Investing in AI-Native Healthcare with Menlo Ventures' Greg Yap and Unity Stoakes

0:03Yeah, I've never been the inventor of the technology, but it's always been trying to commercialize, trying to find the right applications, and then kind of bring those technologies to market. And sometimes it's been, you know, just the right moment. You know, sometimes we've been too early, you know, it's the, you're either on the cutting edge or you're on the bleeding edge. And sometimes you're doing the cutting and sometimes you're doing the bleeding and I've definitely done both, but it's always been kind of novel technology, high-throughput technology, AI machine learning, and then some breakthrough application that we've been chasing.

0:34And that kind of led me to investing, right?

0:53Unity Stoakes: Welcome, everyone. I'm Unity Stokes, co-founder of Startup Health, and I am excited to welcome Greg Yap, partner at Menlo Ventures, to today's fireside chat. Menlo, as many of you probably already know, is one of the world's leading VCs. And Greg really brings, I think, an extraordinary and valuable perspective to the startup health community. So excited about today's conversation, because before becoming an investor, Greg spent two decades as a founder and operator himself across therapeutics, diagnostics, digital health and healthcare technology. Today, Greg invests across life sciences and healthcare at Menlo and backing a lot of companies really across the intersection of biology, software, AI, and care delivery.

1:49Unity Stoakes: So we're going to be exploring where Greg sees the biggest opportunities in health innovation, what Menlo is looking for, and really what early stage founders need to know to build and get funded in this rapidly changing market. As always, this is meant to be an interactive conversation. So please post your questions in the chat. And when we open it up for questions in a few minutes, we'll do our best to call on you. Ask your questions early as we often run out of time. We'll call on you. And if you could please introduce yourself before asking your question. So Greg, welcome. Thank you, Unity.

2:31Unity Stoakes: It's great to be here. It's nice to see you all. To kick things off, I thought we'd start by getting to know you. As you spent two decades as a founder, as an operator, and you've been at big institutions. But before becoming an investor, maybe just a bit about your background to give us context and how that experience shapes what you look for as an investor today. Yeah, so I've spent my whole career basically at the intersection of new technology and healthcare. I have been involved in a variety of different perspectives on that market, but I've been a founder a couple of times. I helped start and run a therapeutics company and a digital health company.

3:17I worked at Roche for several years and ran their cancer diagnostics life cycle. So I've been through the FDA six different times, class two, class three, run clinical trials in most of the different regions of the world, and then have spent a number of years at Affymetrics in the early days of genomics. I started and ran two businesses for them, the genetics business. And then I started the genetics business and then ran the diagnostics business. Again, kind of early days of genomics. I've kind of seen the industry from different angles. They've bought smaller companies from the smaller company side, have helped to sell smaller companies.

3:57And then it's also been a common through line has always been kind of novel technology being developed, typically very high throughput technology. And then often, almost always kind of AI machine learning to analyze that flood of data, and then some novel application in life sciences and healthcare. And while I've worked in, as you mentioned, therapeutics and genomics and diagnostics and digital health, it's always been kind of that through line of trying to help find, yeah, I've never been the inventor of the technology, but it's always been trying to commercialize, trying to find the right applications, and then kind of bring those technologies to market.

4:37And sometimes it's been, you know, just the right moment. You know, sometimes we've been too early, you know, it's the, you're either on the cutting edge or you're on the bleeding edge. And sometimes you're doing the cutting and sometimes you're doing the bleeding. And I've definitely done both, but it's always been kind of novel technology, high throughput technology, AI machine learning, and then some breakthrough application that we've been chasing. And that kind of led me to investing, right? I now have been in the privileged place the last eight or nine years or so at Menlo, where now I basically work across all the areas that kind of the additives.

5:12And as an operator, I now get to invest across. And that's been a tremendous privilege and responsibility.

5:19Unity Stoakes: Can you tell us a little bit of context about Menlo? What drew you to Menlo? And I'm sure it's been around for decades at this point, but it's probably also transformed a bit since you've been there over the last eight or nine years. I mean, I think Menlo is a new story and an old story at the same time. I think we see ourselves today as we aspire to be the leading AI investor across all sectors. I have helped to lead our life science and health care practices for the last years. but we invest across the spectrum for everything from the models like Anthropic, AI infrastructure, AI applications, consumer healthcare.

