VENTURE, CAPITALIZED

INVESTORS ARE ALWAYS ENCOURAGING STARTUPS TO PUSH THE INNOVATION ENVELOPE. GENERAL CATALYST’S HEMANT TANEJA IS APPLYING THAT ADVICE TO HIS OWN FIRM.

- BY IAIN MARTIN AND RICHARD NIEVA

SITTING IN THE OFFICES OF GENERAL CATALYST OVERLOOKING ORACLE PARKWHERE THE SAN FRANCISCO GIANTS PLAY-AND THE SWEEPING BAY STRETCHING BEYOND IT, CEO HEMANT TANEJA EXPLAINS HOW HIS VENTURE CAPITAL FIRM IS GOING TO TRANSFORM HOW AMERICANS ACCESS HEALTH CARE: BY BUYING AND RUNNING A HOSPITAL.

Last year, the firm announced its $485 million purchase of Summa Health, an 8,000-employee hospital system based in Akron, Ohio, with the aim of plugging it into Silicon Valley’s innovation engine. That means injecting tech and artificial intelligence into almost every step of the health care process, from checkups to insurance. No hospital system was going to do this on its own, so the thinking was simple: “We have to go buy one and do it ourselves,” Taneja says. “And live it.”

That ballpark view is fitting because Taneja, No. 8 on this year’s Midas List, Forbes' annual ranking of America’s top venture capitalists, is no stranger to proverbial big swings (even if the India-born Taneja prefers cricket). Buying a hospital is jaw-dropping for a VC. Tech investors preach disruption, but they are deeply conservative when it comes to running their own funds. Little has changed since venture's grandfather, Arthur Rock, started cutting funding checks to the likes of Intel and Apple. Entrepreneurs such as Gordon Moore and Steve Jobs might "think different," but Rock himself was a buttoned-down Harvard MBA who started his career on 1950s Wall Street.

General Catalyst wants to break that mold. Since 2018, it has morphed from a typical VC partnership to a multi-hyphenate investment house: There's the firm's "creation" fund, which spins up new AI companies aimed at remaking dusty industries like accounting or customer service. Then there's the General Catalyst Institute, a think tank looking to shape technology policy around the world, and GC Wealth, a white-glove broker meant to woo well-heeled founders away from private banks.