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About Dr. Charu Ramanathan

Dr. Charu Ramanathan is a repeat entrepreneur, passionate about using technology to promote health equity and access. She is the co-founder and CEO of Vitalxchange, a digital parenting platform that helps families raise healthy and confident children. She is also the co-founder and Chairman of the Board of Lokyata Inc, where she helps champion fair lending practices, facilitating financial inclusion.

Previously, Dr. Ramanathan co-founded CardioInsight, a Company specializing in noninvasive cardiac imaging systems, translating research from her PhD project at Case Western Reserve University. She led CardioInsight through its growth stages and its acquisition by Medtronic in 2015 for nearly $100 million.

Dr. Ramanathan has been the recipient of several awards for her contributions to technology and humanity including Crain’s 40 under 40, TiE Immigrant Entrepreneur and American Red Cross Hero and is an inventor in over 25 patents.

Episode Highlights

How to move from scientific invention to commercializable product
How to give yourself a crash course in business fundamentals
How to make the most of good and bad surprises and pivots to strengthen your startup
How to be a smart negotiator in fundraising, especially when you lack confidence and experience
How to tackle the valuation challenge with confidence
Inside insights on managing investors relationships post funding
The realities of founder control and compensation for first time founders
How exits happen in real life and how they play out in founders’ lives

Links and resources

Case Western Reserve University – Institution that owned the patents for the technology used in Cardio Insight.
Heart Rhythm Society Conference – An annual conference focused on heart rhythm disorders.
Draper Triangle Ventures – A venture capital firm investing in early-stage technology companies, including Cardio Insight.
Medtronic – A global medical technology company that acquired Cardio Insight for its innovative cardiac mapping technology.
PitchBook – A financial data platform providing insights into private capital markets, including valuations and investments.
Crunchbase – A comprehensive platform for researching business information about private and public companies, particularly startups.

Interview Transcript

Shubha K. Chakravarthy: Hello Charu, welcome to Invisible Ink. We’re so excited to have you.

Charu Ramanathan: Thanks for having me.

Shubha K. Chakravarthy: I’m just really excited because you’re one of our first founders who is not only in life sciences but has had a successful exit and has now gone on to become a repeat founder.

I’m sure we could have a three hour conversation but I’m going to try to keep it focused and just zoom in on those high value added insights that I’m sure that all of our listeners will really benefit from.

From Researcher to Entrepreneur

Shubha K. Chakravarthy: Let’s just jump right into your first startup which was CardioInsight. I know you were a PhD student and you were pursuing your PhD in a STEM subject. What sparked that initial idea for CardioInsight and at what point did you decide that you were going to make that jump from being a researcher to being an entrepreneur?

Charu Ramanathan: Actually I didn’t know what to do with my life to be honest. I was working in the lab and enjoyed my time there. I had a wonderful advisor and good friends. I had two little children. So that was going on. I knew what I didn’t want to do which is like work nine to five for someone else.

But what happened was the technology that I worked on, I collaborated with two other PhD students to bring it from bench to bedside. We took it through all the steps of the validation of a technology from its early inception and computer simulations all the way to a patient. And when we started working with patients. It was really exciting to see how motivated the physicians were. “Hey, you can see all of this non invasively? Show me more.”

Then you really start to see how much value a noninvasive technology has in providing insights physicians didn’t have. That was the first step to think about how this could really benefit a lot of patients. I went back to my professors very naively and the team. I said that this would benefit a lot of patients. How do we get it to a lot of patients?

And in a very staunch academic setting, the response was we’re already in patients. I said that not tens and thirties of patients in clinical trials but millions of patients all over the world. And that’s not the scope of what we do. We started to look into it.

Then I really started to understand the concept of translational research. I started talking to Case Western Reserve University that actually owned three patents which constituted the IP portfolio of the technology. And then they said that the way to do this is to license this technology from the case and then spin a company around it.

So that’s my accidental entrepreneurship story.

Shubha K. Chakravarthy: Awesome. And just for those of us who are not familiar, what’s a quick layperson’s explanation of your actual invention or this technology?

Charu Ramanathan: It’s a noninvasive way to map rhythm disorders in the heart. When your heart skips a beat or what we call an arrhythmia like ventricular fibrillation palpitations.

What my device did was we put a vest on that had 250 plus measurements that did of electrocardiograms on the body which is the electrical activity of the heart. Then we used a CT scan to know the anatomy of the heart and we could go back to exactly where the abnormality came from.

Shubha K. Chakravarthy: And the huge leap over kind of the status quo was the fact that it is non invasive. Is that right?

Charu Ramanathan: So basically the gap in care was an ECG which represented the heart and very broad vectors. It’s a very powerful tool but it’s not a very specific tool. It requires a lot of talent and interpretation and has a lot of reproducibility issues and variability but it is still the gold standard.

All the way at the other end was an invasive catheter examination that you have to have serious symptoms before you were recommended for that, before insurance would pay for that. Then they would put a catheter in and then probe around in the heart to figure out where your problem is.

We sort of fit in that middle where we could be used not only for diagnostics training but also for procedure planning.

Shubha K. Chakravarthy: It sounds like what really triggered that decision was that, “Hey, I have a path here that seems fairly well defined but I could take these IP properties and then somehow magically transform them into a company.” Is that broadly it?

Charu Ramanathan: Yeah, except for the somehow magical part. It wasn’t magical at all.

Shubha K. Chakravarthy: Let’s dive into that. What were your concerns? What are you thinking at this point? You know there’s a path but there’s some magic involved. What are you worried about and what helped you overcome those concerns?

Charu Ramanathan: They always say, “The beauty of ignorance is bliss.” Because I didn’t know what I didn’t know. I was very motivated because I had found a career path that really excited me and there was a lot of discovery to be had.

Challenges in Licensing and Early Struggles

Charu Ramanathan: But our first stumbling block was that the university was really uncomfortable. And this is like 15 years ago. The university was really uncomfortable in licensing their assets to a nobody like me and actually one other PhD student, Dr. Gia joined my team as well.

The two of us were inexperienced business people. We hadn’t been entrepreneurs before. Remember this was a time before Facebook, tech entrepreneurship became really exciting and novel. This was before all of that. So we really stumbled at that level.

We really ran in a kind of a vicious cycle where the university wanted us to get an experienced management team. We couldn’t get an experienced management team without money. We couldn’t get money without the license. We just ran around in circles for 18 months.

And I always tell this to my female entrepreneurs. I told whoever was involved which one of which was the university and others that you will never out-wait me. I’m going to just sit here and raise this infant and come back to you every few months and poke you to see if you give it to me yet.

So go try it, go try to sell it. If nobody wants it, what do you have to lose?

Shubha K. Chakravarthy: Is it just like, were you focused on raising? Did you mean you’re like an actual infant?

Charu Ramanathan: Yes actually my daughter was just born. We submitted a business plan, went through the process, a lot of iterations and a couple of business plan competitions to kind of understand the language and step by step. The usual boot camps and those kinds of things that were available at the time.

This was before blogs. Before all of the information that today’s entrepreneurs have. I was pretty analog at the time but that was sort of my journey. My science was very strong. My co-founder was extremely passionate as well. And having that co-founder went a long way in us being together in the trenches and not feeling quite a difficult journey, especially when you’re questioning yourself all the time.

