wants to spin out. So I find this stuff in unusual places, and that’s what I do. I don’t wait around for a business plan to fall on my desk with all the boxes checked off.”
Milwaukee-based medical information technology company TeraMedica is among Mason Wells’ success stories. The company offers informatics products such as Evercore, which captures data from imaging devices, stores them and then makes them accessible at the point of patient care across an enterprise.
Vice President of Marketing Paul Markham said attracting the attention of a venture capital firm is really about being distinctive, knowing your target market and offering the investor a return on their risk. In TeraMedica’s case, the target market is a rich and growing area that is only going to get bigger as health care providers push to not only digitize all kinds of information from MRIs to lab results but also to integrate the information so that providers have ready access to it.
“You have to prove that you deserve to be there,” Markham said of attracting a VC’s attention. “You’ve got to have quantifiable prospects, basically. That’s probably the key to the whole thing.”
During his portion of a session called “Where is the Money?” at Fusion, D’Souza said Mason Wells, for its part, prefers investing in software products over hardware and applications over infrastructure. In particular, three hot spots are in Mason Wells’s crosshairs: convergence of multiple technologies, such as handheld devices and wireless fidelity (wi-fi), mass data storage and data integration.
The mass data storage needs of health care providers looking to convert paper files to electronic medical records (EMRs) is staggering. D’Souza noted during his speech that a simple test file in a clinical data system typically requires 100K to 250K of memory. But venture into the imaging realm, and a single image can run up to 10 MB. One procedure can demand up to 750 MB. And then there’s genomics information: the data generated to create just one optical map file can eat up to 1 terabyte of memory.
As critical as storage is, of the three hot spots, data integration (for example, integrating widely disparate data at hospitals) is the hottest, in D’Souza’s opinion.
“We’re talking about structured and unstructured data,” he said. “It’s not always intuitive what all data integration encompasses.”
Integrating the information across a health care provider’s enterprise is tricky because they were not originally set up as enterprises at all, Markham said.
“There is a market need – medical information technology is extremely disconnected,” Markham said. “If we want better health care, we need better information. Health care is very late to the table. There’s a market rejuvenation with electronic health records. That’s really where we’re focusing right now.”
By investing in companies such as TeraMedica, Mason Wells has shown a good deal of prescience. And that’s one thing even entrepreneurs with a slam-dunk idea should remember – smart investors can make good ideas even better.
“Besides being a practitioner, I’m also a student of venture capital, and a lot of the very successful companies did not start up with the business plan that they ultimately ended up with,” D’Souza said. “It’s not even that it changed over time; it changed in the VC’s office. It is never a case in my view that you’ve got a business plan and that’s it. There’s usually some tweaking to it.”