Why dentistry is attractive to investors: Q&A with Revere Partners' Dr. Jeremy Krell

Good return rates from dental companies have been eye catching for investors looking to delve into the industry, according to Jeremy Krell, DMD.

Dr. Krell is the founder and a managing partner of Revere Partners, the first independent venture capital fund for oral health companies in the U.S.

The company, which launched in September, enters strategic partnerships with oral tech companies, startups, investors and DSOs. It most recently announced its investment of more than $10 million in fintech for the industry.

Dr. Krell recently spoke with Becker's about Revere Partners' goals, what they look for in a deal and why the dental industry is attractive to investors.

Editor's note: Responses were lightly edited for clarity and length.

Question: What are some of the short-term and long-term goals of the company?

Dr. Jeremy Krell: Big picture, we are really trying to bring venture capital to the dental industry as a whole. We view that as accommodating all types of investors that are looking to take a venture perspective on investment and invest in one or multiple asset classes. On the other side, accommodate all of those different types of asset classes that are interested in having a venture capital-type investor involved in their business. So we're really building an ecosystem or a layer to the entire dental industry that brings venture capital to it for the first time. That's really been our mission and our vision for the company. 

Shorter term, we have focused on the dental technology side. Revere Partners has really focused on dental technology. Anywhere from software to consumer products to FinTech devices and therapeutics, edutech, anything that really has an application to oral health that is a technology, product or a service. Namely, what we have not focused on is services operational businesses, so something like a distributor or a DSO. That has not been a part of our initial focus but those businesses do fit into the full picture of venture capital.

Q: What do you take into consideration when deciding to partner with a company?

JK: There are a number of different criteria that we look at. One of them is the people. Any startup is really a people business and on the other side of the equation is a primary reason sometimes when startups fail. We look at people whose backgrounds mesh well with what they're trying to do. We look at people who are approachable and open to feedback. We look at people that have a lot of the traits of a strong leader. 

Another category is, did they develop a product or service that is tailored to a real market need, and have they gone to research that and validate that? The flip side of the coin there, which also causes a fair bit of failure, is when people in a silo or a vacuum build something they think is the best thing since sliced bread, but that does not solve a validated market problem and then you end up with this treasure chest of things, gadgets, gizmos, and widgets under the sink that are maybe good ideas but never had a real need. 

Maybe a third is, can we help them? Revere is very strategically oriented. We want to be able to help the businesses we work with. We have a pretty broad and deep ecosystem of support services built to help dental technology startups specifically. That is definitely something that matters to us. And maybe last, but certainly not least, is their business model compatible with the industry and where it is today? Is it going to work for the sales and/or distribution model they're looking for? Is it priced appropriately? A lot of incompatible business models and things that are too highly-priced have a lot of trouble with adoption and getting off the ground.

Q: What about the dental industry is attractive to investors?

JK: It's hard not to say the returns … It's not necessarily on every investor's roadmap, it's niche by definition, some have called it a cottage industry. Those in it, and who know it, know that it's bigger and capable of much more than that but those outside who are even aware sort of tag it that way, and then there's a whole swath that is unaware. A large part of what we do is educate and build awareness for this great space. So the returns are really what, at the end of the day, is most relatable to people. 

The thing of course to watch is inflation. I don't think we're necessarily as inflation-proof as we think we are. It's a very niche space that is quite high performing and so from the lens of any investor, anybody who has cash that they're looking to invest, the return profile is good. It doesn't take that long, for multiple returns on either side of the world, on the tech side and also on the practice side. So I think that that does draw a lot of attention. It should draw more attention. 

I think the investor in general, inside or outside of the industry, is right now reorganizing their totem pole of investments. They're diversifying their investments across different risk classes. And historically they would consider startup investing or even venture capital investing at the tip of the totem pole. But having been through some of the more recent crises, 2008 and everything with the pandemic and potential recession, that's been reorganized. When they've not performed in the S&P and when they've not performed in real estate and they've not performed in crypto and other asset classes, they've had to rethink what is safe, what's risky, where do we see the good returns? Going through a venture capital fund, into a niche space where that VC fund has a strong and strategic foothold, that is not at the tip of the spear in terms of investment. It has a pretty good return. So I think we're seeing a lot of attention to that detail and hope to grow it.

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