EPISODE 55

Serving the "Silver Tsunami" - Alan Patricof & Abby Levy, co-founders of Primetime Partners

09-15-2020

We've all heard the U.S. population is aging, but even so, this is a pretty eye-popping statistic: 50% of people born in the U.S. in 2007 will live to be 100. Perhaps more surprising is the lack of products, services and experiences designed for older adults to help them live their "best lives." Filling that gap is the new focus for two veteran entrepreneurs and business leaders, Alan Patricof and Abby Levy, who joined forces this year to launch the investment firm Primetime Partners. As they explain to host Shiv Gaglani, they are finding plenty of founders who have ideas to serve the needs of this population -- from telehealth to support for caregivers to addressing financial issues -- who also want to serve a purpose. As Abby Levy puts it, "if we don't have a positive social impact, then we won't have succeeded either on the investing side or on the mission." Check out this episode for a fascinating glimpse into the future of senior living and what caregivers -- professional and otherwise -- should keep in mind as they interact with "the ageless generation."

Transcript

SHIV GAGLANI: Hi. I'm Shiv Gaglani. Today, on Raise the Line, I'm really happy to be joined by long-time Osmosis investor and advisor, Alan Patricof and his partner Abby Levy, two business leaders who have started a venture capital firm called Primetime Partners that's backing platforms and products for aging Americans and investing in older entrepreneurs. Alan was introduced to me by our other advisor and investor, Peter Frishauf, who founded Medscape, and we've had a really good relationship since then. 

He's sort of a legend in the venture capital community, having over a 50-year career of investing in category defining companies like America Online, Apple, and Office Depot. He was on the board of Thrive Global with Abby Levy, President of Thrive Global, a company co-founded by Arianna Huffington, a former Raise the Line guest, and she also served as an executive at SoulCycle, so she knows about the health and wellness space. Abby and Alan, thanks so much for being with us today.

ALAN PATRICOF: Thank you for inviting us.

ABBY LEVY: It's great to be here.

SHIV GAGLANI: I remember I was having breakfast in New York almost a year ago with Alan, who was talking about something that he was super excited to do, chapter three of his career, and talking you up a lot, Abby, as someone he couldn't wait to get into business with. I'd love to hear more about how you paired up and decided to launch Primetime Partners.

ALAN PATRICOF: Why don't you give them a background Abby and I'll fill in?

ABBY LEVY: Absolutely. Alan and I came to Primetime Partners through our own paths of being both curious and passionate about what happens in the third chapter of life. For me, the personal narrative was I'd been a health and wellness executive and had a personal story around trying to help my parents find more experiences and things to do. It became glaringly obvious that there were very few products, services and experiences designed for older adults to really help them live their best life during ages of 60+. That was how I came to the sector. 

Then I was speaking with a good friend of mine by the name of John Patricof -- you might recognize the last name -- John is one of Alan's sons. John and I went to graduate school together. When I told John I wanted to start a venture fund to invest in businesses in the space, he lit up and said, “This is actually what my dad wants to do.” Since I'd known Alan for the prior four years through our involvement together at Thrive Global, it was really a seamless kind of, I wouldn't say a match made in heaven, but since we've paired up this past November, things have really accelerated in quite a beautiful way. I'll let Alan share how he came to the sector.

ALAN PATRICOF: Mine was a different path. It really had two paths to it. One was the fact that my wife has had Alzheimer's for the last 11 years. The last three years have really been quite serious with full-time caregiving. In that process, I became very aware of all the services and products and things that were needed, not just to someone who had a chronic illness, but just as people aged. I got very aware of the caregiving aspect, supplies and services, and trying to figure out things to do for someone who was aging at home. That had been on my mind a lot. 

At the same time, I started reading so many articles that were coming out about what was happening to our older generation -- as I like to call them now, the “Ageless generation” -- which is the fastest growing part of the economy in the next 20 years and with enormous buying power. People are living longer, staying active, and living more vital lives. I’ve always said for the last 10 or 15 years, I was going to live to 114, and that's a story for another day, but I've been consistent about that objective. I do want to live that long, or even as long as the current expectation which is 100 years for the average person. It is a lot of years left to do things with, so that was one aspect.  

The other aspect that really was intriguing me was the fact that I knew a lot of people who were in their late 50s, early 60s, or even later who had built businesses or had big careers. They were coming to an end either through forced retirement or for some other reason, and it just seemed to me that...you know, I made my second career at 71. I'm now making my third career at 85. There are a lot of people around who are capable of starting other businesses, who've had successful careers. 