Navigating Business Education and Strategy

Shubha K. Chakravarthy: For sure. I have a question on that. You said you taught yourself essentially through these boot camps or whatnot, how to put a business plan together. Was there any like one thing that was particularly hard or one turning point or something that stands out about that business education part of becoming an entrepreneur?

Charu Ramanathan: Yes. It’s a very passionate topic for me because I try to help other entrepreneurs through this. Because when you go talk to other business advisors, I’ll call them. They’ll always come at you with a bunch of things.

You need a business plan. You need to assess the market size. What’s your go to market strategy, what’s your product market fit, what’s your TAM, which is your lowest hanging fruit, what’s your price point, what’s your business model, what’s your regulatory strategy, what is your reimbursement strategy?

So it’s not that I don’t know that I got to answer these questions but if you can lay out help me think through what I should answer first and how do I continue to create value in the company step by step that’s suited to the technology I’m trying to bring to market that’ll go a long way.

But don’t give me a MBA one on one on what needs to be done. I can read on the internet. This is the difference is I got to understand what quilt you’re trying to weave and help you put the pieces together.

And I think that’s what we struggled with. It was overwhelming.

Shubha K. Chakravarthy: And was there one thing that kind of helped you break through that here’s what I need in this sequence for my business?

Charu Ramanathan: It’s been a while but I think we stumbled on. We made mistakes. For example, we got funding right out of the gate from when we were capitalized. There was none of the convertible note and deferred valuations, none of that. So that was a big price we paid for having a lack of experience.

However, we had these around the table right from day one. One of the key things there was to really get some mentorship. One of the mistakes we made was in spending money in, for example, before we showed proof of concept or clinical validation to understand where the strengths of a technology was. We spent 50,000 in a reimbursement strategy. Because some accelerator somewhere said, “Oh, without reimbursement, a medical device will never go forward. What are you getting reimbursed for the clinical value? What’s your clinical value? Oh, we don’t know that yet.”

So some consultant somewhere that has health care in their resume is not going to break that down for you. We actually flushed a lot of money over here like that.

Shubha K. Chakravarthy: You did fine. Something you got right along the way. So that’s good. Then early on, clearly the scientific part, the therapeutic part, you’re very clear about.

But from the business part, what did you see as that golden picture at the end of the rainbow? What was that vision and how did you articulate in what terms did you articulate that vision?

Charu Ramanathan: The vision was very clear. It was the mission and how we meandered that actually struggled. The vision was that this would be a noninvasive tool that would help cardiac patients everywhere get early detection, diagnosis and treatment of life threatening, rhythm disorders. Very noble vision.

Prior to my PhD, I’d spent a lot of time in India. I’m from Kerala, India. My thinking very naively was as a non invasive technology, this would lend itself very well to the Indian market and cardiovascular disease is also one of the leading causes of death in India as much as it is in the US. Just to put in perspective, the population of India is like three United States rolled into one, maybe even more today.

In my mind, I was like that’s what I’m going to do. I’m in the U.S. I’m getting money from the U.S. I understand the U.S. market. Then the FDA regulatory pathway is much more well defined. Let me do this first here and then I’m going to take this elsewhere that elsewhere never happened. The reason is because we never had that in our mission statement that we are going to have a strategy that would step wise develop the innovation, the business models that would get it to these countries in a deliberate fashion.

And instead we follow the playbook for a typical invention that’s invented in the western world that will only reach the United States, Western Europe, Japan, and some parts of Asia, not Southeast Asia, not India, not Africa because none of them have reimbursed healthcare systems.

The naivety there or rather the lack of audacity there was when you’re starting as a pre stage company, you don’t talk about global expansion. That’s naivety. However, my thought brought my flawed thinking or limited thinking was that having developed something that was at a 3,000 per test price point has gone so far on the engineering end of the spectrum. That in order for me to market this in a country like India, you have to go back to the drawing board

Shubha K. Chakravarthy: If you had to like replay everything and rewind it, would you do that differently to say from the get go, “I want it explicitly articulated that I don’t know, three years, five years, 10 years down the line, this is going to go to countries like India or continents?”

Charu Ramanathan: Yes. What I would’ve done midstream is found an internal channel, found a country champion in India to really start talking about, hypothetically, if this invention were to be commercialized in India, what all should we think about? And really start to see if I can seed it or at least bifurcate the innovation.

For example, we use disposable materials. Because that was our razor blade model was our business model. We also had materials because the entire business model was structured around this disposable vest that could be used inside the procedure.

We had to reinvent our measurement device to be reusable in India which is a completely different exercise. I actually talked to a couple of foundations in India towards the end but we were acquired before that. Then once we were acquired, I had no say in anything.

Shubha K. Chakravarthy: We are going to come right into that but in a minute. You put in quite a bit of effort, like you talked obviously about this vision of going into India but just to quickly round up this section.

Is there any pivotal moment where maybe you changed your direction or you significantly rearticulated what this was about or changed a complete business model? Some aha moment that helped shape the direction for the next maybe three, five years of the startup?

Charu Ramanathan: I don’t know how to answer this question directly but it just happens that there was one very big pivotal moment where my co-founder who had just had a baby had a massive heart attack. She had a very rare genetic condition and she collapsed and she was on life support. Basically two and a half to three years into the business, she was missing because she had a health issue.

That one pivotal moment was understanding that nothing is permanent in this that you have to jump up and let the show go on. The show went on and not so that gives you a kind of crazy confidence. What’s the worst that can happen? I always ask two questions. One is, what’s the best way to do this based on the information I have now? And what’s the worst that could happen? Once you come to terms with that.

I would say one of my pivotal moments, especially coming from a very Asian culture where it’s very performance focused. I’m studying hard. I’m getting first in this and I’m achieving this level of academic excellence. You really are looking at there’s no bar for you. You’re creating the bar and you’re figuring out how to jump over it.

Shubha K. Chakravarthy: That’s a pretty very significant change, right? Especially early in the game. How did you get over that and how did you reconfigure everything and continue, especially if it had funding by then?

Charu Ramanathan: We didn’t have funding by then. That was the second gut punch as it was a 2009 market crash 2008. We had arranged about 5 million of post seed or like now it would be called late seed. Then it was called Series A funding and we got hires and everything ready to go. Then ping had the heart attack and the funding disappeared because they decided to reinvest in their own portfolio company.

Here I was, no co founder, and I can’t hire anybody because the money disappeared. But so two negative pivotal moments. Not all pivots have to be positive, right? And then the third one was that we had just returned from a conference in San Francisco in May. A very significant conference for us called the Heart Rhythm Society. One of the cardiologists there had seen us speak about this device at a talk.

He’s a French cardiologist and he reached out and he said, “I’ve always seen this work and I didn’t realize that this was coming to the clinic soon. I’m very interested in doing studies with you. I want to test this device. I’m very interested in it.” And so I said that I’ll tell you that I have one device. There’s only one person that can operate it, me.

Then he said, “Well, why don’t you come over next week? And I said No. I can’t come over next week. I don’t even have a visa. I’m not a U.S. citizen.” Then he said that he can’t take no for an answer. He gave me two weeks and said, You gotta come. Bring everything you got. We’ll arrange cases for you. I want to see how this device works.

