- Andrew's journey with Prenuvo began with a personal health crisis, prompting him to seek more comprehensive health diagnostics after realizing the limitations of traditional tests.
- Despite facing significant resistance from doctors and challenges in securing funding, Andrew bootstrapped Prenuvo through bank loans and personal guarantees, ultimately establishing a successful clinic in Silicon Valley.
- Andrew's experience in fundraising highlighted the difficulty in distinguishing transformative ideas from less promising ones, with Prenuvo initially facing skepticism from traditional investors.
- Emotional resilience and curiosity have been key to Andrew's entrepreneurial success, allowing him to navigate the ups and downs of multiple ventures with a balanced perspective.
- Prenuvo plans to expand its reach significantly over the next year, aiming to open more locations in the US and internationally, while innovating in MRI technology to advance preventive healthcare.
In this podcast with Kyriakos the CEO of Terra, Andrew Lacy shares his journey with Prenuvo which began from a personal health crisis, leading him to seek more comprehensive diagnostics beyond traditional tests. Andrew's resilience and curiosity have driven his entrepreneurial success, and Prenuvo plans significant expansion and innovation in MRI technology to advance preventive healthcare.
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Andrew's Journey from Personal Health Crisis to Entrepreneurial Mission
Kyriakos: Andrew, it's pleasure to see you on the podcast. I spoke with a lot of entrepreneurs in San Francisco and so many times they bring up Prenuvo. So I wanted to hear about your journey. Why don't we start about how did you start the company?
Andrew: Sure. Well, it's great to be here, Kiriakos. Thanks for having me. How did the company start? Well, it really started with me going through something of a midlife crisis in my early 40s. I have a profile that I think a lot of people in Silicon Valley can relate to. I moved to the US for the American dream that is this notion that we work hard today to build sort of a better future for tomorrow. I was on my fourth company that I had worked on, my fourth entrepreneurial venture. And for every single one of those, although I think I was getting better as an entrepreneur, I definitely wasn't changing my habits as it related to my health. So I was eating poorly. I was not sleeping anywhere near as much as I should have. I was exercising sort of very, very intimately and I remember just having this moment where I woke up one day and I looked in the mirror and I said to myself, “Wow, you know, I'm making all these efforts for tomorrow, but what guarantee do I have that I'm going to be around tomorrow?” And so that started my own personal exploration into how to get an answer to that question.
And I discovered as most of us know that there are just this piecemeal of tests out there that you can do that might tell you something about a blood level, or you can do a colonoscopy, or a PSA test, but there was just nothing that was very comprehensive. At least until I found a radiologist up in Canada who was doing these experimental clinical diagnostic whole-body screening exams. So I got on a plane immediately and did one of these exams. I just felt like it was the closest thing to a Star Trek-like health experience that I had ever experienced.
After the exam, we sat down and went through every single organ in my body–that frankly, before that day, I'd never looked at–so I felt like I was meeting myself for the first time getting such a tremendous amount of information about what was going on in every organ in the body. There were some things there that I knew about, which was always sort of reassuring. But there are also health findings that I had no idea about because they're asymptomatic. And it just was one of those light bulb moments, becoming obvious from that point that this is something that healthcare should be based around. And so I made it my mission from that moment on to go and find ways to bring this to as many people as possible.
Building Prenuvo by Bootstrapping the Business Early On
Kyriakos: Andrew, you saw the results and you basically saw the future and how the future needs to look like from that experience. But how did you really start building the business? Because it's a very expensive business to start.
Andrew: I should say there was a moment that was sort of like a flag-to-the-ball moment for me. And that's where I went back. I came back to San Francisco, where I was living at the time, and I decided, “Wow, this is interesting. I want to talk to a bunch of doctors to get their perspective”. Because as an entrepreneur, the most valuable thing that you invest in a company is your time. There was like such tremendous resistance from physicians. Some of those had legitimate concerns about the technology. But others were just like, you know, I remember one doctor in a moment of complete honesty said, “You know what, if you find like stage one lung cancer, I'm not sure I know what to do with that. And if I did the wrong thing, probably the patient would die. Whereas, if you show me lung cancer at the typical stage of diagnosis, there's not a lot that I can do.”
