Episode #600: Inside Ola Capital-Richey Hansen's Move from Endurance Sports to Healthy Aging Investments

0:01 This is Pete Moore on Halo Talks NYC with my sidekick Dave Gannil. And we are here to talk about Hola Capital. Richie Hansen coming in from the running world by way of Boulder, by way of San Diego, by way of could talk about investment criteria and his fund that he's raising now. So welcome to the show. Yeah, thanks. Thanks for having me on. Awesome. So let's just take a step back and talk about what you've done on the sports side and endurance side. And then what gives you the right, I guess to raise a fund and invest in companies that you think are potentially the next big thing coming down the athletic pike. Yeah. Yeah. So I was a collegiate athlete at UC San Diego. I ran cross country and track and field for them. And when I graduated from grad school I immediately moved out to Boulder, Colorado where I've been since 2009. Started a sports injury prevention health and wellness clinic out of Boulder, had satellite location down in Denver. Working mostly with professional endurance athletes would work a lot of the national championship and Olympic Trials events for USA Track and Field.

1:16 And in 2016 I was getting, my wife's a pretty high profile long distance runner. She finished 10th at the Olympic trials. In 2016 we were getting approached by a number of athletes that wanted to train either with her or in the same system. And so we started a non profit called Roots Running Project. Four post collegiate high performing athletes that wanted to continue their competitive career. So we created this entity to formalize it, give them structure, training fundraise for getting them to competitions or for gear to continue their performance aspirations. And we quickly grew into one of the more competitive training groups in the country.

2:00 At our largest size we, we had about 33 athletes, all Olympic trials contenders from 1500 meters up to the marathon. And we've had athletes place in top 10 at national championships, top 10 at the world marathon majors, the majority of whom all qualify for the Olympic trials and still currently run that group today. So it's a, it's a fun passion project. Let me, let me ask you a question. What was the genesis on having that as a nonprofit versus a for profit entity? Yeah, it's a good question. I mean some of it is the athletes themselves with performance brands are treated as independent contractors. They're not treated as W2 employees employees. And it allowed us to be able to accept in donations from multiple different entities as opposed to being a, it was never about me trying to generate a business as a a for profit revenue stream for myself. It was more being able to use as a pass through entity to be able to provide this infrastructure for the athletes. It allowed some of these brands to also be contributors to what we were doing on the, the athlete front. And then it allowed us to stay a little bit more agnostic with who our partnerships could be. The individual athletes could still receive their, their sponsorship from their, from their respective brands, but allowed us to be able to take in some of the developing athletes that weren't necessarily partnered with a brand to continue their development

3:34 as well. So, so, so just so I'm clear, because this is an interesting point because I had a friend of mine who was starting up a new business and I said, you know, it's better to just do this as a non profit. It was, it was in a rehab therapy category. But are you saying that if an athlete was to align with your group, it could potentially conflict with a brand exclusive that they had potentially on, on the other side? Yeah. If you look at the dynamic of a lot of the training groups, they tend to be backed by one major shoe company and then that shoe company hires the coach to manage the training group and then they'll recruit athletes to be on that brand. But no athlete outside of that brand can be on that training group. And so a lot of times you're beholden at the selection criteria of who the brand wants on their portfolio. When we started, most of the athletes that were joining our training group, they were good, talented athletes, multi all time, all Americans at the D2, D3 level, all Americans or second team, all American at the Division 1 level. But they were also not the candidates to be signed by a Nike, signed by an Adidas. They were good, just not great enough to get an endorsement right out of college. And so we provided that infrastructure to allow them to continue developing, maybe get their

5:04 full sponsorship in the future. But at least at the time being when they joined our team, they were still at that tier, just below that level. So they didn't pay to be part of your training organization? Yeah, so the way that my compensation works is based on their performance. So if they earn like the, the behind the scenes side of the sport is if an athlete's doing Chicago marathon, they'll have a contract with Chicago that pays them an appearance fee. They might get performance bonuses based on their part, how fast they run at the event. And I'll earn a percentage of that as it relates to my okay compensation. But with, with our training group, a lot of the funds that are coming in are going to helping to support the operational expenses of the group itself to help cover training needs. Of the athlete.

