After her own experience with fertility testing, Afton Vechery set out to make the testing process easier for millions of women across the country looking for a better understanding of their reproductive health. From day one, Modern Fertility aimed to provide quality, peer-reviewed information to empower young women to have the knowledge they need to make more informed decisions about her fertility.
On this episode of Inside Reproductive Health, Afton shares the Modern Fertility story. She shares how she brought her vision to life, including how she has been able to raise funds from Venture Capital companies. Griffin and Afton also discuss how Modern Fertility hopes to work with fertility clinics to improve the patient experience across the board.
Learn more about Afton and Modern Fertility by visiting modernfertility.com/ or finding them on Instagram @modernfertility.
Mentioned in this episode:
85 - David Sable
61 - Jeff Issner and Taylor Stein of EngagedMD
ACOG Publication: Concordance of Fingerstick and Venipuncture Sampling for Fertility Hormones
To learn more about our Goal and Competitive Diagnostic, visit us at FertilityBridge.com.
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Welcome to Inside Reproductive Health, the shoptalk of the fertility field. Here, you'll hear authentic and unscripted conversations about practice management, patient relations, and business development from the most forward-thinking experts in our field.
Wall Street and Silicon Valley both want your patients, but there is a plan if you're willing to take action. Visit fertilitybridge.com to learn about the first piece of building a Fertility Marketing System--The Goal and Competitive Diagnostic. Now, here's the founder of Fertility Bridge and the host of Inside Reproductive Health, Griffin Jones.
JONES 2:46
Miss Vechery, Afton, welcome to Inside Reproductive Health
VECHERY 2:50
Thank you for having me. I'm excited to finally be here.
JONES 2:55
You're at the head of one of the rising stars in tech and fertility. And there's a lot of people in that sector because there's a huge gamut of companies that are really legit, and going to change the landscape of fertility. And there's also a whole lot of very, very nascent companies that are really kind of just looking for their shot. A lot of them ask if they can be on the show--we're changing the format to where--we've changed the format to mostly they would have to be sponsored content. But when I talked to your team, I said, Okay, get Afton on here, one, because I do think that modern fertility really has gotten a lot of notoriety. So there's that. But the second is that anybody who ever gets stuck in a car with me for eight hours automatically gets an invite onto the show. That's one way of doing it and you've checked both of those boxes.
VECHERY 3:49
I love it. Well, I couldn't think of a more fun person to be stuck in a very intense snowstorm with for eight hours. So I'm very glad we made it through and that there was a very exciting fertility conference on the other side.
JONES 4:06
So give us a bit of the background of Modern Fertility--we're going to talk about all of the things that you do, but any entrepreneur sees something in the marketplace that they either perceive as missing, or needs to be presented in a different way, work in a different way. What was it that you saw with Modern Fertility?
VECHERY 4:29
So you know, I think that often in entrepreneurship, there's kind of this, you know, big aha moment, and then that kind of like catapults someone forward and to figuring out a company and maybe that exists and maybe people just wake up with those thoughts. But I think in healthcare, it's a little bit more complicated because there's so many incentives at play. And I think, you know, with your introduction and just the fact that you know, there's a lot more activity in this space, I think that that's amazing because there is so much innovation that's needed in women's health. But it also can be scary, because I think there--especially in fertility--there is a very large self pay demographic with very high willingness and ability to pay. And that means that there, again, can be a lot of incentives at play. And so I think, you know, my experience and really thinking about the fertility space was just taking a step back, thinking a lot about the customer journey, thinking a lot about clinicians and physician journeys and in starting with my homework. And I think I had a head start there, because my introduction to the whole fertility space was back when I worked at private equity and I was leading the diligence for a roll up of IVF clinics and labs. But then I kind of left private equity, went into digital health, women's health, personalized medicine startups, for the next portion of my career. And when I took a step back from all of that, I realized that I was waiting until later in life to start my own family and that I wanted those baseline tests that I learned about back in the day, I realized that they weren't easy to get. But then I actually spent time shadowing in an infertility clinic. I spent time talking to all of the women in the clinic, I spent time talking to the financial team. I spent time understanding, you know, who comes in the door, who converts, who doesn't, and I think when really identifying the area that I can make the most impact, as you know, totally upstream at the point of fertility information and shifting the dialogue. To me, it was a win-win for really the broader ecosystem. So I think just lots of different factors went into that decision.