I said, “When are you going to get all the regulatory approvals in your hospital?” Next day, he said, regulatory approvals are all done. And I said that I don’t have a visa. He said, book your ticket. I said, I’ll book my ticket but they’re going to ship my passport to my house to which he said, you’re just bringing up these mundane difficulties.

And then I was like, okay I’ll just go to the consulate in Chicago. I’ll book a ticket from Chicago to come to Bordeaux, France. And if I don’t get it then I won’t be able to come. Be prepared for that. I went to the consulate and they clearly said, you can’t do this. Two weeks, you will ship your passport home blah, blah, blah. I said, no I have a ticket this afternoon.

She said that don’t you read on our website, our regulations. And then I said that Dr. Heisiger said that I should do it this way. This is the number he asked me to call. They called him and he said that I have 11 patients for Dr. Ramanathan that will wait for it just because you don’t have time to put a stamp on her passport. And they did.

I flew, went to French customs and they were like, “What is all this equipment, where’s your paperwork?” Don’t have any because I didn’t even think to get the customs paperwork describing medical equipment coming in from the U.S. to France. And I don’t know. I acted like a very naive person which I was. It was easy. It wasn’t very acting.

They let me in and said that I would never ever do this again. So I took all my equipment. I went. We did 11 cases back to back. I was exhausted at the end of it because we did two cases, analyze the data because we didn’t even have a commercial software at the time, went back and then he said, “I want you to write a report of all these cases and I want you to send them to me and I won’t tell you the results of it because I want to see if your device works.”

I sent him a report in late July with everything, pictures, nicely done. And the next day he called me and he said, “I want to be involved in your company. I have investors”. His precise question was, “Will you allow me to invest and be involved in your company?”

Shubha K. Chakravarthy: “Will you allow me?” Oh my God, that’s just like magical words. “Will you allow me?”

Charu Ramanathan: So Shubha, just think about it. Within a span of six months, I had lost a co-founder. I was devastated. She was a close friend. I had money walk away and I had a completely different channel open that I could not even have planned for.

Shubha K. Chakravarthy: I have to tell you, this is like at the very top if not the very top of all the stories I’ve heard and I’ve heard a few on this podcast.

Funding and Strategic Partnerships

Shubha K. Chakravarthy: Which brings us to funding. So clearly you’re a medical device, there’s all kinds of FDA approvals. We know that it’s a different level of capital requirement.

First off, you knew that there was all this money that’s going to be required. Did you have a clear idea that you’re going to need X million dollars all told by the time you’re through with FDA clearance?

Like what was your picture of capital requirements and how did that evolve over time?

Charu Ramanathan: I think that was where I would say I had the biggest blind spot. Because as I mentioned to you I was not very methodical in funding value creation. And part of the issue was the times as well, right?

Now there’s been so many venture cycles that there is some level of I would say best practices or methods you can follow in an industry, then it wasn’t the case. Different people did different things, right? So I think from our standpoint, if I were to do this all over again, I would have positioned it for FDA approval sooner rather than later and because that was one of the value creating milestones.

So how this all played out is that we got ready for Series B funding. It was probably not Series B in today’s terms because it’s not, it was not for a growth capital but it was for us to accomplish the big clinical milestones, prove ourselves in another application and build our sales and marketing capacity to put this in the hospitals everywhere.

The first domino to fall underneath that funding was the FDA approval. But investors were like FDA approval. You haven’t squeezed out that risk yet and so your valuation is going to be poor, right? So basically that was sort of the dance we had to do is to really think about how do we overcome the time lost?

Because we had already operated the company for about four and a half to five years. We were no closer to FDA approval. We always thought, “Oh, it’s a noninvasive device so that should be easy to do.” And so that is where we actually should have done it sooner. And because of that and the valuation challenges we had. We had to look at alternative sources of funding. We really started the strategic process, getting strategic funding earlier. So that we could compare it against VC term sheets we were getting.

Shubha K. Chakravarthy: What was that process like? So walk me through, how did you find these initial sources? How did you attract investors given that you yourself told me that you were probably further behind in the whole FDA approval process than you would have liked to be?

Charu Ramanathan: We always could convince investors and get term sheets. It was just that the valuation was terrible. That’s one of the things that I pride myself as a founder is, especially my angels in the beginning as shareholders, individuals.

I try my best to protect their interests because a lot of people are like, angels will always lose money. No, angels are truly the people that took a chance on you when you had nothing to show for it. So from that standpoint, I really started getting very disgusted by the valuations we’re getting. People were like, now is when you’re going to make true value. That was sort of the investor mentality. So that was a little bit challenging for us.

So, one of our board members had a close contact with one of the investment bankers. He said, “Let’s go talk to them and see if they would be interested.” One other thing in the markets to companies that were in related spaces, I would say somewhat indirect competition but in the competitive landscape, got acquired. So we thought that there is some appetite here for some earlier premature acquisition.

If the banker would be willing to work with us to present our case as a, hey we’re okay for you to invest to acquire versus write a check then would there be an appetite for it? And there was. We got in a process with eight different suitors. It was a very intensive time in my life because they had to run the business and answer every single question that these suitors had.

Ultimately, Medtronic invested 30 million in the company to accomplish the FDA milestones and do these clinical trials and when one application called atrial fibrillation that they were interested in and the conditional to those milestones. They pre negotiated a purchase price.

The next I would say two and a half years or almost three years, we were very comfortable and very aggressive because we didn’t have to keep on going back and raising capital. We were so efficient that we returned 12 million of their money.

Shubha K. Chakravarthy: Doesn’t surprise me with you being a woman founder at all but kudos on that.

Charu Ramanathan: Yes but nobody talks about it, right? Like everyone talks about, yeah we raised 100 million but I could do it in 10. No, we got 30. We did it in 12 less.

Shubha K. Chakravarthy: Congratulations on that. Am I correct in understanding that you had your initial angel round or rounds that got you so far and then you realized that you needed additional funding, especially with all of this big expense for the FDA approval.

But rather than going into the typical professional investor VC route because of its attendant low valuation, you said that you’re going to take a different path, talk to investment banks and see if you could position yourself as an investor to acquire.

Therefore you are only pursuing strategics. You pursued strategies and given that Medtronic invested with an intent to acquire. You’re pretty much done with that whole fundraising runaround. Is that accurate to say?

Charu Ramanathan: Yes, the only thing I would say is that in the initial round, we did have a VC. We had Draper Triangle Ventures out of Pittsburgh and they continued to invest round after round. It’s just that we got to a point where we needed a different lead investor.

Shubha K. Chakravarthy: Got it. Any comments on would that be covered by your earlier comment that you didn’t have any issues getting term sheets or only the valuation? It feels you were hinting that even the VCs had no problem seeing the value of what you had to bring to market. It was just the terms on which they were willing to invest. Is that accurate?

Charu Ramanathan: Yeah.

Lessons in Fundraising and Negotiation

Shubha K. Chakravarthy: So, just you talked about your kind of like all of these challenges that you went through.

What were your biggest learnings as you step back and say from this whole fundraising process given that you come from an academic scientific background and you had to learn all of these things. So what were the challenges number one, as a scientist, number two, as a woman entrepreneur and number three, as an immigrant slash woman of color STEM entrepreneur?

