| In one of the most comprehensive and candid post-mortems on a health startup I’ve read, Duncan Reece wrote about why he shuttered the dementia care startup, called Veronica Health, he’d been building quietly for the past couple of years. I caught up with him to learn more about his decision. |
| Veronica was built on the idea that combining clinical support for the patient with resources, tools and services for family caregivers could produce better outcomes and lower the cost of care for dementia patients. |
| The startup’s plan was to take that concept to community practices and scale it. Veronica would have a dementia specialist, but a lot of work would be done by social workers who would check on patients with a primary care doctor. It would get paid by Medicare Advantage plans — and they were indeed interested in the model after Veronica opened their eyes to the invisible costs of dementia, Reece told me. |
| The concept sounds like a winning one. I lived with my grandmother, who has dementia, for a year in 2023 and it was tough. I can only imagine how helpful caregiving support would have been for me and my family. |
| But Reece ultimately shut Veronica down before it ever started seeing patients. The team had set out to raise about $9 million, and it didn’t happen. That was in part because investors are skeptical of value-based health services companies, many of which have struggled or have yet to prove themselves, Reece said. |
| Plus, fundraising doesn’t come with a how-to manual. Reece, who co-founded Cohere Health, hadn’t led a fundraising round before. He said he could have moved faster with more confidence and made it clear that he was going to be the CEO. Investors need to feel like they’re in competition for you and your company, he said. |
| “You only have so many shots on goal when you run a financing process,” he said. “It’s important to be super organized, run a tight process, and make it super easy for investors to lean in and want to write you a check.” |
| There’s debate over whether venture-backed, tech-enabled health services startups can work. Services companies tend to require a ton of time and capital to get to scale, and their returns may not be as lofty as VCs want to see. But Reece has no doubt Veronica could have succeeded if he hadn’t made certain mistakes. It had a customer base, clinical credibility, and evidence for a business model — key ingredients he said are necessary for a startup. |
| Reece was angry when Veronica first closed. But he chose to share his experience because he wants other people to learn from his missteps and try tackling this dementia care problem. |
| “We need more open sourcing of what we learned, so folks have a better shot of making it," he said. |
| Reece is already working on his next startup, which will use AI to help doctors do the work they set out to do when they went to medical school, he said. |
| - Shelby |
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