JONES 6:49
I want to ask you about the delivery of upstream. But first, there was something that you said which you felt that that baseline testing wasn't easy to get. What do you mean by that?
VECHERY 6:59
Yeah, so I think, you know, when I was in private equity and kind of going through, okay, what's the customer journey? Okay, you call the clinic, okay, you get that consult. Okay, you come in, you do at the time, it was full day three labs. Now I know, there's some clinics that are doing AMH and ultrasound on any day. But it was kind of working through that whole process. And so, you know, back in private equity, I was learning the customer journey, but also the science of why because it's really important to understand the clinical significance and cost implications of all of these different tests. And so, you know, fast forward to when I realized that I wanted more information, I wanted more tools to think about my fertility, because I was heads down, working on my career. And so I asked my OB/GYN like, ‘Hey, I'm interested in ordering this panel of tests. I'm not on hormonal birth control. I want AMH, FSH, I have an irregular cycle. I want the thyroid levels, like can you please order this range?’ They said, ‘No, you're not actively trying and failing to conceive. So we're not going to approve these tasks for you.’ So I had to go schedule a consult at an infertility clinic, which was fine. But then, you know, it took me a while to pinpoint day three, take that requisition, go into, I think it was like a Quest or Labcorp, get the test done, bring it back. But then that the power of having that consult, the power of having that conversation with that physician, myself, my partner, and thinking about my timeline, was just so empowering to me. I got diagnosed with PCOS as a part of that process. But even more than that diagnosis, I thought about my timeline and what I wanted for really the first time and I think having tools, having information, and having the support system to do it was really the aha moment for me. And then when I started talking to other women all across the country, I started seeing that there was this aha moment for them of like, yes, I will pay money to do this. I want to do this. I want to do this up front. I need more tools. All of my friends are having issues. All of my friends are talking about this, and I just want more information.
JONES 9:12
And so why do you suppose that OB/GYN offices such as the one that you visited, declined to do those tests? Was it well, because you're not trying to conceive, they couldn't bill it for insurance? Is it just because it's not something that they normally do? They normally would have referred out to an REI anyway? What's the bottleneck at the OB?GYN level?
VECHERY 9:36
Yeah, so I think it really depends on the OB?GYN. I mean, for my particular OB/GYN, I was actually quite surprised. We actually later started working with that clinic, because we had another handful of practitioners there come to Modern Fertility and say like, ‘Hey, we're recommending toso many of our patients that are asking about this.’ And we actually set up a whole program where, you know, we were made available and consults and kind of that preconception visit. And so this one practitioner that I had before I started Modern Fertility and before, when I first moved to the Bay Area, I think just was not equipped to have that conversation with me about fertility was not equipped to understand whenever I didn't know what AMH was, didn't understand the value of that information and thinking about red flags and helping me think about my success for IVF or egg freezing, maybe didn't have a relationship with an IVF clinic to think through it. And so what we found is that there's just quite a range with OB/GYNs, but really, in a 15 minute well visit appointment, there's just not a lot of time to talk about the nuances of fertility information and how it can translate to the very personal decisions around a family timing process. So I think when we have done all of our market research, there are just very uncomfortable questions about timing, it's very hard to get the latest statistics and translate them back. And then when you do get that information from the assays, that nuance, personalized information that's based on all of those hormones and just what it means for her, that information is where there's new literature published across the board every week. And so I just think there's a big education gap that it's just going to take us time to fill, and how can we use technology access and create kind of economies of scale with this data and home testing platform to give this information to more women earlier.
JONES 11:46
The answer might be in that economies of scale, but I imagine that there's some REIs listening that say’ Ok, well, we've been saying that for years, the patients are coming to us, and they don't have the testing. They don't have the proper education from the OB’s office, but we do that--we maybe we call it a fertility snapshot.’ There's a few different names that people have their own branded names where but we do AMH FSH testing, we do semen analysis for the male partner, and sometimes it includes the consult, sometimes it doesn't, maybe it includes a consult with a physician extender, why isn't that a solution for for the same demographic that you're reaching?
