Venture Philanthropy for Child Health
NextStep Ventures combines philanthropy with the discipline of a venture investing approach. We invest philanthropic capital in startup companies looking to solve areas of high unmet need in children’s health and maternal-fetal medicine.
Our investment objective is to construct a diversified portfolio of pediatric healthcare companies that address maternal-fetal and neonatal needs, 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.
NextStep accepts grants from Donor Advised Funds and charitable 501(c)(3) foundations as program-related investments (PRI). The returns from successful investments will evergreen the NextStep fund, to be used in future investments.
An example of the kind of investment 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
While NextStep works with startups like other venture capital funds do, our investment decisions are guided by impact as well as commercial viability. The returns from successful investments “evergreen” the fund, rather than compensating the partners, or providing gains to our supporters. Legally, NextStep holds grants in a Donor Advised Fund (DAF), hosted on Impact Assets Platform (EIN #26-2048480).
Our approach differs from traditional philanthropy because NextStep brings the best practices of venture capital and private enterprise to maximize social impact. 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. Our preferred investment method is the SAFE instrument.