Charu Ramanathan: How many hours do I have to speak about this? And times have changed. I’ll caveat that just because the listeners shouldn’t. It’s a little bit anachronistic with the time.

I do think that the first one was during those times R&D part, like the science part of a business, was considered a little less than the business part. They would always ask me like, you’re the chief scientific officer, you’re the science side type of a thing. Who does the business side? There was this thing, the segregation and even within the team there was always like, that’s just engineering.

That was something that was infuriating to me because our company is a technological innovation. Without our engineers and our clinicians pulling together, the business can pull a strategy out of that out of the hat but it’s not going to work. And everything has to roll together. I didn’t really think one side was more important than the other that has changed with.

I don’t think there’s that kind of polarization anymore. But for me as a tech founder, I constantly found myself defensive about my STEM nature. That was one of the key things I had to overcome and say that I don’t care if you disagree with me. I’m just going to do it this way. It took me a few years in the business to feel confident versus feeling like what do I know, I’m just a scientist.

Shubha K. Chakravarthy: So give me an example like is the defensiveness internal or is it external when you’re dealing with these business types or these investors? How does that play out in real life?

Charu Ramanathan: I think it’s internal. I would say it affects your self confidence. I would say it’s internal because externally I’m trying to project a very confident founder. And I am also going back to the woman question. Women are supposed to be very emotional. They’re supposed to be very touchy and not audacious enough, very risk averse like all of these stereotypes that we have.

I didn’t think I was any of those things. I have met many women that I didn’t think were any of those things but that’s sort of our labels, right? So from that standpoint, I was very careful to not show my internal, not to be vulnerable, so to speak.

But on the flip side, if you’re not vulnerable then you get some other kind of labels as well. From that standpoint, one of the things I did and quite failed at was to emulate other male leaders on how they would be aggressive and dominant in boardrooms and things like that. I am a short tempered person and I thought that I had the skill set to yell at everybody and show them who’s boss.

I didn’t like how it made me feel because I am a teacher by nature too. I want to be very constructive in the criticism. I also wanted to apologize when I felt like, Hey, I made a mistake. You know what I said was wrong. Because I felt good after doing that.

Long story short, for me the journey was to say that you know what I can be the best version of myself. I can be some version of a CEO on Wall Street that everyone admires. That I can read a book and feel inspired to be the better version of myself. If I’m not comfortable with myself, I should stop doing this. Not that I got any better. I was more talented. It was just accepting who I am rather than trying to fit in a stereotype of the leader, typically male that people wanted me to be. Does that make sense?

Shubha K. Chakravarthy: Yeah totally does. Then kind of extracting all of these lessons and because obviously times have changed, maybe not that much in terms of women getting funded, what would you extract as your learnings or wisdom to pass on to other women entrepreneurs today in STEM who are looking to get funding?

What are your observations and what’s your commentary on the fundraising journey and challenge for women in STEM?

Charu Ramanathan: That is a great question.I don’t know if it happens today but one of the most inspiring and yet negative comments I’ve ever received is someone told me, get a white male CEO and all your problems will go away. I was blatantly told this.

I actually believed it but then what happens is you get the white male CEO and then you’re in the background doing all the work. How does that make you feel as a female founder?

Essentially to all women founders, I would say there are enough great people in the world that you can approach that actually believe in women, that are supporting and I’m talking about males supporting their wives, supporting their mothers, supporting their daughters. Don’t waste time with anybody else.

If a red flag goes up in your head that they’re mansplaining things or they’re condescending or they just don’t see your vision, don’t waste your time. Because these are socially ingrained things in people’s minds that are not going to change but the good news is that’s what I do.

I always am like thank you but no thank you. Because you got to understand that even if you get their check or their collaboration, you’ve got to work with them. It’s really hard to work with someone that doesn’t see you as an equal.

That’s my biggest advice to female founders is to spend a lot of time in finding a group of supporters that will boost you up. We’ll write checks and will mentor you. I was actually listening to this motivational speaker from Canada that basically said that women are really good at getting peer mentors. But we’re not very good at getting the sage that’s going to pull you up.

We spend a lot of time improving ourselves and learning things on our own because we have the capacity to do that. But we really don’t have somebody that you can pick up the phone and call like hey, you told me to call you when I’m desperate. Hey, bail me out, man. Men do it all the time. Women don’t do it.

Shubha K. Chakravarthy: You think they don’t do it because they don’t have the courage to do it or they just aren’t enough. Like who am I going to call? Like, now I might have a role model.

Let’s say I’m also in biosciences. I’m going to call up Charu and there’s only one of Charu as much as Charu wants to help all of the women in STEM. Do you have any thoughts in terms of how?

Charu Ramanathan: I think it’s both, Shubha. Women are still evolving as I’d say role models in this regard that we’re still new to this game. I also think there’s some habits that need to be erased from what is being implicated at schools. Girls are praised for being compliant. Boys are appraised for being risk takers. Those still exist. It exists today in 2024.

Part of it’s also really figuring out to get a comfort level, motivating your daughters and all of that stuff to be able to reach out for help. Then I think there are people. I can see [Mackenzie] Scott and the Gateses. All of them are really doing things that are unprecedented.

Like, where have you seen this before? They’re audacious. They’re like, I’m not going to explain myself to you. They’re getting bashed by people like Elon Musk saying bad things about them. Why do you say that you have money to give you but shut up about these other people?

Shubha K. Chakravarthy: I love it. I totally am in agreement. And to close out one other point and clarify what you made earlier. I love what you said about making sure that you find those investors that actually believe in you. Would you stand with that? Or what would you add anything to that?

I should say, even given how prevalent male investors are, especially on the West Coast and whatnot. That mode of thinking is so deeply entrenched. And obviously, I don’t want to say you want to have a scarcity mentality but you’re clearly in a different bargaining position when you’re going fundraising.

Maybe you don’t get the term sheets like you did and it’s a little harder challenge. Would you suggest that they still stick with that because the price is too high if you don’t and end up doing a deal with one of these people who doesn’t really believe in you.

Charu Ramanathan: That’s a tough question. One other thing I’ll say. It’s not a direct answer but I will say it is an answer is women need to be very aggressive negotiators and I didn’t do it very well. I think that’s where my cultural background comes to play. That’s a challenge as well.

So in a situation where you have a valuation issue, I think we should be bold and audacious to say, “Look, you’re going to take a lot of ownership in my company because clearly you’re the only guy that came to my dance, right? But I want you to incentivize me to continue to work really hard to make value. Because I’m going to make your money work and I want you to give me more options and through milestones make me work for it. But I’m going to address my dilution because you don’t want me so diluted and you can name your angel investors.

You can provide warrants. There are ways to create that protection. I mean, look at Facebook’s cap table. Zuckerberg’s voting rights are 17x. How did he manage that? He was a student without a college degree. How did he manage that? Because he asked for it.

It is hard for me. It is still hard for me just because of my very Eastern culture but I think it’s harder for women because that’s not in our nature to be like we believe that. People should value us and recognize our value because we’re working so hard. We’re accomplishing so many things. People should work hard and recognize that I’m not going to keep saying, look at me, I’m so awesome. Pay me more. This explains the pay gap too.

