White Paper: Life Science Impact Investing and the Physician Entrepreneur

Why Is Life Science Impact Investing So Crucial For Physicians Today?

A high paying role with a prestigious title in medicine is no longer enough. It’s not enough in many ways. The path of throwing yourself into research and digging through constant daily business challenges as an entrepreneur in the health space isn’t for everyone either. Impact investing has become not only an answer, but an essential part of the solution for many of these things which gnaw at the back of your mind, and cause that friction like a grain of sand in an oyster.

When A Medical Degree Isn’t Enough

It used to be that finishing a medical degree and your residency was the pinnacle of achievement. It was often the apex of accomplishment for a whole family and generations to see one member make it as a doctor. The finances were great too. You’d be set. You’d be living out your maximum potential and impact.

That may not be the case today.

You may be making over $300,000 a year, with plenty of perks. Despite the many frustrations of the system, you may find fulfillment in what you do. There are probably plenty of gaps and voids.

Are you really on track to where you need to be financially? Do you have enough discretionary time? Are you making an impact anywhere close to your full potential?

The average physician just isn’t making enough, saving enough, and investing well enough to build real wealth and confidence in a stable financial future. They are continually dealing with inefficiencies every day. There is so much that could be done to impact the world for the better.

The Need to Invest Better

being a millionaire is no longer an accomplishmentAs Grant Cardone says, being a millionaire is no longer an accomplishment. In fact, via Instagram, he calls it an insult. It’s barely middle class. It is not a badge of achievement for a lifetime of work. As I’ve discussed in Forbes, for medical professionals to be able to retire, retire well and to have peace of mind about their future and legacy, they need to be thinking at least $5M and $10M big.

It takes money to have a significant impact today too. Those that have made some of the biggest contributions to technological advancements, healthcare, and philanthropic efforts are also our most notable investors and entrepreneurs. When you think about Warren Buffett, Mark Zuckerberg, and Bill Gates, they’ve not only amassed the most billions but have each given tens of billions of dollars too. You’re not going to Mars, curing cancer, solving the water or food crisis, or making leaps in preventative and affordable healthcare without significant private investments.

Traditional stock market investing, bonds, and 401ks and bank accounts continue to setup even high-income earners like medical professionals for disaster. We need multiple streams of income, tax-smart investments, and rocketship growth potential in our portfolios.

More than ever, we need to be doing good with our money. If not to be in alignment with our values, but because other investments are increasingly coming under fire from new regulations and peer pressure in our evolving culture. According to Barron’s, impact investing has become as profitable if not even more so than those not striving to be socially conscious. Barron’s reports the aggregate compound yearly gains for impact investing funds at 13%. Market Watch and Morningstar say that is actually as high as over 19% and have rated half of social impact funds with at least a ten year track record among the top 35% of fund performers.

Making A Difference at Scale

There is only so much you can do as an individual physician. Even if you have a good-sized team in a specialized practice or top hospital, your impact and reach are limited by the patients you can touch. You may have one of the most critical roles in the world. You may be saving lives every day, but you can only save so many. You can only physically practice and be in surgery for so long. Such was the story of Saeju Jeong, whose doctor father told him to go into entrepreneurship instead of following his footsteps. Saeju has since raised $100M for a health tech app from some of the most notable VC-level investors.

Today’s connectedness means that new inventions and improvements in efficiency can be rolled out on a scale of billions of people, but it takes entrepreneurs willing to eat ramen for a long time, hear many rejections, and capital to fund them.

Do What You Love & Were Born to Do

There are entrepreneurs dramatically changing the technology used in medicine, the DNA of the healthcare insurance space, and efficiencies in delivering care. That side of creating change isn’t for everyone. It can be grueling. Some thrive on it; most don’t.

Do what you love and were born to do. Work in your zone, whether that is as a health tech entrepreneur, CEO, and business owner, doctor, or nurse. Then multiply your impact while securing your financial future through impact investing.

How to Do It?

One way to do this is as an angel investor. You can try to do it alone. It’s tough and very demanding on your time. You have to evaluate thousands of pitches and opportunities to pick a winner or two. You have to complete thorough due diligence and continue to advise your investments. This can be a major time drain and require experience on the business side of things you don’t have. You may have to help them raise hundreds of millions of dollars to see the venture through and get your capital back.

Key considerations when investing

The other option is to work with systems and organizations that already have this down to a science, like the VIC Investor Network. They pool capital from other accredited investors, create the financial power to push things forward and make them work, have top-level advisors and connections to handle the business side. You put in your capital, you get the rewards financially, and knowing you helped make something happen at scale, while they do the hard work for you.

How will you do impact investing?


References:

https://www.barrons.com/articles/dont-call-it-charity-1533565575

https://www.marketwatch.com/story/critics-of-esg-funds-are-wrong-sustainable-investing-delivers-competitive-returns-2019-07-17

https://alejandrocremades.com/saeju-jeong/