6:01 We've covered like MRIs in the past for athletes that are going through an injury rehab process to support the athlete. This is Pete Moore. I want to let you in on a little secret. There's this company called Promotion Vault and what they do is they give out rewards from retailers that allow you to incentivize your members without having to do zero down and one month free or giving away shakes or giving away t shirts. What you want to do is build a rewards program that lasts, that people value and that doesn't discount your own products and services. So here's the deal. There's something called Rewards Vault. The Rewards Vault is going to allow a member to set up their own profile. They are going to answer questions, you are going to get those answers, you're going to be able to target those members and you're going to reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues and to be rewarded properly for the actions. A lot of companies are cutting back on rewards. You shouldn't be Promotion Vaults. Your answer, Trust me, this is real.

7:18 Pivot into Revere and how you got on to the investing side. Yeah, so as I mentioned, I started my injury prevention sports rehabilitation clinics in 2009. Around 2013, 2014 in Colorado, a lot of the reimbursement rates had shifted from a fee for service to a fee for visit model. And so we were getting significantly impacted based on what our reimbursements were through traditional health insurance. And so we're exploring with a lot of different types of models. But ultimately what it was skewing us to was a high volume type of clinic as opposed to providing the patient with the type of care service that we originally envisioned. And so I made the decision back in 2021 that rather than be a high volume clinic, I wanted to be more on the like technology layer that was helping with implementing a lot of these types of interventions that could service a broader community but also allow for more cost efficient access to care. So decided to wind down my clinics in 2021, sold my clinic in Boulder and started working for the patent and licensing team at CU's Healthcare Innovation Fund. Was on that team while I was getting my MBA at the University of Colorado Boulder, then got brought on to Revere to be their head of investments. That was back in 2023 at Revere. We were a very niche healthcare oriented fund focusing on oral health systemic disease. So I was

8:50 leading Their investment process, negotiations, portfolio management, assisting with fundraising and investor relations. And it was interesting because it was very niche focused. You're servicing a lot of the corporate partners within the industry. A lot of our LP base were clinicians or DSO groups. And so you're identifying technologies that we could help forward face through those clinical groups or that might get acquired by one of those corporate entities. And so we could invest in anything that had applicability within the oral health sector as long as there was clinician input, clinician oversight into it. So it could be digital technology, could be medical device therapeutics, kind of a broad way of application, as long as it had applicability in the industry. And these are all like early stage companies or they were some. The latest stage that we invested in, we invested in a company at the series C level called Biome Salivary Diagnostic, the majority of which were at the seed level. We had a couple pre seed companies couple that we invested in at series A or series B majority being seed level though. Got it. And how did you, how do you enjoy that? Because, you know, I've, I've swung my bat in venture capital. I like to call it adventure capital because each deal is an adventure in and of itself. So how did you feel about, you know, having conviction about a company being head of investment?

10:21 So you kind of, you know, that's like on your book, so to speak, right? Yeah. And I think in private equity or venture capital a lot of people are, are tattooed with the deals that they do and that kind of doesn't leave them. But at the same time, venture capital is a numbers game and not every deal is going to work out. I thought I was going to bat a thousand, about 250, maybe 300 max. So how did you feel about making those early stage investments and getting comfortable with valuations and Pre Revenue and PowerPoint slides and Excel models that all have like hockey stick projections? Yeah.

11:02 Was it the, the rule of projections? At the early stages those projections tend to be wrong. But you're trying to test your own biases or whether the, the executive team has the ability to execute on their strategy. Even if you know that those, those projections are going to be wrong. I think the thing that I really love about stage investing is at the early stage of elite level performance coaching. As I mentioned, with a lot of our athletes, they were developmental athletes, you're looking for a certain personality archetype and there's a lot of parallels between a high performing athlete and a high performing founder that have synergistic personality nuances. Or qualities that you can evaluate. So you're really growing conviction in those individuals and are those individuals that you're really excited about potentially working with and facilitating their growth.