I wanted to see if I could be the poster child also for that generation, and I happened also to read that the success rate of entrepreneurs in their 60s was twice as high as those in their 30s, which was really remarkable. You never saw in a venture capital office presentation -- never is a long time -- but hardly ever, certainly, an older entrepreneur. They are usually in their 20s or 30s, so I had this dwelling within me, this excitement and interest, and all of a sudden, I found Abby was about to put it into place, and I said, “Wow!”. Within a matter of days or weeks, we agreed to get together, and Primetime Partners is what came out of it.

SHIV GAGLANI: That was something that always impressed me….the term “ageless” really defines you, Alan, and obviously what you're trying to do here. Abby, I don't know if you know this, but Alan came to Park City back in January for our board meeting, and we went skiing with Mitch Rothschild, who I know is an advisor of yours as well as ours at Osmosis, as well as Peter, and he went down a double black diamond trail. You were 84, 85 at that point, Alan?

ALAN PATRICOF: Yes. It wasn't that long ago. 

SHIV GAGLANI: Just a couple of months ago. Yes. You've been very active already. What are some examples of companies you've invested in, and how are you picking the next generation of companies? Is it mostly that you want to have people who are older than 50 as entrepreneurs? I'd love to hear more about your criteria.

ABBY LEVY: Just to give you a perspective, 50% of people born in 2007 will live to be 100 years old, so our definition of what numbers matter is really shifting as longevity is pushing us past 100 years old. I agree that it's amazing that Alan, at the age of 84, is doing that. At the age of 83, my dad is doing the same, and I think we're going to continue to see more and more older adults living very physically active and productive lives as well into their 80s and 90s in a way that we've never seen before. 

In terms of how we think about where we want to invest, I think we’re really aligned with what older adults care about. There've been plenty of studies that show they care about three major buckets: they care about their health, they care about their financial security, and they care about having meaningful experiences. So that is how we're kind of looking at the landscape...how we build along those lines -- the products, services, and businesses that solve those needs. In terms of the investments we've made, we only announced the fund in July, and prior to the announcement, there were so many wonderful companies and founders that we wanted to support that we actually made four investments in advance of announcing the fund that were for the purpose of the fund. In addition, we made two investments just in the past three weeks alone.

I'm happy to walk you through a few of them, but I think that the notion is to say, whereas a few years ago, I wasn't seeing as many entrepreneurs in this space, we are now starting to see many more entrepreneurs. Some of them are definitely a COVID bump of folks that are entrepreneurs who are looking for a business to start and are now more intrigued by how we help older adults, what's the new version of senior living, how can people age in place, and what we could do about people running out of their funds in terms of retirement incomes not stretching. We're seeing a lot more entrepreneurs tackling these problems. 

Some of the investments that we've made include a business called Retirable. Retirable is a digital financial advisor for Americans who have no financial plan. If you think about it, there are actually 50 million Americans who do not have a retirement plan, largely because they're not an attractive customer to the traditional Fidelitys and Schwabs of this world. Their assets fall beneath that, so Retirable solves that through a very efficient, digital solution as well as what I call a tele-advisory video service. 

The second business we invested in is a business called Tembo Health, which provides specialty telemedicine to nursing homes. So think of psychiatry, cardiology, and pulmonology, as well as urgent care. Telemedicine has become something that I think every American has become more attuned to since it became reimbursable through COVID. Now, especially for nursing homes where you don't want patients going in and out of the home, you bring the doctors in via telemedicine.

Another investment that was just announced yesterday, is in a business called Carewell. Carewell is a fantastic business that supports caregivers with the home health supplies they need. It is very scary when you're taking care of yourself, or a loved one, and you don't know what products you need, how to use them, and there’s a lack of community. So what Carewell does is really combine service plus commerce for this market. I could go on, but those are three of the six investments we've made to date, and we've seen tremendous growth in the pipeline.

SHIV GAGLANI: That's incredible. That's a good group of companies already. You only launched it in July, and it's two months later, and you've already made, you said, six investments. Our audience at Osmosis is mostly caregivers and clinicians -- people who are or who may wind up becoming specialists in geriatric care or become certified nurse assistants as well. Do you have any specific kind of criteria or advice for them about what they should be thinking about as the “silver tsunami”  comes down the pipeline?