VECHERY 12:23
Yeah, I think it's definitely a solution. But where there's only 500 infertility clinics in the US and a few 1000 specialized reproductive endocrinologists, when we look at the issues around fertility, when we look at the number of people that need true infertility reactive treatment today, it's a numbers game. Like if we can all work together and use technology to support providing this information even further upstream so we can detect those red flags. We still see one in 200 women in our slightly younger data set that have undetectable AMH levels that most of which go on later to work with their doctor and get diagnosed with POI, like how can we start this conversation even more upstream? Because there will always be a role and reproductive endocrinologists will always be at and beyond capacity for quite some time. And so I think our view is how can we have a collaborative relationship where we are able to educate even more upstream to take on the onus so that way, if someone does decide to move on and either pursue infertility treatment, or pursue egg freezing, they're going into that consult, to that time with a valued reproductive endocrinologist and using that consult time in a really high leverage way. So instead of, you know, learning about what AMH is, and learning about that we're bored with all of the eggs we're ever going to have, and that goes to almost zero at menopause, how can you start out with that baseline and then use that conversation with your doctor to get medical advice to understand more of the nuances about the clinic? And then for some of the clinics that we work with, it's, you know, instead of, it's really thinking about the workflow, and if there could be a world where that customer experience flowing through the clinic could be improved, what does that look like? And how could technology earlier testing and that information upfront, create a better experience for the patient and then process for the clinic?
JONES 14:32
It's a paradox for the clinics, isn't it? One of my favorite REIs, asked me one time just over a cocktail. ‘How do I get these patients that should have come to see me in three years earlier? How do I get them in that three years earlier?’ And there's a number of different solutions. Yours is a very scaled and robust one. But even if the clinics are to invest in it, they don't have the time to invest in that. And then and you can address some of it with content and processes and clinics should. But almost every doctor listening, I suppose probably has more patience than they know what to do with at this point. And so, and they're saying, ‘How do we convert the patients that we have and serve the patients that we have?’ And so you're addressing something that I just don't think they have the collective bandwidth to address. But how do you work with clinics?
VECHERY 15:31
Well, you know, really, really quick on the first part, I think that, yeah, it is really hard. Let me tell you, it's really hard. And I'm sure this is not new news to you are any clinician listening, it is hard to change behavior, from thinking about fertility as something that is reactive to something that is proactive. And it has taken us millions and millions of dollars, some of what I believe are the brightest minds in technology all across San Francisco to come together to focus 100% of our time, every single day, 24/7 in this startup environment, thinking about how we can build something upstream that she wants to engage with. How we can take fertility and move it into mainstream wellness, so that we can start to have this more integrated conversation about women's health and fertility upstream. And so we as a company, we don't provide medical advice. We don't diagnose any of these conditions that is truly focused on that kind of upstream education, conversation, tools, and resources. We started with a Modern Fertility hormone test. And then now we also offer ovulation and pregnancy testing so she can, you know, zoom in and understand other components of her cycle along with our free app that lets her scan that semi quantitative ovulation test. But then, yeah, we love to collaborate with physicians and clinics. We do, I think, on the education side, AMAs and webinars and have 1000s of our community and customers tuning in to those. But yeah, I think there's a variety of ways that we've started to work with clinics. And I think that, for us, we do have clinics that are using Modern Fertility hormone test that is approved as an LDT, but it's up to them kind of how they would like to integrate it in their workflows. We do have clinics that are accepting, those results, and using that as a part of the kind of intake process dependent on when those results were obtained. We have others that it's kind of a mix and match of how can we be helpful and thinking through that workflow? And then I think the reality is now we have just been so focused upstream, that one of the things that we need to look at this year is continuing to strengthen that relationship with clinics, because the reality is, that's the question that we get from so many of our customers is ‘Okay, like, what do you recommend? What should I do from here,?’ and so we want to be as helpful as possible in that transition.
JONES 18:18
So in adding to their workflow to the--to the clinic's workflow or not meaning joining up, right before it can either be okay, this person is coming in with their AMH and FSH, and we can either accept this or we can say, Okay, this is good, but we want you to do our snapshot anyway. And, and you're talking about--
VECHERY 18:38
Our preference on that is, I mean, we, you know, there is no international standard for AMH. So depending on if you're sending it out to Quest, depending on if you have your Beckman in your office, or you're using our lab, we published our concordance study, to show that our finger stick that you could do at home could be used interchangeably with a traditional blood draw that is live. We can send out the ACOG publication to anyone. But we've also done--we stand behind every single one of our results. And with the volume that we're able to do today, we can do QC on a patch level, our lab has CLIA and CAP accreditation. We believe in every single result, but the reality is that, depending on the instrumentation that that clinic is using, there might be next steps from there. So when I talked about there could be a very process, it could be that we need to run, you know, a mini validation study between our test results and that lab to either demonstrate full concordance between the two or some type of correction factor just based on the calibration that they're using. And so I think that that's the area that were super flexible around and it's really just taking the work that we've done, the amount that we've kind of invested in the lab operations and science, and just making sure that everyone is comfortable with our results. And so I think that that can take a variety of factors. And I think that what we've learned is just to be flexible and work with clinics and figure out how we can be the most helpful and support the best journey with a patient. And I think for a lot of clinics, it can be helpful because our price point is $159 and it's FSA and HSA eligible. So there's just kind of mix and match components that we can use and think about within a broader process.