11:54 Where the early stage investing at Revere and then now what we're doing at our current fund is that you're trying to be operational support. There's statistics that show with high performing athletes that the higher level of aptitude that they get, the less and less feedback they actually need. So you're not necessarily trying to be micromanager of inserting yourself into their process of how to build a strong or great business, but you're trying to be there as a support system to them based on the expertise or experience that you have within the industry. So at Revere, where we had this like particular lens within the industry, we had a lot of relationships with the large DSOs and a lot of relationships with the large corporate partners. You can help curate the support that you're providing to those founders about what it is that those groups are looking for, the problem sets that they're struggling with and the things that are going to get them excited about potentially partnering or acquiring those technologies in the future. And we could then take that feedback into our investment process to select technologies that fit that criteria and then be able to select which founders are we most excited about partnering with that we have conviction that can grow and be a serviceable technology for the industry. I mean that's kind of, it's pretty interesting because there are some healthcare services funds that have a lot of the Blue Cross Blue Shield as limited partners. I think what

13:27 they do is they basically look at a deal and say, hey, would you buy this? And kind of calibrate their revenue pipeline based on almost like standing invoices? Like yeah, if you guys fund this, we'll will. Will distribute it. So it's kind of like you had a little bit of like inside baseball going on there to an extent to like guarantee some, you know, throughput and distribution. Yeah, we had, we had relationships with a lot of the payers that service the oral health industry as well. And they would invest in things that they knew that they were going to cover. And so if it was servicing their patient base that they were helping the forward face the reimbursement on, they could also take advantage of being an investor in that technology. And then some of those do do acqu. Acquisitions as well.

14:15 And so potentially if it grew and was utilized very heavily across their payer or patient base, then they could potentially acquire it and bring it in house. How many how many investments did Revere make? So our portfolio when I left was 47 companies. Wow, dude, that's crazy, bro. Yeah, I was there for two and a half years. I made 30, 32 investments. And of that 32, I think about 17 were new investments. So it was a high cadence. They were set up as a rolling fund structure. So it was like one to three new investments a quarter, one to three reinvestments a quarter. Just so people, just so people understand how many deals you have to look at to make that kind of volume of investing. Give us like a, give us a number. How many deals you've crossed your desk, you know, in a given year. Yeah, it's, it's funny because like we would see stuff outside the industry too that founders would try to loosely apply. So I would say in the time that I was there two and a half years, I probably looked at about 2000 deals, but like you're seeing about 1200 that have applicability within the industry and some that like we wouldn't move like we didn't do a lot of consumer products while I was there. So it was like a consumer product would automatically be like something that we wouldn't move forward with, but we'd still take a look at just to have insight into the industry. Yeah.

15:45 So just for some quick math for our audience here, look at 1200 deals. Do32. It's like three out of a hundred. Yeah, that's a lot. That's a lot to digest I think, to figure out who the winners potentially are. Yeah. And the other thing I would add to that, that would sometimes be challenging at a small fund like we were, or small team fund that we were. Was that you looking through your own investment criteria? But we would always so forward face to some of our corporate partners for potential partnerships. And so we'd be doing diligence as it relate to our own investment criteria, but we'd also be doing diligence if it could be a potential fit for a corporate partner even if we weren't going to necessarily invest in it. Yeah. It sounds like kissing several rings at the same time.

16:35 Yeah, yeah. And then what propagated the move to, to, to raise the OLA fund. Yeah. So my background is in sport and health and wellness, broader healthcare industry. And there was, there was part of me that I had been at Revere for two and a half years. I didn't want my venture reputation to just be tied to a particular niche vertical. I wanted to have a broader, broader influence, which is why I moved into Venture capital in the first place. Revere is in the process of raising their fund 3. So it was a good time for me to transition out, to be able to do my own thing as there was going to be new relationships that were starting to get formed on their fund side that I didn't necessarily want to start and then transition out down the road. And not to mention, when you look at the healthy aging longevity ecosystem, it's a very attractive space right now. There's a lot of new technologies that are being developed, a lot that are getting funded, and something that I definitely wanted to be a part of that, that wave of proactive health as opposed to what's historically been funded, which is on the still servicing the traditional healthcare model. It's a good opportunity to move into the space.

