Impact & Diversity

Statement on Impact, DEI and Stakeholder Capitalism

Spindletop Capital is a growth equity firm specializing in healthcare. Based in Austin, the Spindletop team brings a diversity of backgrounds, values, and experience: healthcare operators, investors, and clinicians with over 200 years of extensive operational, clinical and financial expertise. Our firm mirrors the racial and ethnic Diversity in the patient populations we intend to impact and benefit positively.

Why do we take an Impact and DEI approach to investment?

The Spindletop team believes it is not what you do; the “WHY” you do it matters.

Why?

Founded by a diverse team of physicians and healthcare operators dedicated to challenging the status quo and creating a legacy of better care for individuals, better health for populations, and lower healthcare costs for future generations.

How?

We challenge the status quo as advantaged investors with a stakeholder/impact-centric model for expansion capital; we fund healthcare innovation across inefficient healthcare markets.

What?

We partner with transformational healthcare companies and provide operational experience and expansion capital across their life cycles – generating superior returns on behalf of our limited partners.

Exceptional risk-adjusted returns are the byproduct of our work as purpose-driven providers and operators who invest in healthcare. Impact Investing is not Philanthropy. Impact Investing does not mean sacrificing financial returns. Above market rate returns are possible while making real impact.

As healthcare investors, most of the portfolio are companies that provide products/services that address fundamental healthcare injustice and racial inequity.

Building and growing healthcare companies providing healthcare services, technology, medical devices, and diagnostics are impactful. Impact investments are “investments made into companies, organizations, and funds to generate social and environmental impact alongside a financial return (Global Impact Investing Network).”

Spindletop generates Impact by leveraging the framework developed by the Institute for Healthcare Improvement known as the IHI Triple Aim, defined as “better care for individuals, better health for populations, and lower per capita costs for healthcare.”

Investors are increasingly conscious of corporate social responsibility when deploying capital. In our experience, responsible and sustainable investing enhances financial performance by lowering risks and increasing returns driven by: more efficient operations, a better aligned and motivated workforce, a more diverse talent pool, more robust governance, and increased sensitivity to regulatory and compliance issues.

We know that as active growth equity investors, we can strongly influence the value of portfolio companies through our impact strategy.

The Spindletop team are not generalists who happen to invest in healthcare; instead, we are healthcare clinicians, scientists, operators, and investors who have dedicated our lives to making a positive change for patients worldwide. In 2011, we started discussing our DEI, ESG, and impact strategy with our LPs and CEOs.

While Diversity is part of our DNA, and Impact/Stakeholder Capitalism has been a focus for the firm, we know that to maximize Impact, we had to develop an approach that measures and implements change across the firm and portfolio. We have moved toward an active DEI/ESG/Impact focused approach to helping us maximize growth at each stage of a company’s evolution.

Our Impact/DEI approach

Historically many investment firms have focused on surveys for collecting, analyzing, and reporting data without having a structured approach to driving change. We recognized that our portfolio required a new approach due to its growing heterogeneity – in terms of company stages and sectors.

We decided to assess our companies’ DEI/ESG/Impact maturity to provide guidance on relevant, applicable goals and suitable activities at each phase of their development.

We needed consistent, relevant KPIs to consolidate into meaningful analysis and recognized that not all popular ESG metrics are appropriate for all companies. For example, questions about the gender pay gap, diversity, or environmental footprint management are less relevant for a small owner-operated company than for one preparing for an IPO. In contrast, safety in the workplace is a critical measurement at all company stages.

Spindletop developed a list of actions we are executing for Fund III:

We have created a DEI/Impact Council. Members of this esteemed group are national thought leaders in healthcare injustice and racial disparities. They bring experience from the private, academic, and government sectors with a proven track record of implementing positive change.
Spindletop’s program manager for DEI/Impact initiatives not only measures and reports progress across the firm and portfolio to our LPs, but, more importantly helps create and implement programs within the portfolio companies.
Spindletop intends to use the B Labs B Impact Assessment or similar tools to measure the portfolio’s progress. The BIA incorporates DEI, ESG, and Stakeholder Capitalism measures. https://www.bcorporation.net/en-us
Spindletop is donating 10% of the GP profits from Fund III to support the Aspen Institute and other non-profits focused on addressing racial disparity and healthcare inequality issues.

DEI, ESG, and Impact assessment remain core to the Spindletop Fund III due diligence process. For each investment, 100-day and 3-year plans are completed upon the close of the initial transaction. Annual measurement and reporting (to the DEI/Impact Council and LPs) will be included in the annual reports.