6:01We invest across the spectrum and our goal is to be the leading AI investor across all of those areas. But we are also at the same time, we're a 50 year old venture fund. In fact, we're celebrating our 50th anniversary this year. Thank you. We're one of the oldest, one of the original firms in Silicon Valley. We started in 1976 when nobody knew where Menlo Park was. I think today our firm has really evolved through all of the epics of technology and now sort of hitting this AI wave. And I think really with the team that we've built and the investments that we've made and the thesis work that we've done, we're really excited about what comes next.

6:42Unity Stoakes: And if I'm not mistaken, you can tell us a little bit about this. You just raised, I think, one of your largest of capital in the firm's 50 year history. As you specifically in health care and the firm more broadly looks across health care and life sciences and other kind of crossover sectors, Where are you most excited to invest? Is there always now an AI lens or what's the thesis today that would be relevant to startups thinking about how they might fit within Menlo? Yeah, I do think we're investors across the spectrum. But I do think everything today, if you're not using AI and you're not AI native, you're trying to figure out how to involve AI.

7:30It is unusual for us to see a pitch today that doesn't have AI in some form. But I think AI is moving so fast that a lot of the best ideas that we get most excited about are ones that have AI at their core. That's not to say every single thing that we'll do will be the same approach to AI. It is definitely, we talk internally and externally, we are all in on AI. And so I think that's how we want to stand up for our entrepreneurs.

8:00Unity Stoakes: And it seems like you also do, like, let's stay within healthcare, bio, the other related areas, but it'll cross over sometimes to consumer. For example, I know you're an investor in function health. And there's these overs, I think maybe you called them pods at one point, where within the firm, you're doing stuff across sectors and merging those. Yeah, I think the way we think about our industry focuses is in what we call pods, right, which are essentially sectors. I mentioned the digital health pod and the life sciences pod. We also have pods for all of the other sectors that I mentioned. But one of the things that we really like is the investments at these kind of intersections.

8:43right in within our digital health pod as a specific example you know we'll look at things at the intersection of consumer and digital health and so the folks from the consumer team and the digital health team can collaborate to help evaluate that investment and then also to help support that company you know and that's the same thing is true on there could be intersections between healthcare and cyber or healthcare and fintech or healthcare and kind of ai infrastructure We do a lot of work across kind of novel foundation models. Those can have multiple applications. And so we love the things that allow us to bring different groups within Menlo together.

9:25We always have two partners working on every deal. Many of our investments, it just depends on where they are in their life cycle, what the specific need is. But I think one of the things that we feel like makes us a little distinctive is the degree to which we collaborate across the firm in service of our portfolio companies.

9:46Unity Stoakes: And then you do even seed all the way up the stack as a company grows? Yeah, our firm, we have two major investment vehicles. We have our venture fund, which does mostly seed and A, and then our inflection fund, which we think of as kind of an early growth position that does kind of series B through D. And so we can invest across the spectrum of private investments and then do everything. We do everything from company creation, although that's a small focused effort at Menlo all the way up to kind of large, these large growth rounds. I've seen you do both, but are you looking for something very, like, do you already have something that you're looking for?

10:34Unity Stoakes: Or is stuff coming in net new that maybe you're willing to look? And how do you kind of think of the thesis over the past two, three years, even the past year? What are you looking for now moving forward? Yeah, I would say it's always a mix, right? I think we are always, we do a lot of thesis work as a firm. We've also become known for our market research recently in the area of AI. So we do an annual report on AI adoption in the enterprise, AI adoption in consumer, AI adoption in healthcare. If anyone's interested in those reports, they're available on our website. All of those were 2025. We released new editions in 2025, and we are releasing new editions this year in 2026.

11:18And so that helps inform our thesis work. where we are trying to figure out, hey, where is the field going? What sectors do we want to invest in? As one example in healthcare specifically, last year in our healthcare report, we identified patient engagement as the fastest growing sector within healthcare AI adoption. What surprises healthcare people and non-healthcare people is that healthcare is the number one sector in AI adoption. We found that for two years in a row, growing the fastest. And the biggest of growth, not the biggest area as of last year, but the biggest area of growth was patient engagement.