So all of a sudden, the decisions that the doctors make as it relates to earlier detection of disease becomes way more important. So I thought there's something here, and the more doctors were resistant to something that to me felt obvious, the more excited I was to really go after this space and help prove through education and through exposing physicians to what we do. That there's an information asymmetry here, and what you thought about MRI, no longer holds true when you look at these exams. But I think what you're alluding to is then how do you get started? Because one of the challenges of lots of physicians being not particularly excited about these exams is almost every VC either has a physician on their investment committee, or the investors on the investment committee have physicians that they will ask questions like, “what do you think about these screenings?” And because we obviously haven't had the opportunity to speak with those physicians and show them what we were doing, the outcome was more or less negative most of the time. And so even though we had a business that in this one market in Canada was doing very well, we really struggled to raise money as a company from the traditional investors in Silicon Valley. So we ended up having to bootstrap that company. We got bank loans, we did personal guarantees.
Kyriakos: Bank loans? That's even more surprising. I would expect the bank to be to give you a very hard time.
Andrew: Well, this was a Canadian government bank. So it was perhaps a little bit more lenient on the sort of underwriting criteria, but they charged a lot of money for the loan. And we had cashflow. So for them, ironically, we were a slightly lower risk than we were for VCs who were somewhat blinded by what their personal physicians were telling them about, you know, the efficacy of these scams. So we took this money and we were able to open, in the middle of COVID, a clinic in Silicon Valley. And from that moment on, the trajectory of the company really started to pick up.
Navigating the Challenges of Fundraising for Transformative Healthcare
Kyriakos: Super. Now, I believe I read and you mentioned at the beginning that it was very difficult to raise the initial funding, but I've seen that you raised $70 million lately from very, very prominent investors. What do you think changed? And maybe how did you change your personal pitch to these investors?
Andrew: Well, I don't know if I'm great at raising money because I definitely got way more no’s than yes’s even in that fundraising round that we did. I'm an angel investor too and I've had some angel investments come before me that I said no to that ended up being like decker corns and I often have kicked myself, you know, and said, why didn't I invest in those companies? You know, it's quite easy to tell a good company from a bad company. And I think the challenge is it's really, really difficult to tell an incredibly potentially transformative company from the worst idea ever. So if you think about the distribution of companies as being like a normal distribution in the sort of fat part of that normal curve, it's quite easy to tell this company is better than that company. But I think at both tails, it's really, they're sort of indistinguishable from each other. So the most transformative ideas almost always sound the most crazy at the beginning.
And I think in healthcare, the types of ideas that were funded followed typically a well-understood formula, which is, you know, their point solutions that are designed to be either slightly cheaper or slightly better than something else that's already covered by insurance in the market. And if you can do that, then you'll get insurance coverage and so your path to revenue will be obvious. We weren't that type of company. And you know, we were saying, “Maybe this reactive way of healthcare is not the right way to do it. And maybe we need to rebuild healthcare around proactive preventative medicine”. And a lot of VCs were personally very excited to be customers, but from an investment point of view, just didn't really understand how that fit any of their existing thesis as an investor.
In that first round, we had a company called Felicis that led the round. They're a consumer investor and they had invested in 40 unicorns right across the spectrum. They just were really on the lookout for those types of companies. But for that one, I definitely got dozens and dozens of no's. So even when we raised that money, it was not obvious that we were gonna be a successful company.
And I think that's story of a lot of entrepreneurs that are trying to raise money. You know, on the television shows, they don't show you how many times you get no as an answer. And that, you know, you have to pitch 50, 100 investors before you can pull together around.
How Emotional Resilience and Curiosity Shape Entrepreneurial Success
Kyriakos: What learnings did you apply since you started other businesses in the past? What learnings did you apply that worked in this one that other founders can learn from?
Andrew: Cool. That's a great question. Know that I feel much more capable now than I did doing my first company, but I would say that every one of my companies has been completely different. So I have a lot of friends that are serial entrepreneurs that, you know, sell a company and then two years later they start the same company more or less, and then sell it again and then start the same company more or less. So they have like experience that they can apply to the subsequent businesses that they built. Every one of mine has been in a different industry.