ABBY LEVY: That is a great question. We've seen a few, I'd say, trends that I think they could be attuned to. One obviously is social isolation and the impact of social isolation on health. This has become something that I think the healthcare system actually now recognizes is a health driver versus a “nice-to-have”, so finding ways for people that you care about to stay connected to their loved ones, to meet other people, to connect to society at large for all the benefits that come with that...we've seen a lot of solutions that are attempting to work on that. 

In fact, one of the investments I didn't mention is a company called Bloom. It is a live video enrichment experience for older adults. It's kind of like if MasterClass and online dating had a baby, this would be Bloom, so we've seen the issue of social isolation. 

The second theme that we've seen is a lot around care coordination, particularly for the nonprofessional caregiver. If you think about it, it's staggering. There are up to 50 million family caregivers in the U.S. 50 million people who are taking care of a loved one. These caregivers are typically untrained, unpaid, completely stressed out, and not connected to one another or to their other family members, so how can we facilitate care coordination and involve this amazing workforce, if you will, that we have to augment what's going on in the professional care settings? I think that's a second area we've seen a lot of activity around.

The third is around the caregiving population itself. We've seen that presidential candidate Joe Biden clearly has in his plan a lot around….not only do we need to increase the number of professional caregivers, given the silver tsunami, we also need to retain them, train them and reward them. So we're starting to see some solutions really focused on stress and burnout of caregivers, around the quality of care and also around the training of that workforce. I think the caregiver workforce development is another area that we've seen some activity around.

ALAN PATRICOF: I am perhaps being redundant but let me supplement what Abby is saying. I think there's a greater and greater awareness that's coming out through the election process - but it had happened before -- about the deeds of first responders, for people who were on the front line.  And I think there's the recognition that caregivers are really a very important part of our society -- just as much as teachers -- and they are only going to get more important. What has been brought out is that we're all going to end up being caregivers in a way. While I have professional caregivers in my home at this stage, I still am a caregiver. I am very involved in the process. It's changed my life, and how my schedule operates, there are functions I have to perform that I didn't before, things I've had to learn, support groups that I become part of.

This is now going to be part of all of our lives. Someone who's 20 or 30 or 40 years old at some point they're going to face it. When we were out talking to potential investors about Primetime Partners -- honestly, I am not exaggerating - what I would hear no matter who we spoke to at whatever age, Abby could almost fill in the words, they said, “I get it.” Those were the words every single time. You didn't have to do much explanation. I think that's why there are a lot of people, mostly young people, starting up businesses in this area. They are seeing needs that they came to probably because they know of somebody or they got somehow involved, and they saw a need. That's what got them to focus in this area. 

SHIV GAGLANI: I couldn't agree more. I’ll be the next to chime in that “I get it” as well. My mother is a physical therapist in Florida who's written two books on urinary incontinence so growing up, I knew a lot about the caregiver…. 

ABBY LEVY: Wow!

ALAN PATRICOF: You didn't tell us that, Shiv!

SHIV GAGLANI: I will send them to you.  I grew up in Florida, where I was the youngest person on my block by 50 years, apart from my parents. I definitely saw a lot of that happening where caregivers would arrive at these houses and take care of people for eight hours a day and then leave. 

So, how has COVID accelerated some of your plans or maybe interfered with them? We know that some companies have had to slow down because of restrictions since the elderly population is more at risk because of COVID, so many companies that did in-person experiences at skilled nursing facilities are maybe having issues. What have you found with COVID?

ALAN PATRICOF:  I'll start out on this one. When we started in December of last year, COVID wasn't even a word yet. As we started into it, COVID became a word, and it had some impact on our starting up and getting ourselves together, but what COVID has done, honestly, it's compounded the opportunities in our world. Believe me, we have no interest in benefiting from COVID, but if nothing else, older people have now become facile using Zoom, using their home device and exercises, changing their life patterns to accommodate the disease that's been thrust upon us. I would say it's had a compounding accelerated impact on the opportunities in our area. Now I'll let Abby fill in from there.

ABBY LEVY: We've seen a change in obviously consumer behaviors of older adults in terms of the necessity to use technology to reach them. I think we've also seen the elevation of the child as caregiver.  The number in my peer group who had to step up and take closer care of their parents was absolutely something we've seen from COVID

Senior living has kind of opened the door to a whole new set of companies like telemedicine and remote monitoring and all of these technologies that will help to minimize patient-clinician contact during times of disease control. I think the last thing is we've seen the government play a slightly different role. We’ve seen it with the reimbursement of telemedicine, we've seen the government involved in more regulations of different areas, more support for the aging. The government has shown that they're interested in innovating, they are supportive of trying new things, and that bodes really well for the ecosystem that we're building.

