Risk & Return: Transforming Emergency Response

The Growing Need for Disaster Resilience and Support

Unfortunately, the frequency of disasters is on the rise, and the impact zones are shifting closer to populated areas. Events like wildfires, hurricanes, floods, and tornadoes – not to mention global pandemics – have compelled communities across the United States and worldwide to acknowledge a sobering truth: lasting security is increasingly rare.

Effective crisis response is crucial in minimizing loss of life during these catastrophes. Rapid access to accurate information, swift action, and robust implementation can be the deciding factors. However, first responders frequently lack access to essential tools and updated training, particularly innovative solutions hindered by bureaucratic government procurement processes.

Furthermore, comprehensive post-traumatic care is often insufficient, even long after the immediate danger has passed.

Introducing Risk & Return: A Novel Approach

Risk & Return is a distinctive venture fund that uniquely combines for-profit investment with philanthropic goals. Its core mission is to identify and fund the development of next-generation technologies designed to support first responders, both during active emergencies and in the aftermath as they cope with the physical and psychological strains of their duties.

The organization recognizes a shared set of challenges faced by emergency personnel in the U.S. and U.S. military veterans, and aims to provide solutions that are often overlooked by traditional venture capital firms unfamiliar with the specific needs of these communities.

The Founding Team

The fund was established by Robert Nelsen, a prominent figure in the biotech venture capital world as a co-founder and managing director of ARCH Venture Partners, which recently secured $1.5 billion in funding.

He is joined by Bob Kerrey, former co-chair of the 9/11 Commission, and a former governor and senator from Nebraska, serving as board chairman. Jeff Eggers, a Navy SEAL and former senior director for Afghanistan and Pakistan on President Barack Obama’s National Security Council, is the managing director.

Nelsen conceived the idea during a conversation with Kerrey at a fundraising event for Navy SEALs. Kerrey recalled, “There has been considerable suffering among those on the frontlines.” He added, “Bob proposed a novel approach to philanthropic endeavors, and I believed it was a remarkably intelligent concept.”

Investment Strategy and Portfolio

The venture fund currently holds $25 million in capital, with approximately 35% already invested. A significant emphasis has been placed on mental health solutions for first responders, with 75% of funded companies operating within this domain.

The fund’s initial investment was made in Alto Neuroscience, a company pioneering precision medicine tools for treating post-traumatic stress.

Additional investments include:

• NeuroFlow, a behavioral management startup.
• Qntfy, an alternative well-being assessment tool.
• Spear Human Performance, a new venture focused on integrating commercial and health data to enhance human performance.
• Xtremity, which is developing improved prosthetic socket designs.
• Perimeter, profiled recently, and six other promising startups.

Eggers emphasized that the fund seeks technologies with a “dual purpose,” benefiting both first responders in the field and the wider community.

Beyond First Responders

Kerrey highlighted that the technologies developed are not exclusively targeted at the military market, noting that “Every veteran is a civilian.” He also pointed out the widespread impact of the recent pandemic, stating, “It’s difficult to find someone who hasn’t experienced some degree of PTSD.”

Securing government contracts can be challenging, and the market for specialized mental health services for frontline workers may not always be commercially viable.

Bridging the Gap Between Private Innovation and Public Need

Kerrey believes the private sector has a significant opportunity to drive innovation in this area, particularly in exploring alternative therapies for PTSD, such as psychedelics, which are areas the government is currently hesitant to pursue. However, Risk & Return has not yet invested in this specific space.

Half of the fund’s returns will be directed to Risk & Return’s philanthropic arm, which provides grants to charities aligned with the goal of supporting frontline workers both during and after their service. The organization aims to address the complex challenges of emergency response through a combined approach, matching needs with appropriate funding sources.

This hybrid for-profit/nonprofit model is gaining traction in other sectors. Examples include Norrsken, a Swedish foundation and venture fund investing in areas like mental health and climate change, and MIT Solve, a program promoting hybrid approaches to startup innovation in areas like pandemic preparedness.

As disasters continue to pose a persistent threat, increased innovation in financing critical technologies – including those related to pandemics and health security – is a welcome development.