JONES 20:31
Someone could offer a consult on top of that, or male partner testing on top of that. So now you're focused a little bit more on that downstream connection, because you're getting so much feedback of what do I do next? And so you're focusing on okay, how do we continue to make this a good transition to the fertility center? Or to the next logical step?
VECHERY 21:00
Well, I would say, focus is an overstatement. I think we understand that that's a pain point. And I think we are committed to figuring that out because we know it's something that she's asking for. But yeah, as an early stage company, there are just so many parts of the journey that we're continuing to work on. So it's definitely something that's on our radar that we're continuing to explore. But yeah, I think these are the types of conversations where we want to hear--I want to hear from you what you think we should do. And I think we're constantly talking to clinics--
JONES 21:37
No you don’t! Because everyone's gonna have a different type of--everyone's gonna say, you should focus on this. And I think what you said about the journey, just there's so many facets to it, it can't be understated. It is so complicated. We're not just getting somebody into a bakery store to serve them a doughnut. There's so many different functions of the fertility journey. And really, on my end, I'm really just looking at it through the fertility center and shortly before, but it's incredible. And so I was going to ask, do you feel like you're even upstream enough? Like, is this--Because I suppose it could be a bottomless pit, right? You could start from kindergarten and talk about sperm and egg, I suppose. But do you feel like your upstream success has mostly been with the demographic of people who are almost ready and need more information and their OB/GYN just isn't scaled to provide that for them? Or are you starting to really reach more of the 24 year olds, I guess, the 21 year olds? How is your upstream journey going?
VECHERY 22:47
Yeah. That's a great question. So our average customer today is 31.5 years old. And that's the average, which means that we have the full range from 21 to 45. So we have college students at 21, that are just more empowered than I was when I was graduating college that want every single piece of information about their reproductive health, because they believe that reproductive health is the last frontier in true equality, and they want every piece of information they can to think about how their reproductive health, think about how their family is going to fit in with their career. And they're starting at 21. And we have the pockets of those very enthused people with ovaries all the way to women that are 43 years old, where we’ll get an email saying that, hey, I want three kids, I feel really healthy. I'm just starting to think about it. I want to take your test and you know, learn more. And we're like, oh my gosh, schedule an appointment, tomorrow. And so I think, you know, for us, it's truly that full range of ages, of personas, with so many different journeys. And I think what's interesting is that about 75% of our customers are one to three years away from actively trying to conceive, and about a quarter just find us when they're actively trying. But all of our efforts have really been focused on that upstream education. So we want to keep going earlier, but the challenge there is that's new, right? That's behavior change. And so it just takes, you know, time, effort, capital to continue to grow that portion of the market. But yeah, I think that there are other ways to continue to go even further upstream. But it's really about kind of capturing her at the right point in time where she's ready to engage. And so we're constantly experimenting with going up earlier. But I think it's interesting that our kind of average age today ties with the average age of first birth in major metropolitan cities across the US. I would hope to see over time that continue to skew earlier and earlier, because I think that that would just mean more tools and better success rates for women when they're having this conversation earlier on.
JONES 25:13
Seems to be like that's where the really large populace is and also in line with what you're trying to sell for. What remains to be done with further down the chain with linking what you do with what fertility centers? I overstated focus, but what remains to be done in your purview?
