How investment decisions are made

As the investment arm of OSF HealthCare, OSF Ventures sources, vets and performs due diligence on hundreds of possible health care solutions every year. The goal is to ensure the devices, technology and services we invest in enhance the patient experience, improve patient outcomes, reduce the cost of care or help meet any other Ministry objective.

At the end of our process, we prepare a comprehensive summary of each opportunity. But we don’t make the final decision. Behind every good investment arm of a health care system is a group that ultimately decides whether to invest in a company and its product.

For OSF HealthCare, that Ventures Committee is made up of top leaders and executives from across the Ministry, including Sister Diane Marie McGrew, Sister Agnes Joseph Willams and Sister M. Mikela Meidl; Chief Executive Officer, Bob Sehring; Chief Strategy Officer, Michelle Conger; Chief Financial Officer, Mike Allen; President of OSF Medical Group, Jeffry Tillery and four non-voting members.

With insight into the strategy and a vision for the future of OSF, this group determines whether to move forward on different solutions.

The Ventures Committee

Before the Ventures Committee reviews an opportunity, OSF Ventures has significantly reduced the number of companies that make it to the final stage. This is done by interviewing clinical and non-clinical subject matter experts, gaining feedback and completing deep diligence on solutions that are most likely to succeed within OSF and other health care systems.

All of this information is assembled into an extensive document that includes a recommendation for investment. That summary is shared with the Ventures Committee in advance of a vote. Selected companies are then asked to present directly to the committee and answer any questions members may have.

“I look at companies with the lens of whether their product really meets an identified need within our Ministry or if it’s a solution looking for a problem,” said Jeffry Tillery, president of the OSF Medical Group. “There are so many great ideas and passionate inventors, but if their solution doesn’t solve a relevant problem or improve the delivery of health care, it’s going to have an uphill climb to build a business and gain any market share.”

The committee also considers a multitude of other factors such as the competency of a company’s leader, whether there are competing solutions, possible lead investors, the company’s ability to grow and its exit strategy.

“While we have had a few of these companies go out into the public sector with IPOs on the Stock Exchange, most of these startups will be acquired by larger entities,” Dr. Tillery said. “We’re always looking at the long-term strategy of a solution.”

Once the Venture Committee is satisfied with the responses they’ve received to their questions, they vote on the recommendation of OSF Ventures to invest in a company.

“It’s interesting to see how inventors’ minds work, especially those who are coming into the health care space from outside and have a different perspective of how they look at a problem and a potential solution,” said Dr. Tillery. “Many times, they come up with some really novel ideas that are eye-opening and have the potential to be a home run for OSF.”

Even after an investment is made, the Ventures Committee monitors the progress of our portfolio companies, keeps track of how solutions are being tested and implemented within the Ministry and makes decisions on follow-on investments.

Nearly batting 1000

Since the inception of OSF Ventures, the Ventures Committee has approved 26 out of 27 solutions recommended for investment.

“I think this speaks to the depth of the OSF Ventures’ work to vet, screen and bring forth a small array of potential investments. By the time we get to the consideration point, we have the information we need to make a final decision,” said Dr. Tillery. “The OSF Ventures team anticipates the questions we will have and is ready to answer them when needed.”

The high-level engagement of the Ventures Committee significantly contributes to the success of our program, not only before an investment but post investment. In return, they get insight into the evolution of health care technologies. It helps them understand the pace of the solutions coming into the market. And it helps them strategize where the Ministry should focus, what opportunities exist and how we can further our own innovation strategy.

Last Updated: February 11, 2022

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About Author: Stan Lynall

Stan Lynall, CPA, is the Vice President of Ventures Investments for OSF Ventures, the corporate venture program of OSF HealthCare. In this role, Stan identifies new technology that can positively impact those served by the Ministry. He also manages the diligence and venture investment process and maintains relations with the system’s portfolio investments and syndicate co-investors.

Before that, Stan founded and was the Managing Member of LMA Consulting, LLC, providing merger and acquisition services to private businesses. He also co-founded Central Illinois Angels, a nonprofit entity that provides early-stage investment opportunities for accredited angel investors. Stan is an honors graduate of the University of Illinois where he earned a Bachelor of Science degree in Accountancy. He is a Certified Public Accountant and is also a 2005 graduate of RSM’s Business Advisor Program conducted by the University of Chicago-Graduate School of Business.

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Categories: Innovation