Shubha K. Chakravarthy: For sure. So what have you learned? You’ve clearly been down the road and you’ve done a lot of things. What practical tips have you picked up that you can pass along in terms of being a better negotiator? Is it getting a better lawyer? Is it mentally upping your game? What are the little things I can take away as a founder to be better?

Charu Ramanathan: So two thoughts. I know this is counterintuitive and I actually heard in a seminar recently that never bring all these touchy points first but the deal may fall apart. I feel the opposite.

If I say that look, I’m going to deliver. There’s no doubt about it but I’m also going to ask you for certain things. That I’ll make it worth your while to go but I’m going to ask you for certain things and I need them and putting that up front will result in one of two binary outcomes. I feel one is they will respect you for it and they’ll be like, okay, tell me what’s on your mind or second. They’ll go back and say that this woman’s trouble. She’s never going to listen to us and walk away which is a good thing because you’re now going to not waste your time, eight months negotiating a deal where they come back and say fine.

Then they put you in a worse corner because you have eight months spent time on this relationship that you’ve lost elsewhere. So address the elephant in the room. If there are certain expectations and you feel that this is what it’s going to take for you to feel good, bring it up more often than not. And you will walk out of there with a lot of respect, number one. Number two is the counsel part. Initially when I started out with CardioInsight, my first venture. We had two or three different counsels that we worked with that were more transactional.

Oh, I need a corporate lawyer. What did I know? I’d never worked with a lawyer before but then you really start to understand that your counsel that you work with is your confidant. They are the people who you can say, “Hey, I’m thinking of doing this. I want to play hard ball. What are your thoughts?”

They are the ones who can tell you what’s market, what’s your backup position, how hard you can push. So when you go prepared, you’re prepared with what it is that you need but you also are prepared with the support, the data from your legal counsel to back it up that you’re fully prepared.

So I would say, don’t treat your corporate counsel, your consigliere, as they say as a hired help. They’re as important. I do have Howard Barbara, who’s been with me since CardioInsight and then all the other companies and he’s wonderful. Anytime I’m in trouble, I’ll text him and I’ll say that I’m kind of in a fix. Can we just go grab a beer and talk about it?

Key Considerations for First-Time Founders

Shubha K. Chakravarthy: And then on that topic of when you said you walk in and be clear what you want and that you’re going to put it on the table, bring up the elephant in the room immediately.

What are those kinds of things I should be even thinking about? Let’s say I’m a naive first time founder. Are they financial things? Are they work life things? Are they what I need to get investor permission? Like what kinds of things should I even be thinking about?

Charu Ramanathan: Obviously compensation is one. Touchy equity stake, part and parcel bonus structure, board seat, any co negotiations you want to have with a co-founder or an investor from another round or a clinical partner or that sort of thing.

The other thing is any flexibility in the job that you want. I really enjoyed that in terms of how I raised both my kids while bringing CardioInsight up. So, there were things that I would say like, no we’re not going to do this trip right now because it’s my kids 11th birthday. So I don’t want them to be surprised and feel like, oh, this woman is like bringing her kids into the workplace.

No, this is a woman founded company. As long as you get the work done, go celebrate your birthdays. Go have more babies. I don’t care. Like that culture. I needed to make sure that everybody was comfortable with. So this is important for women founded businesses as I am going to be a woman. I’m not going to be a woman that’s like a man running the business.

Like I’m going to have my parents to take care of. I got to run. And if somebody calls because my kid has a nosebleed, I’m going to go as I don’t have a nanny. I’m a poor entrepreneur. I don’t have a nanny that’s going to go and do all this work for me but I’m going to go. But if it’s 11 PM or it’s 12 midnight, is it deliverable by 11 PM? It will be delivered. You don’t have to find out how.

So this is important from a cultural standpoint. Your employees understand it and your investors understand it and whoever your collaborators because it is a part of women culture like we have other demands on our time.

This is not the first time we’re dealing with it. We do deal with it all the time. I just want it to be perceived as a feature of the company, not a weakness of my woman leadership.

Shubha K. Chakravarthy: It’s not a bug. It’s a feature not a bug. I love it. Awesome.

Valuation and Funding Strategies

Shubha K. Chakravarthy: So then two more questions on funding and then we’ll move on. I want to talk about exits and so forth. So the valuation piece, do you have any quick comments on how you figured out what a reasonable valuation would be for your company? How did you do that?

Charu Ramanathan: So rather poorly.

Shubha K. Chakravarthy: Love the candor.

Charu Ramanathan: The other founders have it all in a textbook, but if I wrote a textbook, it’ll be funny with all the mistakes I’ve made. Hence the valuation for CardioInsight according to me was more of an afterthought.

This is because I was just dealing with a lot of things to build value. But for my other companies that I started since then, Lokyata, which is a microfinance lending company and VitalXchange that I’m running now as a healthcare startup. I’m a lot more deliberate about creating value and holding the value and I do it there in a couple of different ways.

One is because there’s just so much data out there. I always try to be on top of other companies in similar stages. You know how much data they have in terms of assets in terms of algorithms, patents, even data repositories. I can imagine this is the kind of data that they’re sitting on or the team structure like, “Oh, wow, they’ve assembled the who’s in and for them.”

Once the product is built, their entire team can call their networks and sell it. So those are areas where I find the hyper valuation to be justified. Then there are other companies that are started by first time founders. They are trying to go through every first time company milestones and their evaluation obviously is a little different.

So I try to take a very scientific data driven approach to what is out there. But having said that one of the biggest valuation struggles I have now is we have one investor from the West coast. Then we are trying to raise money from the Midwest now and the valuation is like totally two different planets. We always hear, “Oh, your valuation now is too much, right? How can that be?”

Because most of the data in PitchBook and CrunchBreak is biased towards the West Coast or even New York Boston but the Midwest is a different story. So that’s the challenge that we run into. I would say my advice to founders is to learn how to model your valuation fairly quickly and then to identify what are the worst case scenarios.

Like how much if I’m valued at 5 million, 10 million, 15, 20, whatever and your capital needs, how do the different scenarios look like if I raise one, if I raise two, if I raise three. Then, empirically say, if I raise 1 million more, 2 million more, this is how much milestones I can raise so I can create this much value. You can if you’re a tech founder.

You have the chops to really create a very analytical valuation exercise. Now, don’t go and present this to an investor because this is where you know where you stand in the quadrant of valuation.

The second part of it is being very deliberate about how much money you need and when. I think that’s where I’ve been very deliberate. So one of the things that I have done deliberately for VitalXchange is raise less money. But we’ve taken more time, and part of the reason is because of the pandemic. And since we deal with children during the two years of pandemic, our data was just garbage because people were doing other things. They didn’t have childcare, so we had to just wait it out.

Therefore, I had to just put the company on ice for a little bit and try different things. We built a little bit of product and did a little bit of algorithms and coding and that was the wrong time to raise money. And then coming out of it, we looked like we were in a holding pattern and since then we started to rapidly build and now I’m ready for fundraising.

So, I don’t think valuation is a mystery. It’s just something founders have or have deferred to VCs. One of the things that irks me a lot is that a lot of these are very good products to some degree and then they get all those hyper valued rounds. They hyper scale. They IPO at a valuation that the market cannot sustain. The investors get out and then it comes back to baseline and then they let go of a whole bunch of people.

This is a pattern and this is not one or two companies. I’m thinking 32 percent something like that. So that’s not a good situation.