VECHERY 25:34
I think, really, in starting Modern Fertility, it was having conversations with really, really smart reproductive endocrinologists and OB/GYN and reproductive psychologists and really thinking about fertility, compared to other health conditions. And the reality that today we have this whole model, which is try and fail, and then only when you fail, do you pursue things and treatment and when you think about that, relative to other health indications like that, that's just not--we can do better. And so it was really important that when we were starting Modern Fertility as a fertility information company, we were taking the existing solutions, trying to apply technology and working with clinicians to bring them upstream in a really responsible way and constantly engaging in that feedback of how can we be better and truly support your your needs, but then combining that with, you know, where should this go. So, when we launched the company, we gave every single customer the ability to consent to have their anonymized data used in peer-reviewed research. So customers still own all of their data, but they can press a button and sign up for an IRB approved protocol to have their data as a part of this pool. And so this year at ASRM, we were able to publish and present a study talking about I think, in this cohort, it was about 10,000 women and how birth control impacted AMH levels. And just being able to look at some of these trends in a fertile patient population with longitudinal biomarker data over many years, we're very interested in specific research studies and collaborations in the near term. But the vision here is really to take all of these biomarker end points to take that combined with reported medical, history, current feelings on on lifestyle and all of those other markers, and tie everything together and build out a better predictor of future fertility, something that could be predictive and some capacity at future outcomes to give women more tools to think about that future. Because the reality is we'll never have a full crystal ball in terms of the right time to start trying and if a woman will be successful in that journey, but we can do better upstream. And so our focus is kind of supporting the field with that type of research and vision for better tools and resources upstream so the right people can get care faster.
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JONES 29:59
You've emphasized that Modern Fertility does not provide medical advice, you're not replacing the clinical experience, I still see so many physicians that are worried about that from anyone who's even in the broad view of the space. And I've never heard anyone use Modern Fertility as an example. But I have heard another company that we would all know, and who I perceive to be very genuine as contributing to this field. And last year at ASRM, I got in a straight up argument with someone, not like at cocktail hour either, but at one of, you know, the symposium, and then online, there was a number of other people that felt that way. That these are non-clinicians, people that didn't go to medical school, people that didn't go to residency didn't do an REI fellowship, that essentially all they want is data. And I know that some physicians will have that concern whether you've done everything to earn that criticism or whether you've done nothing to earn that criticism. And I just note some that would go on your website after and look at physician expertise without the clinic price, eff them, eff this--and how do you assuage people's concerns?
VECHERY 31:15
Yeah, well, I think it's really by inviting every piece of that criticism. And I'm glad that that criticism exists, because I think that there are other companies offering testing in this space and others that do not have clinically sound advice that they're giving to customers, that I don't believe are effective at pushing the space forward and giving people with ovaries the best tools upstream. So I welcome and I'm glad that that criticism exists and is there because I think you need that to continue to make sure that the best actors are continuing to rise. So for us, it was really establishing a Medical Advisory Board of reproductive endocrinologists, day one. And so when you do the validated Modern Fertility hormone test at home, or we offer the option to go to a Quest diagnostics facility, if you don't want to do the finger prick, both are interchangeable and both are the same price and we stand behind both results, you get access to the Modern Fertility experience. And what we've done on the back end is we have a technology platform that's able to customize every word of every sentence based on the results that you have back and your self reported information. And what we've done is work with many, many reproductive endocrinologists that have reviewed every version of every report that we're giving back and putting in front of our customers. And the way that those reports are created is that they are only based on peer-reviewed medical journals and articles that meet our very specific citation bar. And then ASRM and ACOG guidelines and then we as a company, don't take it upon ourselves to provide opinions on top of that. So let's say we decide to do a report on PGS. And there's a ongoing debate around you know, should you do it, should you not? How does it play a role in embryo selection? We would not say, Hey, this is what you should do, we would say, Hi, like, there, there's this debate going on, here is the side, here's this other side, here is the area for future resource, we trust you customer to have all of this information and work with your doctor to make a decision that's right for you. So as a company and as a brand, our mantra is kind of you know, we trust women, we trust that women can handle having information. That there doesn't need to be a doctor between, you know, women and information. And by the way, Google exists, so she's gonna be looking for it anyway. So how can we have this clinically trusted neutral information and then empower her to have that, to spend the time, to be her own health advocate, and then to take that and have that more informed follow-up and in conversation with her doctor. So in all of our materials, it's education, backed by literature, reviewed by reproductive endocrinologists, reviewed by physicians with that kind of constant drumbeat of this is meant to inform a more empowered conversation with your physician.
JONES 34:19
You're providing so much more quality information. So I'm not comparing it to Google. But I am comparing--I suppose I am exploring the phenomenon of someone feeling like an expert, because they've read like I've read these five studies and they’re sound studies, but now I feel like I know everything and when I'm talking with someone that's read 5000 studies and gone through 15 years of higher education to be there. So yeah, maybe one could argue that it's not your responsibility, but how do you temper that? Like, this is just the beginning of the education?