I'm an inherently sort of curious person. Although I think probably what my friends are doing is the, if the goal is to be rich, that's probably the best way to do it. But for me, I just find the thought of that kind of very boring at the end of the day. So unfortunately, I rarely have any actual industry experience that I bring to a new venture. But I'm just such an insanely curious person. I read a tremendous amount and talk to a lot of people. I have MRI imaging books here. You know, if someone shows me an abnormality on someone's MRI image. I can do a pretty good job of guessing what that is now. I just really thrive in, or revel in the idea in sort of like learning new things. I would say the main thing I've carried across from different startups is more emotional resilience.
I remember with my first startup, you know, when things will go bad, I really just felt like the world was ending. And when things were going great, I felt like everyone's on the table dancing. This emotional roller coaster, I think is probably like the most damaging thing for one's health. And what I've learned now, and there's good and bad to it, is that I've just gone through so many of these roller coasters that I sort of become a little bit numb to like the extremes one way or the other. So if I have a bad day something goes wrong, it doesn't affect me anywhere near as much as it used to because I've just had so many examples where the next day has been incredible. I wake up with the notion that, okay, it's a new day. The inverse is also true. Like I find it harder to celebrate the wins because I've also seen the downs, you know, the day after the wind. So it sort of made me a much more level person which I think sort of is an important trait as an entrepreneur because there are always ups and downs as you go to build.
Prenuvo's Plans for Expansion and the Future of Healthcare
Kyriakos: Kyriakos: Super. And in terms of the next one year and then the next five years, what should people be expecting from Prenuvo?
Andrew: Well, I think in the next year, the focus really is about just bringing the scan to more and more people. So we'll be opening more locations in the US and we hope by the end of next year that there'll be a location within a comfortable distance from everyone living in the US. We also will start expanding internationally. So in the next 12 months, we have plans to open in Europe and Australia in a couple of locations. And so we'll start to bring these scans to folks that live in different continents, some of whom already today are flying in to get an exam. On the five-year timeframe, the thing that makes me most excited is a lot of the innovation that's happening in the MRI space and the number of use cases continues to grow. And the things that we're able to see with these exams I think is we're only just scratching the surface of.
Some examples of this are we're experimenting with a number of sequences that help us understand a lot more about cardiovascular health, which is something that typically you would get a CT for. But if we can do some form of screening using MRI, we can avoid that radiation as well. We're also doing a lot of experimentation around brain health. And here, the most that we know about age-related brain degeneration comes from some studies that really just studied Alzheimer's patients. We know a lot about late-stage disease, but we don't really know anything about early-stage disease. And so we're already running sequences on every patient that comes in that are the sequences that are run on Alzheimer's patients so that we can get very, very detailed maps of their brains and really understand how those brains are changing over time. And in the future, we'll start to look at blood flow and we're already starting to measure the cortical thickness on the outside of the brain. So we're really trying to peel back and find very early biomarkers of, you know, there's potentially some disruption happening in the brain here, and if we can identify it before you have brain volume loss. And if we can do that, then typically there are lifestyle modifications that may well, change the trajectory of your neurodegenerative health.
Kyriakos: Super. Andrew, I always ask the guests if we go 100 years into the future and we look backwards, what are the things that you would think that are totally wrong today?
Andrew: Well, for me, it's easy. The way we do healthcare is completely wrong. We spend, I think, five trillion dollars on healthcare and 95% of it is on reactive medicine. We pilot these bodies that we inhabit with literally no cockpit telling us how we're doing. And so I think we'll look back and just think that the way we approach disease is like waiting until it's symptomatic and advanced, was tremendously barbaric. And in a hundred years time, getting a health checkup is gonna be even easier than going to get your car checked. A five-minute procedure once a year. And if you get a clean bill of health, you don't have to worry about anything. And if you don't, you catch it early and save both yourself and the health system a lot of money and much better outcomes for everyone. So I think that's gonna be future. I think it's a hundred years. I think it could be 20 years, but it's a radical shift from where we are today in the field of healthcare.