11:54And so after a great amount of thesis work, we recently invested in Assort Health as kind of one of the leaders in patient engagement. So that's kind of an example of market research, thesis work, and investing kind of all coupled into one. And so that's kind of one, a major focus of our firm is that we do do a lot of fundamental thesis work. And I'm compressing a lot of complexity into that. Yeah, sure. But obviously, yeah, it's just that.

12:23Unity Stoakes: It's so exciting. You see companies like Open Evidence emerge, you know, in the past couple of years, you see even how patients or everyday people are going to the large models and hundreds of millions of people a week asking health related questions, putting data in and really going there first is quite extraordinary. I mean, there's been Google, everybody going to Google to ask questions, and now they're going to AI. It's quite a big shift very rapidly. And Open Evidence is another example. It's also a portfolio of company of ours, but it's one where we invested relatively late for Menlo, but at the growth stage.

13:03It was something that we've been following and excited about, but made that investment. That was more finding the right opportunity. And so it's that combination of thesis work, you know, and then the right opportunity, right? Sometimes the opportunity comes in to us. And sometimes we go out and help try to create the opportunity. As I mentioned, help start companies. If we can't find the right company to invest in, we will help to start a company.

13:29Unity Stoakes: Incubation and early, like you'll incubate a company, get it going. So for an early stage founder, then what's got to be true before you believe the company's found kind of a wedge or something that is venture scalable as a business from your perspective, what's got to be true? Yeah. Yeah. It really depends on stage. You know, as I mentioned, you know, we, we do everything from, from incubation and seed all the way to growth. We are trying to expand the amount of seed investing that we do and trying to expand the amount of later stage investing that we do. And so those are two focuses for us. On the seed side, I think especially the team becomes even more important, right?

14:14And the team was always a critical part of our investment thesis. But what I think is interesting in this era of AI is that product differentiation becomes a more fragile moat, right? And in some cases, it just doesn't become a moat at all, right? Because the ability to build product, instead of being limited by the number of software engineers or developers that you could find, you have the ability of somebody who really understands a workflow and a customer, the ability to translate that into early stage product, you know, quickly than it used to. Right. And so therefore, that's great because it allows people to get in the market quicker, but it also reduces the barriers to competition.

14:59And so if the differentiation of product in a relative sense decreases, it's really an assessment of the differentiation of team. If this team has better product today, can we believe that the team will continue to build better and better products, stay ahead of the group, out-execute the competitors that are being more easily enabled by AI coding tools, as an example? Right. And so that's a difference.

15:31Unity Stoakes: As someone's, they've got a strong team, maybe they're unknown to you because it's their first time around. What gets a founder in the door before you've said yes or no door? And I guess digging a little deeper into that, what makes that first meeting? You and the team that have a second meeting, what have they demonstrated? Yeah. So you're talking about once they're in the door, what gets them from first meeting to second meeting? Are you talking about - Like first, how do they even, what's the process of getting in the door? And that would be one. Like what are some tips of, hey, how do we get on Greg's radar or the firm's radar?

16:13Unity Stoakes: What's the right avenue in? Because I'm sure there's a lot of questions. Hey, can I get an intro to Greg? But what's the right pathway in? And then once you've gotten in the door, then what do they got to show up with to be really impressive? Yeah. And again, this is different at different stages or at least not wildly different, but subtly different. If we were talking about, so maybe first very early stage company, if I want to start with the seed stage company, the presumption there is that the company is a small number of people, mostly it could be all founders or mostly founders. and relatively little customer feedback.

16:54You've got maybe some design partners, but not that much. So if that is the case, then it really is about the people and about a demo, but the understanding of the market, kind of that founder market fit, because you really don't yet have customer feedback. You really don't have product feedback. And so then it's really just, if it's people, you know, I do think it is partly getting the warm introduction obviously helps a ton, right? We all will take some cold meetings, right? Depending on how busy we each are in that moment. And, you know, if somebody writes something in the email that catches our attention, but, you know, honestly, as having been an entrepreneur myself, you know, it is a little random, right?