VECHERY 34:50
I think there's a lot of misinformation on Google. And so I think that as folks go deeper--and like you can do a simple Google search on a lot of topics and it's pretty clear that when you get all of this conflicting information upfront, Google might not be your best friend in this journey. And it's really hard to navigate it. We have a whole clinical team that is reviewing and responsible for staying up to speed with all of the latest medical information and work with reproductive endocrinologists that are practicing every day to try to be that pulse, to be that drumbeat, to do all of the hard work of distilling and navigating and putting that all in one place. So that's really kind of the role that we've tried to take. And, yeah, I don't think in the connected world that we live in, that anyone can control the action of a consumer. I mean, when you think about--you can always go back to pregnancy testing, you know, when pregnancy testing was invented, physicians at the time didn't believe that women could handle finding out that information from home. Today, if you go and get your lab results on LabCorp, you can download them from their online portal, cancel your appointment with a doctor and never have that follow up. Like we have all of the access to this information at our fingertips and so I think we have to realize that if a millennial woman wants this information, she will go get it. And how can we just make that a better experience for her that ends in a better outcome. And I think for us, it's accepting that that is where the world was going. And that there is a more effective way for her and for a physician that that process can unwind.
JONES 36:34
I’m going to emphasize the point that the information is out there good, bad, and perhaps neutral everywhere, it's already out there anyway. You can either create something to give people access to better quality information, or you can leave them to what's already out there. But the idea that we shouldn't try to provide them with any type of information that can't be given directly by the clinician is simply it's just, it is just simply futile. And that's the criticism that I often hear of the other organization, who I also feel is doing a really good job that well, people should be getting this information from their clinician. They've done such a good job to provide so much better than what you might find on the rabbit holes that live on Google and the internet. So I want to emphasize that point. We've talked a lot about what you're doing to advance research and to move further upstream for people becoming aware of fertility and their health. I'm interested in the business side as well. And I think our listeners will be too because a lot of people don't know what venture capital is-- they use PE and VC interchangeably. And I think it's interesting because you've worked for a PE firm, and you've worked for a company that's raised money through VC. I've explained the difference when I had David Sable on the show, so if you have a better definition, please correct me. But private equity--typically, firms with a lot of capital that purchase existing businesses to either just flip in a few years or improve efficiencies to improve profit and then sell, where venture capital--often raising money to start something new and scale that is that? Would you correct that definition?
VECHERY 38:34
No, I think that that's a great definition. I think that private equity is basically looking at the cash flow of a business, looking at real numbers and real metrics, thinking about a broader growth strategy, combining other growth strategies, which can be business improvement, mergers, and acquisitions, other things with a five to seven-year improvement and exit window on that already established business. And every private equity firm has kind of a different strategy and threshold of how they buy into companies, what percent ownership, and what those goals are. And yeah, venture takes a lot of different stages. And there's seed stage funding, there's venture, there's growth venture, but I think the way that I like to think about it is that for someone to come in and bet on an idea, it's basically,what is that idea? What's the market, and how's it going to change the world? And so, I put all of my own money and went to zero in starting Modern Fertility, but then it was just expensive to set up and run a whole validation, develop all of our technology infrastructure, and we didn't know if anybody was going to buy our product. We had market research, we had validations, we had conversations, we had a lot of gut, my gut. But we really had to convince investors. I did not have enough money in my bank account to kind of fund ahead of when we would start getting sales, you know, what that future would look like. And then as we continue to think about venture, it's basically, how much do you need to invest until you can get to a profitable state? And then if you need to invest in the company beyond for its future growth, beyond the cash that you're generating today, how do you continue to grow that vision, to make a major change in the world and society? And so we had to raise venture at the beginning stage of our journey.
JONES 40:51
I'm interested in that process. A lot of times out here practice owners are saying, ‘I keep getting calls from these venture capital firms. It's not venture capital. Venture capital is not trying to buy your practice. Those are private equity firms. But on the other hand, you started off with your own money and then you need to approach investors, that is venture capital. You said, Did you have sales before you first approached VC?
