“Double Bottom Line” Investing
NextStep Ventures takes a “double bottom-line” approach to healthcare investments – we aim to generate returns for investors while having a positive impact on children’s health by addressing areas of high unmet need.
Our investment objective is to construct a diversified portfolio of pediatric healthcare companies that address congenital and childhood onset syndromes, neurodevelopmental disorders and rare diseases. Within these areas, we will target high-impact opportunities which can be de-risked early to create sustainable, profitable businesses. We aim to address all sector-relevant aspects of innovation, such as biopharma, diagnostics, digital health, and medical devices. We will invest primarily within the US but will also consider companies based in Canada, Israel, Europe, and elsewhere.
While NextStep is a traditional venture fund which takes investments from traditional limited partners (LPs), we also take investments from Donor Advised Funds who find our double bottom line approach compelling. If you are investing funds from your DAF, gains will return to your DAF.
An example of the kind of double bottom-line investing we make is Eclipse Regenesis, a seed stage company with a promising solution for children with Short Bowel Syndrome (SBS). SBS is a devastating, incurable disease where the small intestine is too short to absorb sufficient nutrients to sustain life. Up to 40% of children die before age 3.
Eclipse offers a first-in-class device called Eclipse XL1, which could restore sufficient absorption for these children and save lives. Treatment of Small Bowel Syndrome is a highly viable business, with a $10B+ worldwide annual cost of care but falls under the radar of traditional VC investors due to the small population. Once de-risked at the seed stage, Eclipse should be able to grow into a highly profitable company that significantly improves quality of life for those children affected by Short Bowel Syndrome.
How We Are Different
NextStep Ventures is structured as a traditional venture fund. However, NextStep also offers Donor Advised Funds an avenue to invest their capital, with returns passing through back to the investor DAFs.
NextStep Ventures differs from traditional venture capital funds because we have a “double bottom line”approach which combines returns with impact. Therefore, we will invest in companies which can offer the potential to significantly improve quality of life for children, if they are able to build profitable solutions for their target patients.
Our approach differs from traditional philanthropy because we are focused on profitable investing, in addition to social impact. NextStep brings the best practices of venture capital and private enterprise to catalyze change. Unlike traditional philanthropy, we remain deeply involved with the projects in which we invest, and those teams have fiduciary duty back to NextStep because we become shareholders in the projects. In larger investments, NextStep will take a board seat to help with governance for these young companies.
Forms of Investment
NextStep makes investments of $100K to $1M in pre-seed and seed-stage rounds of companies created to commercialize research discoveries aligned with the NextStep mission. NextStep also makes grants of up to $100K to research which has significant translational potential.