And I feel like founders could get ahead of it if they’re able to articulate where the risks are.

The third strategy, go back and when you know that you’re cornered. You go back and try to negotiate pieces which you think are very important to you. Pieces for people, pieces for yourself, milestone based pieces. As you’re creating value in the company and you’re creating value for your investors, it’s okay to ask for things that valuable people should get and people do it all the time.

I think female investors should do more of it.

Shubha K. Chakravarthy: You mean female founders, right?

Charu Ramanathan: Yes

Shubha K. Chakravarthy: Yeah, I just want to be clear. Okay. I just love how practical it is.

Managing Investor Relationships

Shubha K. Chakravarthy: One last question on this funding issue. How did you manage relationships with your investors after you got funding?

Any learnings from that? Anything you can pass on to other founders who may not be as experienced?

Charu Ramanathan: Yeah. Actually, I am not very good at it so that’s my weakness. I am a bit of both people. So I’m all over you. This is happening. This is happening. That is happening and then I go into a cave. That’s my process because I am hyper focused. I’m trying to solve a problem. I don’t have any updates to give you.

Part of that is the trust between the investor and the founder. You can always text me and say, “Hey Charu, what’s going on?” And I will immediately give you a response. But it’s very difficult for me when I’m really focused on a problem. Sometimes it takes eight months, nine months to come out of it just to say that I’m doing okay.

I know that there’s a lot of best practices and I’ve tried them. But it’s very difficult for me because I don’t want to tell you that the work is in progress here and then write five bullet points embellishing something along the way.

I get scolded all the time by my mentors, “Don’t do that. you’ve got to keep people abreast. You gotta keep them updated.” And I said, “Just because you have communication techniques doesn’t mean you should communicate all the time. Just be quality because people are getting inundated too, right? You’re getting updates all the time from everyone that I try to be thoughtful about it.”

I don’t think I have it but if you have somebody that gives sage advice, I’m happy to take it because I struggle with this.

Shubha K. Chakravarthy: I do have one question on that which is so clearly we have to play to who we are and that’s your personality. My personality may be different. I’m just curious.

There’s all this advice about staff to your weaknesses. So to speak or staff to places where you don’t enjoy doing. Is that something that you even considered or think it’s worthwhile in terms of communicating to investors? I take your point around don’t bombard them when it’s not needed and yet maybe less than more often than once in eight months, they might want to hear. I don’t know.

Do you have any thoughts on whether there might be other options without changing who you are, but still making sure that investors are happy along the way?

Charu Ramanathan: So, newsletters, that’s one way of providing some updates. I do a lot of LinkedIn posts because most of my investors are. I don’t know if they’re getting them, but it shows a pulse on the activity. Thought leadership is what we’re going after.

Occasionally I’ll do a full newsletter on an announcement or something that we’re sharing but mostly I try to do more LinkedIn posts to kind of show that sort of our thought leadership, the direction we’re going. And to me that’s one stone with multiple birds. You’re tackling your audience, your B2B audience, your customers, your investors and everyone knows you’re alive and kicking.

So it’s not an intimate funding milestone or a big partnership.

Shubha K. Chakravarthy: That’s helpful. I forgot to ask one thing about funding and we’ll move on. You talked earlier on about dilution and anti dilution provisions. I’m just curious if you have any thoughts in terms of how you navigate your own holdings?

The question of how much you were going to get diluted along all of these fundraising rounds? What’s your takeaway from that? What counsel would you give from all of that experience?

Charu Ramanathan: For CardioInsight, we came out of the gate with a premature valuation. We didn’t even know what our value was. We from right out of the gate, our founder piece of the pie wasn’t very big. Then you had the race up to Series C. So there was systematic dilution but along the way the role that different people played that were there day one versus in the 5th year or 6th year or 7th year was very different.

We started to do a very deliberate option grant type of approach where every year we would revisit executive contracts and decide who is going to take more responsibility and things like that. I sort of managed my own equity position with these types of grants. That way as my role evolved and as the company got more money, more traction. We attracted more capital and I got more diluted. I started to get more. In fact, I would say that I made more money out of those fractional updates on CardioInsight than with my founder share.

Shubha K. Chakravarthy: And this is very close to my heart in terms of we as women and especially if you’re an immigrant and have all these other things going on top of your gender, you don’t move in these circles. You’re not normalized to this talk of hearing what the current practices or what the inside talk is in terms of what should you expect?

How did you keep up with that? How did you get in the know? Was this the lawyers? How did you find out what was appropriate and what was not appropriate?

Charu Ramanathan: I had a mentor. His name was Dr. Gilvan Bachelin. He was the CEO of Athersys. My husband worked for a STEM cell startup and he had just moved to Cleveland from Stanford. I would say Athersys was probably about 10 years ahead of more mature startups than we were and they were STEM cell startups.

They had raised oodles of money for a very novel, innovative technology that was probably ahead of its time too. He would have a lot of insights and kind of guidance. He was a no nonsense kind of person. He’d be like “Charu, you’re selling yourself short here. Come on”. That sort of thing. I’d be like, “okay, so what’s fair?” It’s like, oh, we did this or this other company did that.

So we discussed it in the context of my value in my company because he knew me really well and he sort of had the benchmarking. I think talking to someone about it. I know it’s difficult for me to say, “Hey, what do you think I’m worth?”

Then put something out there and you’re like hoping, what if this is too far away? What if this is too much? What if this is too little? Will you think little of me but I feel if you have one or two trusted people. You just start to build up from there, that’ll be really helpful.

I’d highly recommend it because when you’re desperate, you have a term sheet in hand and this is the only way to find it then it’s really hard. You’ve cornered yourself.

I think it takes some time, especially for female founders to understand what their worth is to be able to continuously be involved in the company, grow with the company and then negotiate a piece of the pie that keeps evolving with your changing roles.

Shubha K. Chakravarthy: Then to the point, I’m so glad that you found this person but it’s somewhat fortuitous, right? But for those of us who maybe don’t have those contacts, it feels to me like starting with a very good legal counsel is a good place to start. It may not be ideal but at least better than going blind. Would you agree with that? Or would you have anything else to add to that?

Charu Ramanathan: From a legal counsel standpoint, the legal counsel has to match your personality. So there are legal counsels that are very aggressive. They love to live in the gray. Yeah, we’ll push it as hard as it gets.

So they have to represent who you are as a person philosophically. I like the moderate approach where everyone wins and walks away. I’m not a particularly greedy person and I don’t think my value is worth than the person across the table as long as we can get the deal done and everyone’s happy.

So there’s that. I think finding that counsel is really important. It’s not that difficult to find like you move. That’s the first thing in a networking circle. Hey, do you have a good guy? So you’ll get all the founders who will tell you, Oh, he’s amazing. He’s so level headed in a deal. If you’re hot headed, get a level headed person.

Navigating Exits and Acquisitions

Shubha K. Chakravarthy: Great advice. Now I want to move to the exit. It is the fun part of being an entrepreneur. We kind of already foreshadowed a bit that there was an investor acquire deal from Medtronic.

Can you walk us through this? Was it a done deal? Did you know that three years from now you’re going to get acquired? How did that play out? How did you make that decision and if there was a decision on timing, how did that happen?