SHIV GAGLANI: Yes, totally. In addition to the companies you've mentioned that you've invested in, you also have a pretty impressive list of limited partners. I know one who Alan introduced me to at the Greycroft Summit last year was Tom DeRosa. Maybe you can talk a bit more about your LPs and your advisors who are helping you find and vet opportunities as well?

ABBY LEVY: Absolutely. Tom DeRosa is CEO of Welltower, one of the largest senior living Real Estate Investment Trusts in the country. Tom is, I think, indicative of our group of advisors.  We've engaged executives across the spectrum... from Aaron Martin, Digital Officer of Providence Health Systems to Mitch Rothschild who comes from the health media digital marketing space. We have Rachel Whitaker, who is an executive of Bright Health Medicare Advantage plan. I can go on and on. Our advisors provide, I think, first of all, an opportunity to screen the companies we've seen to say, “Hey, could you be a customer for this? Is this a good idea? Do these margins look right?” 

They're super helpful on the diligence, but they're also helpful with being potentially the first customer or revenue generator for our companies. In fact, of the six companies that we've invested in so far, there have been three of our advisors who have been helpful in terms of securing revenue for those companies. Our advisor team, I have to say, was brought together really by a shared interest of, “Let's build. There are big problems to solve. We need a lot of great brains and smart capital doing it.” We're very lucky to have amassed a group of advisors who are many times long-time friends of either Alan or me.  

I think the other piece that we mentioned in terms of our investor group is that all of our investors, I think, are completely aligned around this notion of “profit with purpose”. We are absolutely out for tremendous financial returns. We are a venture capital business. That is our business. But I think that given the space we're playing in, if we don't have a social impact, then we won't have succeeded either on the investing side or on the mission. Seniors are an absolutely underserved population, and that's really something that everyone in our investor group is aligned around.

ALAN PATRICOF: I'd like to add that a great benefit of Welltower is it has strategic partners. We have a testing ground in any one of their 1600 facilities and that's the reason they're interested, and Tom is interested. It is to be exposed to new things that may come up. I might add that as part of our investor group, we have one major medical school, and we also have two other operators of nursing home chains. They’re there for the same reason, they want to make money, but they also are interested in hearing about new things that we may come across because we're focusing, I want to make clear, on what we call the seed and early-stage, pre-seed, in some cases, investing as opposed to later-stage investing. We're bound to come up with some exciting new ideas as part of our investing activities.

SHIV GAGLANI: Yes, I have no doubt. The opportunity ahead of us is the largest reason why, as you know, Alan, we've gone from just being a provider for medical schools and nursing and PA students, to now doing caregiver training as well. One of our visions -- and you may not know this -- is “everyone who cares for someone will learn by Osmosis”. For us, everyone cares for someone. You care for your wife, Allan. Abby, you said you have aging parents that you care for as well as three children, so really everyone cares for somebody. Speaking of the ubiquity of this problem, when I started hearing about the silver tsunami, that was in the context of Japan and Germany being leading indicators of what an aging population could do socioeconomically and what some of the opportunities were. Now, it's starting to hit in the U.S., obviously. How internationally are you guys looking as far as your investments?

ALAN PATRICOF: Well, I'll take a stab at that. We have one specific investor who's from China and is particularly interested because they want to see the opportunities that perhaps could be exported to China. I will tell you that one of the companies we looked at in the remote sensing area already --  they’re located in San Francisco, and they were addressing the Japanese market. When we asked, “Why?”, he was almost verbatim of what you were saying, that the market there is much more focused on elderly care in general, are very receptive, and have reimbursement techniques in place already. For them, it was a faster entry point. It was to go into Japan and answer what areas we're interested in. 

We'll look at other countries besides the U.S. Obviously, we're going to be primarily focused on the U.S., but we've already seen a deal from India, and I think we've seen one from Europe. We're open to that, but in every case, we will do that alongside an investor who was locally-based. We will not go in as pioneers on our own into another country. Europe, as you said, China, Japan are the key markets in addition to the United States where the population is aging.

SHIV GAGLANI:  I know we're coming up on time, but I have two more questions. If you're looking out, let’s say five, 10 years from now, what are your goals for Primetime Partners? Do you think this is the first of many funds? Are you going to invest in later-stage companies? What do you think about the opportunity ahead?