VECHERY 41:19
Yeah, so. Oh, gosh, do we have sales? So I think we were in the midst of starting our initial beta. And I think we had some pre-orders. And so basically, you know, my mindset at the beginning was, you know, I didn't, I was very fortunate to have a career and savings before this point. So it was a personal decision for me to take that money and put it into this new venture, and get it as far as I possibly could and develop as much traction as I possibly could before I went out and tried to raise. Basically when you're raising capital, you're selling a portion of the company. So when I started out, I owned 100%. And then for every amount of capital, I want to raise, I have to kind of sell off a portion of that. And so starting Modern Fertility, I absolutely believe in this company, this product, I want to spend my life in this space. And so it was really important for me that I was kind of pushing this vision for it as far as I possibly could and then using that point in time to raise venture capital. And ideally, I want to sell the least amount of my company for the most amount of money so having traction there is important. But yeah, I mean, at the earliest stages, there's very little traction from a dollar standpoint, and it's just, yeah, a lot that goes into that process. And I think for us, oh, gosh, in early 2017, when we were starting to raise, the majority of the venture capitalists I spoke with were very confused. They were like, okay, so you want to sell a fertility hormone test to people that aren't trying to get pregnant? Like what is this? What are you doing? So it was not the easiest process.
JONES 43:06
When you talked about your investment and one thing that really made me like you, it was when we're going to this conference, you were speaking at it. So one night you had in the fancy hotel through the conference. And then the other night, you had like an AirBnB or some hotel, across town or something. And I was like, that's cool, because a criticism that small business owners often have of people that raise money in Silicon Valley, for example, is, Well, yes, they've got these big companies, but not earning any damn money, ‘cause they're just raising money to the next round. And they're just spending it like it's going out of style while we're doing everything to bootstrap. And so I thought that that was cool.
VECHERY 43:50
Actually, I stole one of the rooms! I had booked a separate hotel both nights and I stole one of the prepaid rooms of someone that got stuck in the snowstorm and couldn’t--
JONES 44:03
So did I! It was really cool. I hope you stole a bar of soap--
VECHERY 44:05
I love it. I love it. Yeah, you know, I think when you raise venture, when you start your own company, there are some decisions that you can make and then there are some decisions that are made for you. And I think that, the mantra that we took when starting Modern Fertility is that we are truly focused on this broader vision of enabling every single person to think about their fertility proactively. And so what that meant was just we're scrappy. We want every single dollar that we have to be going towards research to be going towards education. And so from day one, you know, Carly and I literally the only salaries--my co-founder--we paid ourselves were to cover rent. And then as we started to grow, we started to pay ourselves slightly more but my salary now is significantly less than my first job out of school, and that'll change and it's a very personal decision to do that at this point. But, and we could choose to pay ourselves more, and we will over time. But I think it's just been this kind of mantra of what we're, what we're doing, why we're doing it, and what's the best for our customers? And salaries are just a small part of that expenses are a small part of that. But I think it depends of just how you're thinking about scale.
JONES 45:29
Have you done two rounds so far?
VECHERY 45:30
Oh, gosh. So we are, I think three? Yeah, three.
JONES 45:38
When I've been speaking with us about Dr. Sable, his view is that venture capital is really under represented in the fertility field relative to other fields of healthcare. And I wonder why you think that is, could it be just--do we need like just a smashing success? Because in other areas of just like all across the consumer market, people are wasting money in venture capital. People are just dropping money into companies that have no proof of concept because everybody's looking for the next Uber or Airbnb. Will a smashing success change that trajectory? Is that what's required in your view? And if not, what is?
VECHERY 46:25
I have been really encouraged to see the number of new companies that are starting in women's health, and even just seeing the pretty aggressive rise of that over the past few years. And I think, you know, when we were starting out, it was really, I remember having to redo my pitch so many times, because I just had to spend so much time on the beginning of the conversation, explaining the journey and really educating venture capitalists. And I think for the most part, often the majority of venture capitalists are male, but even a lot of the females that I spoke with just weren't in the target demographic of the product. And so I think that as humans, our natural tendency is to follow products that we use, things that we can develop deep empathy with. And I think that there are some investors, like our first investor was male--Phin at First Round Capital, he's amazing. And he was a product thinker, or is a product thinker. And he was able to really think about this and the pain points in the existing system, and see the future and the vision that we had. But I think it's really specific to every investor, but I think now, I think that there are more success stories happening. I think that the purchasing power of women, I think thinking through women's health, it is definitely growing relative to where it was just a few years ago. And you know, now we get lots of inbound messages as opposed to the opposite, which is, it's quite a shift. So I think it's exciting. And I'm optimistic about the future.