Charu Ramanathan: The Medtronic deal was very structured. We had a certain number of months. We had specific milestones and sub milestones underneath that to achieve. We had a joint steering committee that met every 90 days or 30 days on both sides to really discuss that.

It was a very structured process that was really helpful. If anybody’s considering this kind of deal, I would highly recommend that the structure be there. That way it sets expectations. The other part of that structure is not everything went smoothly. Mostly it did but when things don’t go smoothly, you can go back and recalibrate and say that this is what we’re seeing.

This is a plan B, can we modify it? And that way the expectations are laid. It’s also an opportunity for you to demonstrate to your acquirer that you’re a very good problem solver. From a leadership standpoint, that’s really important. That’s sort of how the deal works.

I was confident that we were going to meet the milestones but I was also nervous that if we didn’t meet the milestones it was game over, right? Like we are already being picked. You’re picked and you’ve made your choices. This is the one that’s gonna acquire you and you bought the acquisition.

What’s gonna happen next? Nobody else wants you. So that was a little bit nerve wracking. But one of my both positive traits and toxic traits is I am an optimist. Like in the movie, Dumb and Dumber, he asks a girl, “What are the chances of a girl like you getting with a guy like me?”

And she says one in a million. And she’s like, “You mean I have a chance?” That’s me. For me it was like I was a dog with a bone. It’s like milestone one then milestone two. But the company went through a lot of stress during those times where everyone understood that we’ve got to achieve these milestones in order for this company to be successful.

I was very lucky to have a team that was just phenomenal. Our head of product development Cato, is my co-founder now for both the companies. You build these lifelong relationships because you’ve been in the trenches through good times and bad.

Shubha K. Chakravarthy: Then personally for you, like you knew there was a time you knew there was a clear end to the road. Were you even thinking about your initial thoughts about taking this to India or other underserved geographies? Or was that pretty much out of the picture? Did you even play into it?

Charu Ramanathan: I did. What I did is I approached the CEO of Medtronic and we started working towards a plan. They called it reverse innovation. So basically they had very nice technologies that were commercially successful like an implantable or a diagnostic. The CEO at the time, Omar Ishraq had developed an ultrasound machine that was handheld and was used in Africa and things like that.

He was from a GE background that had done things in emerging economies. He was very supportive of this reverse innovation and actually offered me a job to continue to do that. I just didn’t feel like I wanted to do it as a free radical and not as a bound molecule.

Shubha K. Chakravarthy: Free radical. That’s going to be my new description. I am a free radical not a bound molecule.

Charu Ramanathan: Yeah because obviously corporations have their mandates, their earnings per share and their shareholders. It is a very value driven company and a very successful life saving product. I didn’t want it to be a charity project.

I really wanted to do something. Coming out of Medtronic, Ketel and I wrote three words on a whiteboard to decide what it is that we were going to do next. We wrote transparency, inclusion, and access and we did not want to do anything that didn’t right out of the gate meet those things.

I can tell you an example in VitalXchange how we’re doing it differently than what happened to me at CardioInsight.

Shubha K. Chakravarthy: We still have a few minutes. Tell me about one example. Then I do have a couple of questions to close that out and ask you a little bit about vital exchange.

Charu Ramanathan: So obviously I’ve lived in the United States for almost 30 or 20 some years. I’m very familiar with the US healthcare market. I have relationships here. I’ve worked only in the U.S. I’ve not worked in India and I tried that in 2018. I went back to see if I can set up a team here.

Couldn’t do it in a very different culture and I’m sure I can learn because I’m definitely an Indian person or person of Indian origin as they say. But it takes time. I just wasn’t sure. Anyway, we set up the company here. My thinking was that let me prove the concept here but my co-founder Ketil and I would always keep in mind that anything we develop software with will be translatable.

The playbook we develop will be implementable in India. What we did just because we still don’t have the bandwidth to focus on that is we keep in touch with some thought leaders in India and check the pulse every once in a while. Then you keep our eyes and ears open to opportunities that we can jump on.

More recently, we just got an opportunity to collaborate for neonatal followup in Africa. I think we’ll go down that project might get its own funding but again that would actually open up the dream of going in markets that are not so structured and don’t have reimbursement and where you have to have economies of scale and have to be really efficiently delivered and what we’re envisioning to do that from a technology standpoint is we’re a hybrid platform now, part AI and part human.

We’re envisioning a completely AI platform that we will benchmark against the human piece. Then we’ll be able to scale. Now it may not do 100 percent of the things that the human platform does but it creates a very good first line of support for families across the world. Then we want to create a multi language call center for escalating as well. If that’s the value of the internet, right? Your people can be anywhere around the clock.

Shubha K. Chakravarthy: Absolutely. Just to close out on CardioInsight. So you know the deal is done. I know you stayed there for a little bit longer as part of the deal.

What did you feel like when you signed the deal? When you knew it? Like it said it’s a done deal and then also when you left like what did it feel like as a founder? Like, you were there before and now it’s all over. What was that like?

Transitioning Post-Acquisition

Charu Ramanathan: Initially, euphoria. Then a lot of anxiety.

Shubha K. Chakravarthy: Anxiety with the money in the bank.

Charu Ramanathan: That when they say golden handcuffs, it’s true in every sense of the word. Some days it’s the gold and some days it’s handcuffs.

Again, I think the biggest thing with acquisitions and it’s very cliched is the culture is so different, right? We went from a 40 person company to a 90,000 person company. We went from one person wearing multiple hats to one job function being divided into multiple hats. In CardioInsight before acquisition, there was really no issue at all.

If someone says that hey, I thought we needed this. I started to do this. Versus why are you doing this? This is not your job. That is a very different cultural adjustment. I’ll be very honest. I have fabulous friends from Medtronic even today but I don’t think I thrived in that organization.

I don’t think people liked me very well. I’m not the only founder. I’ve talked to multiple founders that have undergone the same journey. It’s exactly because the culture is different and you go from being the chief cook and bottle washer to you not showing up for five days. Nobody knows and nobody cares.

Shubha K. Chakravarthy: How long were you there in Medtronic after the acquisition?

Charu Ramanathan: Two years.

Shubha K. Chakravarthy: Were you somewhat prepared for that knowing that, you’re gonna do this and then you know there’s like an endpoint. I can get out and I can kind of grip my teeth and get through it so to speak.

Charu Ramanathan: No, I don’t think it was like that at all. I learned a lot. I had a very good boss. They invited me to a lot of sales meetings. I really learned a lot about inside medical device sales which I didn’t have direct experience with because the party was one side. We were more of the early adopters.

I learned a lot from the different regional sales people across the globe. I got to travel a lot. I just understood in terms of large scale operations, what are the different ingredients of the operations, the quality, the regulatory, the manufacturing and so there was a lot of learning to do.

It’s just that my role was different and I had to come to terms with that. Two years was plenty of time for me to go do something else.

Shubha K. Chakravarthy: Two years have passed. You’re now out of Medtronic. Everything’s good. What are you thinking? Like, did you decide to take a long break or were you itching? Monday morning after you left, so okay, what’s my next thing?

Charu Ramanathan: The truth is that I didn’t get what I wanted. So 2017 June was when my two years were up. So exactly, teed it up gave my notice right on the date of two years. That afternoon I came home. My friends from Washington, D.C. arrived to talk about Lokyata, the microfinance company.