17:44If you're trying to go cold, right? There's a randomness to it. And it,

17:49Unity Stoakes: especially when AI is writing all the emails today. Yeah. And, and none of us can tell what's AI slop, you know, really like you can't, it's hard to tell what's AI slop and what's just, you know, not, you know, what's and what's not. And so getting it, getting that warm introduction, having impressed someone else who I respect, that's 100%. If you can impress someone that I respect, I will give that person time. And so everything else can work, but that's the most reliable way to get, I think, almost any VC's attention. As you get to slightly later stages, I think there are obviously the data, you know, the traction, the customers, right?

18:42Those are ways to get a VC's attention. And then obviously, as we talked about, if you do your homework on that VC, right? If there's a thesis area that I'm interested in, eventually I'm going to publish something, you know, about that work, right? I'm not going to keep that work entirely secret. You may not, there may be points at which it's impossible to know. and you sort of have to get lucky. But the alignment of a VC's thesis area with your business is obviously the other thing that's 100%, right? That will work all the time in terms of getting that person's attention. Sometimes that's easy to discern from the outside.

19:22Sometimes, unfortunately, it isn't.

19:25Unity Stoakes: So I'm gonna ask one more question then I'm gonna open it up to the floor here. Great questions are coming in. We're gonna organize those. But if anyone has questions, please start putting them in the chat. We'll do our best to get to them. But Greg, the market's very dynamic. It's been transforming so rapidly, certainly over the past two years. It seems like every week it's evolving. How should founders think about fundraising in the current market? I guess let's break it into two buckets. Just getting started very super early, raising your first seed. And then if you're already starting to get traction and scaling, how should founders be thinking about capital raising, say, over the next six to 12 months or as far out as you can kind of predict?

20:18I mean, it's hard to it's hard to predict the future. I do think I subscribe to the try to raise more money than you think you actually need because something always goes wrong. I think that's my school of thought, right? It's important to, the dilution is painful, and nobody wants to take more money than they need. But the probability that you need a little more money than you think you did is relatively high. I think that can apply across stages.

20:53Unity Stoakes: This has just been an extraordinary conversation. We're coming up just at the end here. So Greg, I just want to thank you so much for sharing your wisdom with the group. Just to kind of wrap up, leave us with some positive energy. You've been a builder, an operator yourself. What's your biggest wisdom, lessons learned, insights for this group that are all extraordinary builders? They're working really hard with some optimism for the future at this very exciting, dynamic time. Yeah, I mean, I do think this is the best time in all of history to be a founder. I really do. The ability to build has historically been really constrained to a small number of people.

21:38And the barriers to building, getting software engineers has really limited the ability of our whole industry to innovate new things. I think the ability for AI to enhance every person in an organization, not in all the ways that we might want it to initially, but in terms of being able to build product more quickly to get it to customers faster, to get feedback from customers, I think AI is transforming the way that we build things. And so the ability to go fast, to innovate, to get things into customers' hands, to experiment, I think is unprecedented today. And so it will come with its own barriers and hurdles and fears and whether these companies need to evaluate success in the same ways, I think is an important question.

22:41Right. Maybe there are many smaller companies, you know, which actually is not great for a venture investor like myself, but could be actually quite good for the industry. Right. The ability for small teams to build things that are enterprise grade, you know, on the one hand and consumer grade on the other hand. Right. Those are those are both high bar that to me, those are not one is higher or lower, but they're just different bars. The ability for small teams to do that is greater now than at any point in our history. right and so for you guys at the front edge of taking advantage of that you know i'm i'm excited

23:16Unity Stoakes: to see what you guys build thank you so much greg and thanks to all the health transformers for your amazing questions this was a great session uh there's another uh fireside chat next tuesday at 12 noon eastern standard time everyone have a wonderful day greg someone heard your voice when he walked by ah look at that good to see you nice seeing you thanks for doing this sorry Yeah, absolutely. Thank you, Phyllis. Nice to see you. All right, everyone. Bye now. Thanks, bye. So take care, everyone.

23:48Unity Stoakes: And finally, an invitation to all of the extraordinary health transformers, whether you are a startup, someone building the future of health, or whether you are an investor, funder, or buyer of the solutions out there in the marketplace, This is an invitation to you to join the Startup Health member community. Learn more at StartupHealth.com. Look forward to hopefully seeing you soon.