It’s a cliche in the venture capital industry that VC firms offer much more than money to their portfolio companies.
But it’s certainly true that venture firms routinely provide their companies with networking opportunities, introductions to key opinion leaders, domain expertise and business development assistance, in general.
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A new Cincinnati venture fund that’s been launched to invest in products and services for the elderly market will offer its portfolio companies more than just that, however. Linkage Ventures was spun out of a nonprofit organization called Linkage that boasts 600 members, primarily nursing homes and assisted-living facilities, and it’s that membership network that could be a huge boon to companies that the fund invests in.
While startups are fine-tuning their products, Linkage’s network of long-term care providers can act as test sites to provide quick feedback, and speed up and ease the product validation process. Then, once those products hit the market, the network of Linkage members could represent a big bucket of early customer wins as portfolio companies look to build a market for their products.
“One of our advantages is that we can help take a product through beta testing within our membership group,” said John Hopper, an entrepreneur and attorney who’s managing director of Linkage Ventures. “That not only provides an efficient and effective product validation path, but it also will help a company figure out if it needs to pivot on its approach to get good traction in the aging marketplace.”
Linkage Ventures is still in the process of forming a fund and expects to close it by the end of the year. The eventual size of the fund is undetermined, but Hopper projects that it’ll be between $10 million and $20 million.
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He envisions investing in startups as well as more established companies looking to expand their businesses. But Linkage portfolio companies must have a product or service that serves the aging population. That could range from a medical device that treats a disease common among the elderly to a technology platform that enables communication among seniors and their families.
With 65 and over being the fastest-growing age demographic in the U.S., Linkage’s portfolio companies figure to have no shortage of potential customers.
State-supported venture development group CincyTech will help Linkage Ventures analyze investment opportunities and manage due diligence.
[Photo from flickr user laRuth]