But I wanted to take six months off. My son was going through high school at that time. I really wanted to spend some time. None of that happened. I jumped into it only because it was a little bit. The company was already started and they were running into some very bad crisis issues. They had a customer that had to deliver products in six weeks.

My very close friend who was one of the founders. He wanted to start the company. Couldn’t do it because he was not a US citizen. And there were some issues there and he’s like, “Hey, can you help me?”

And I said, “Okay, come over. I’ll be free after June.” Whatever the date was I didn’t know he was going to come that afternoon and he did and that sort of reformed the company and I negotiated that stuff.

So anyway, I wouldn’t advise that at all I had a lot of burnout because I really didn’t get some time to decompress the same thing with my co-founder. He was exactly as Kato was on the same journey with me. I wish we had taken a few months to properly position ourselves and plan it and as a result. We started the company. One year went really well and then we really started to feel the fatigue of not having that time to reflect and introspect on what it is that we wanted to do, how we wanted to structure it but we had to do it on the job which obviously takes its toll. In fact, that was one of the silver linings of the pandemic because we got the time we wanted.

Shubha K. Chakravarthy: What happened to that? And how did that lead to VitalXchange?

Founding VitalXchange

Charu Ramanathan: VitalXchange was a concept that we developed a long time ago around the 2018 timeframe while we were working on a microfinance company. This was because around that time Keiko’s family had a list of challenges with his mom and his wife having breast cancer and he having some health issues.

Both our kids had some challenges at school in terms of behavioral challenges, ADHD, that type of thing. We were constantly going from one thing to the other. And there were a lot of negative healthcare experiences in terms of a physician pushing hormone therapy that they were not explaining what was happening.

Very poor post radiation care. I was really struggling with the schools to figure out what was going on with my boy. You just fall off from the pedestal you’ve created for yourself as, Oh I know everything and everybody to know in healthcare. When it comes to solving problems, you absolutely have no latitude.

Like you’re like everybody else. We created very loosely the concept of VitalXchange. The exchange of vital information that helps a healthcare consumer take that next step in life. It can come from any source. It can come from a peer who has lived it before. It can come from a physician, a therapist, maybe a mentor, peer mentor or whomever.

We just loosely created that concept and put it on a shelf. We got a logo, the domain and we’re just sitting there till we exited out of Lokyata and move it to Washington, D.C. We got its own leadership and then we just served in a board capacity and in 2019, we formed VitalXchange.

Shubha K. Chakravarthy: Still no breaks

Charu Ramanathan: And then, still no break. The thing is in 2020 April, when we launched our beta. It was in the middle of the pandemic. That was a little bit of a struggle. Now, I wouldn’t say it was a relaxing break. It was more of a when will this pandemic end kind of thing. But we started out. We looked at different conditions. We felt like pediatrics was where several aspects of the philosophy that we wanted to bring into healthcare came to converge in pediatrics where parents could make a big difference.

Because there’s no playbook to raise the child, right? There’s no manual to raise the child. We noticed that when we opened up about our son. We noticed that we’ve done many social experiments. We noticed that other parents came forward. Oh, my kids got eating problems. My kids are being bullied at school. My kid has autism. My kid was institutionalized or things like that. So you really start to feel like there was no way for us to be like, it’s so easy to have a kid, right? You could pop out a kid or rather it’s easy to get pregnant. I’ll say that way.

Shubha K. Chakravarthy: I was just going to comment on that.

Charu Ramanathan: So it’s hard to raise and especially with so many external factors. We don’t have a cohesive social support system anymore. We’re all nuclear families. I barely know my neighbors and social networks are sort of virtual. And then there’s a lot of digital pollution.

Our children’s psyches and our psyches are constantly polluted by how other people live which has a profound impact. So we said, “Okay, let’s start a vital exchange for parenting and let’s try to help those parents whose children have neurodiversities. Because we can help them navigate care.” We did a couple of pilots there.

Today we’re selling through an employee benefits platform and we’re doing a few clinical studies to prove that parent mediated intervention with the support of our AI platform and our therapist can actually improve outcomes. So you’re not like solely helplessly dealing with the healthcare system but you’re being coached to help your kids thrive in the house.

And our hope is that if we upskill parents then they’re going to be basically champions of their kids for a lifetime and we’ll be out of a job but that’s okay. It’s like you learn how to do plumbing. You don’t have to keep on learning plumbing every time a faucet breaks.

Shubha K. Chakravarthy: Awesome. So I wish you all the best. I know that given your experience and how you think it’s got very good odds.

Advice for Women Founders in STEM

Shubha K. Chakravarthy: So to conclude, what thoughts and observations would you share with a woman founder in STEM who’s a little bit behind you in terms of her own journey whether it be being prepared, getting funded and getting the right outcomes, however she defines them for her startup?

Charu Ramanathan: Step number one is believe in yourself. You’ll hear a lot of things but sometimes it’s okay to be foolishly optimistic. I think women need to take an optimism pill every morning and say, “I am awesome.”

Number two is get to that stage like get that one or two mentors that you can go to because they’ll be moments that you want to pour your heart out and share. You want someone that says I’ve been there and it helps to have someone of your own gender and preferably similar socioeconomic background so they can be empathetic with you. That’s really step number two.

And step number three is like don’t be afraid to ask for help. For example, for the longest time I had trouble admitting that women were unfairly treated. I was unfairly treated because admitting that meant like I had a weakness of some sort or I am admitting that I’m less or something like that. I talked to a lot of women that also corroborated the sentiment. I think it’s okay to ask for help. You don’t have to be a hero.

I know we’re asked to be heroes in multiple facets of our life, right? Like raising children, raising families, whatever it is. I think when it comes to a startup, it does take a village. Make sure that as women, we’re surrounding ourselves with the right village and asking for help. I would highly recommend a co-founder.

Shubha K. Chakravarthy: Any thoughts on what kind of co-founder? Like why co-founder?

Charu Ramanathan: That’s a hard one. I do think that it has to be someone that is for me. Somebody actually told me this, I’ll copy that. It should be someone that you wouldn’t mind hanging out on a Friday afternoon or a Saturday afternoon just grabbing beer, sitting in your backyard, talking about life. I think that’s a good co-founder. Someone that knows you, has your back and there’s a lot of trust built between you.

Shubha K. Chakravarthy: You’ve been incredibly generous in sharing your thoughts, experiences and advice. Is there anything that I didn’t ask but you wished I had?

Charu Ramanathan: I think this was very comprehensive and we talked about women of color and inclusion. We talked about fundraising. We talked about taking risks. I don’t think that you should be embarrassed by your failures. Everyone fails and I think women should also embrace failure so good things can come out of it. I think that from fear of failure we’ve got to get into the habit of saying, so what? I’ll figure a way out.

Shubha K. Chakravarthy: Awesome. On that note, I want to thank you, Charu. This has just been one of the most incredible conversations I’ve had with an entrepreneur. It’s inspiring, instructive, educational, it’s everything. I really want to thank you for your time and I wish you all the best for VitalXchange. I’ll be standing on the sidelines cheering you on and I would love to see your story of your next exit as well. Thank you so much.

Charu Ramanathan: Thank you. It’s been a pleasure. Take care.