ABBY LEVY: It's a great question. I think this is early days for developing a private sector around all things related to aging and older adults. So as I look at our strategy over the next five to 10 years, obviously, it's to make great investments and to support great founders building meaningful businesses, but our hope is that we actually create a much broader platform for both investors and start-ups, more broadly folks that are interested in policy and media and all thought leadership around what it means to be an older adult in our society. 

If you think about it from just a visibility standpoint, other than AARP, in the U.S. there are not many movements or efforts from a visibility, or a role modeling, or positive brands standpoint around older adults. So in addition to building out a very substantial investment platform, and, again, later-stage funds, more early-stage funds, we'll see where the opportunities lie, but also to really build a positive brand and entity around this sector that has global implications but really has the ability to kind of change the narrative of how we think about it so that you're not surprised when an 84-year-old is cruising down a double black diamond in Park City. That it just becomes part of our consciousness. I think that's something that is for the firm.  

For me, personally, it does come down to people. I love the team that we have at Primetime. We look forward to expanding our team -- in fact, we're looking to hire investment professionals right now -- but really just the entrepreneurs that we've met. We've seen about 80 or 100 companies since launch. We're meeting these founders just to encourage the founders that are out there, or people who are considering being a founder, to really work with them and to inspire them that there's a light at the end of the tunnel. I think those are some goals that I have. I'm sure Alan, you can add more as well. 

ALAN PATRICOF:  I would just say this is going to be the first of many funds.  We deliberately kept the size of this first one small because we wanted to be realistic and kind of prime the pump of our investment outreach. It's going, honestly, faster than we thought. We thought we’d probably put this capital to work in three years. It looks more likely it's going to be two years. The demand is out there, and we wanted to start at a realistic basis, but I know Abby's aspirations are very high and I'm sure she's got a twinkle in her brow someplace thinking already about fund two and thereafter, and I'll go along for the ride as long as she'll keep me.

SHIV GAGLANI: Awesome. One last story I'll share...I don't know if I've ever told you Alan, but one of my mentors that I briefly had at Hopkins when I was a med student there is a woman named Catherine DeAngelis. She was the first female editor-in -chief of The Journal of the American Medical Association. 

I asked her -- I think she was in her 80s as well -- and I asked her, “Oh, when did you retire, Dr. DeAngelis?” She said, “Shiv, honey, I never tired the first time, so how can I retire?” I think that's similar to what I'm hearing about. 

ALAN PATROCOF:  (laughs) Amen. Amen.

SHIV GAGLANI: My last question is, is there anything I've missed or I didn't ask and that you'd like to be able to address, especially to our audience of millions of current and future healthcare professionals?

ABBY LEVY: I think the piece that we're starting to learn is -- and first, it’s a very heterogeneous group, so it's really hard to say that there's one profile of a senior -- I think the piece that we're appreciating is that service and human touch really matter, and it matters as you get older and you have questions, whether they're financial questions or health questions, or how...

ALAN PATRICOF: Or technology questions.

ABBY LEVY:  ...or technology questions. We’re encouraging entrepreneurs who come at this with the mindset that “technology and data are the answer” to still provide the human touch and support as that's really important for this market. I think that for care professionals, recognizing that the extra 30 seconds you spend helping someone address their stress, anxiety, or fears around whatever topic is facing them is time well spent. 

We've seen that our businesses are getting traction and loyalty from consumers  -- like Carewell, like Bloom, like Timbo, and Retirable --  when they have a human element to what they offer. That's something that's really important. As professionals get pushed more and more out of care and more into the routine and the data of what they're doing, we hope they remember, particularly for this audience, that human care and TLC matters. 

ALAN PATRICOF: I'll just finish up by saying that I hope you've gotten from this session the feeling that Abby and I are very strongly motivated to become thought leaders in this area. We intend to stand up on soapboxes and do whatever we can to promote this whole area of opportunities for investment, and also for people to think more actively about this whole idea of the “ageless generation” that's here and is coming up in the next 20 years, 30 years..

SHIV GAGLANI: That's fantastic. I hope that we can play a small part in that story by amplifying your message to our audience. With that, I'd like to thank you both, Alan and Abby, for taking the time to be with us today and wish you the best on Primetime Partners. I'm Shiv Gaglani. Thank you for checking out today's show and remember to do your part to flatten the curve and raise the line. We're all in this together.