JONES 48:01
Maybe we spend just one minute talking about that relationship with investors, because there are a lot of people that are listening, many of whom are physicians, many of whom are physicians that either work in larger practice, or own their own practice, that always have some idea that they say, I'm gonna get investors, I'm gonna do this. And so Okay, let's see you do it. But if there's 10 of those people listening, I think one of them will do it. If there's 50, I think a handful of them might do it. And this relationship that one can have with investors, where you, as you said, you're giving away part of your company, someone else now owns part of your company. You talked about one investor that had really insightful product knowledge, how do you navigate this dynamic that if people are going to go this route, they're going to have to think about these parallels? Which is, yes, these investors have lots of experience and there's times when I'm going to want to listen to them versus this is the vision that I don't want to lose track of just because someone's giving me money. How do you navigate that?
VECHERY 49:01
I think it's something that's really important to just spend time on because I think inviting a partner into a practice or having a co-founder and a company, venture investors, especially if they're joining your board, it's a relationship and in many situations, it's a marriage that you might have for quite some time. So I think dependent on where the idea is, dependent on where the company is, can influence the kind of contractual terms that you have with an investor. So often in private equity, investors are coming in with control-based interests where you know, they own the company, and they have the ability to decide who the leadership team is. So they might be able to control and fire the CEO or founder or different parts of the team and then in other situations, often in the earliest stages of a venture, that control lies with the founders. And then investors, major investors have just particular rights within the term sheet. But I think for us, you know, as we launched and then continue to scale, we were really lucky and that we had traction, we had numbers that we could show. And so when we were out raising, we were able to really spend the time and get to know investors and really understand if our vision for where the company would go was aligned with those investors. And I think in this space in particular, there are a lot of different ways to make money. And there are a lot of short-term ways to make money that are often not at the best interests of the customer. And it was really important to me, in starting this company, that we weren't going to take those shortcuts, that we were truly going to invest in the platform, which would be a longer-term, riskier strategy. But I was really looking for partners that were committed to that discussion upfront. And so I feel incredibly lucky for the investors that we've brought on and the collaborative relationship that we have, but I think it really depends on just where the company is and stage for what that relationship is contractually, the value and time that investor can spend with the company. And then what that looks like on a go-forward basis.
JONES 51:20
For those listeners that enjoyed this part of the conversation, I think you also want to listen to the episode that I did with Taylor and Jeff from EngagedMD because between Fertility Bridge, EngagedMD and Modern Fertility, those are three completely different ways to finance and fund and launching business. And many of you are thinking about launching a side venture or a new venture. So after venture, how would you want to conclude with our audience who's mostly practice owners and REI physicians, and then some other executives in the field, whether it has to do with Modern Fertility’s vision for the field, or venture capital and the forces that are bringing everything together? How would you want to conclude to our audience?
VECHERY 52:02
Well, first, I want to say thanks, and that this was just so fun to have a conversation. Second, yeah, if there's a practitioner listening that would like to work with Modern Fertility in some way, offer fertility hormone testing, get involved with us in any other capacity, email me, my email is Afton@ModernFertility.com and I'll put you in touch with the right team on our side to chat through. I want to say thank you to all of the reproductive endocrinologists and clinics that were already working with today. And it's just so cool to see Modern Fertility and this information, just you know, making a difference and providing more access in the ecosystem. And it just I think, especially amidst COVID it is just so cool to see practices, taking this as an opportunity to think more about practice workflow, costs, and just efficiency there. So, yes, that's awesome. And then, I think, final thoughts on the VC side, there's spending the time to get up to speed, I think that, you know, VC is kind of into a bucket. Venture, pure venture capital is looking for, you know, a very large return, which means running your company in a very specific way. There's also if there is a certain market opportunity and a certain outcome and kind of a lifestyle-oriented business oriented with a company, there are different capital structures that can be used to raise the upfront capital to make it happen. And so I think just doing the research on what the different approaches are to go from zero to one will really impact ultimately, the success of the venture and the pressure that is on you know, different capacities of it. And so I think spending the time there is well worth it. And happy to be a resource to anybody in thinking through those trade-offs!
JONES 53:55
Afton Vechery of Modern Fertility, thank you for coming on Inside Reproductive Health.
VECHERY 53:59
Thanks for having me. This was a blast.
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You’ve been listening to the Inside Reproductive Health Podcast with Griffin Jones. If you're ready to take action to make sure that your practice drives beyond the revolutionary changes that are happening in our field and in society, visit fertiltybridge.com to begin the first piece of the Fertility Marketing System, the Goal and Competitive Diagnostic. Thank you for listening to Inside Reproductive Health.