17:57 Yeah, I do feel like, well, I guess probably anytime you put money to work in, in venture capital, you're kind of assuming that there's going to be a big market for like, you know, the whole peptides and NAD and GLP ones. You know, at this point, I think it's still kind of the wild west of definitely, you know, regulation, you know, ingredients, consistency, controls, who knows? But that's great. So just give us a little background for the people who don't understand what it takes to raise a fund because, you know, just make a statement here. You know, when somebody raises $1 billion, that didn't happen overnight, you know, as a private equity fund. So when you go in and ask them for capital, you know, the lens that they have is like, man, I just worked my ass off for a couple of years trying to raise this money. I'm not just like, doling it out, you know, without a high level of, of scrutiny. So what does it take to, to raise a $35 million fund in this current market? And, you know, you've got a pseudo track record, but probably a lot of your deals from Revere are still kind of tbd. So how do you work through that? Yeah. So, yeah, to your point, fundraising is obviously, it's a challenge, especially in current, current landscape, current environment. And part of that is just the lack of liquidity that's occurred within private markets over the last couple

19:27 years. It just leaves a lot of LPs still waiting for those liquidity events to occur so they could redeploy back into either new funds or new technologies. Time frame that you typically see is anywhere from 12 to 36 months that it takes to raise a fund. Size matters, industry focus matters, and experience of the team matters. I'm fortunate that I'm surrounded by some very, very good, accomplished people that know the industry really well that have had experience raising funds in the past that have either been on the hedge fund side, the private venture side or the family office side. And so a lot of early stage fundraising, especially for early funds, fund one, fund twos especially.

20:18 It's a lot of relationships that you do have. Our relationships that we're curating is from health and wellness founders, executives, professional athletes, and then there's some clinical elements at play within there because some of my advisors are leading researchers in the healthy and aging space or in the sport performance world. That allows us both good deal flow that we see internally within the fund, but then also strong connections within the industry that have a passion and an interest for the space. So yeah, most of it is through individuals and family offices that we're curating, but it's all people that have experience and passion for the industry as well.

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22:15 And now in closing, give us the background on the Ola Capital. So Ola Ola is Hawaiian for to live, to thrive. So we're focusing on healthy aging, optimizing health span. Longevity ties into it, but it's we're already keeping people alive longer. We're trying to focus more on the gap that's occurring between health span and lifespan. I think right now it's the largest it's ever been in history and the US leads that category at 12 and a half years, meaning somebody lives over a decade of life in a disease state. So we're leaning into our Elite athlete roots of a lot of technologies start in the elite athlete market. They serve as kind of a proof of concept of showing performance gains, incremental performance gains that then find their way into mass market adoption. And so we're tying in professional athletes and ways that we can create visibilities for the brands in our portfolio while we're validating a lot of the technologies that we're investing on the front end through our clinical researchers, clinicians. But for the whole goal of how do we optimize aging, how do we address an aging demographic, and how do we close the gap between healthspan and lifespan. Awesome. All right, so you'll send us the press release when the funds first close so we can get that out, and hopefully we can be a generator of some interesting technologies and entrepreneurs who listen to the show. And

23:46 congrats on what you're doing. Welcome to the Halo sector. Officially, it sounds like you never left. So good to have a guy like you around. And here's to look at 2000 deals for us instead of us doing it. So enjoy that. Exactly. Appreciate all that you're doing for the industry as well. It's great to have some, like, visibility, standardization and obviously the collaboration that occurs between the health of active lifestyle community as well, as well as the clinical validation side. Yeah, definitely. Well, it's all converging now finally, right? It's. It's like taking 26 years of talking about, like, hey, maybe we should have our. Our patients go and exercise. Maybe that. Maybe that'll help, you know? All right, man, great to see you. Thanks for coming on. Thank you for having go Halo later.

24:40 This is Pete Moore on Halo Talks. Your captain speaking. I am the founder and managing partner at Integrity Square. We've been around now for 15 and 1/2 years. We have been helping people like yourselves get capital, do mergers and acquisitions, consulting, strategic advice in the health, active lifestyle and outdoor halo sector, trying to help as many entrepreneurs as possible get to the next level, take that inflection point and be the force behind your growth. We are helping companies that have at least $3 million of EBITDA, around $10 million of revenue, and we are positioned to help you get institutional growth capital or to negotiate deals with strategic partners.

25:25 If you go to integritysq.com forward/isq, you can see our capabilities. Deck. Happy to set up a consultation at any time that is free of charge and we look forward to helping solve obesity, loneliness and diabetes. Go Halo. Sam.