Morgan Hewett didn’t explore alternative funding options when she launched her first company.
In June 2020, Hewett, a former health lead at Facebook (now Meta) who generated $100 million in profit for the company, launched her own company, OptionsMD. The telehealth platform uses generative artificial intelligence (AI) to predict which treatments and medications individuals with treatment-resistant illnesses are most likely to respond to.
The venture was inspired by her older brother, who suffered from severe mental health issues and suicidal ideation. Despite having great doctors, it was still hard to find the right medication, leading him to try nearly 12 antidepressants before finding a match.
“That made me wonder, ‘Why didn’t the doctors know which medication was gonna work for him?'” Hewett told AFROTECH™. “So I started becoming obsessed with the psychiatry industry and interviewing doctors, and they kept on telling me, ‘When a patient walks into our office, we have five patients come into our office. We have no clue which ones Zoloft is gonna work for, which ones Prozac is gonna work for, which ones Wellbutrin’s gonna work for.’ It really truly is a trial-and-error approach. And me working in tech and thinking to myself, ‘Well on Instagram, their ads really aren’t a trial-and-error approach. It collects a lot of data on you, and then they’re pretty sure which types of contents and ads you’re gonna like. So why can’t we just apply the same principle to medication recommendations?’ That’s what sparked the idea for OptionsMD.”
Under Hewett’s leadership, the company raised $6 million in seed money in addition to a smaller raise supported by family and friends. She credits her sales background at Facebook and Meta for positioning her to sell equity in her company to investors. By 2024, OptionsMD was acquired by mental health provider Resilience Lab, a news release mentioned.
“Being an exited founder now has earned me the right to be in rooms that I definitely did not get access to the first time around. Fundraising was me chasing and me knocking on a lot of doors. Now I have investors reaching out to me… Having sold a company has changed my life for sure,” she expressed.
Reflecting further on her journey as a founder, Hewett admits she never considered alternative funding methods such as bootstrapping, loans, or customer-funded financing. Although, she acknowledges that OptionsMD was well-suited for venture capital.
“You have many companies who raise hundreds of millions of dollars, who never become profitable, and who go bankrupt. I definitely fell victim to using the amount of dollars raised as a proxy for a founder’s success. And that’s why my first company, I didn’t even explore any of these alternative funding options. I went straight to VC,” Hewett reflected.
Now, she wants to share her insights with other founders, so they can assess what route will be ideal for their company.
Why She Will Consider Loans For Next Company
Regarding why she pursued venture capital from the start, she embraced a “go big or go home” mentality. At the time, she was 26 years old, had no children or dependents, had savings from her time at Meta, and felt secure knowing that even if the venture failed she could return to big tech.
“It didn’t really feel like I had much to lose at that point,” she admits.
Hewett realized she needed to scale OptionsMD’s team. This meant onboarding medical doctors, PhDs, data scientists, and software engineers. She felt raising venture capital would be the most ideal method, but in hindsight she now sees its pros and cons. Comparing it to securing a loan, she says a loan will be her next approach if she decides to launch another company.
“When it comes to loans, the challenge when you have with loans is that you have to pay the money back,” Hewett acknowledges. “Whereas if you raise money from VCs and deposit it as a founder, if the company doesn’t work out, you don’t really owe anybody anything as long as you didn’t do anything illegal in the process. There’s no personal guarantee that you make. If the company goes bankrupt, you’re not personally gonna go bankrupt. So for a business model that is really risky, as a founder, it’s actually lower risk raising money from investors than it would be getting a bank loan.”
She added, “The benefit of doing a loan, in contrast, is that while it does come with a personal guarantee, if you’re building a company with a business model that is tried and tested and you’re very confident that you can get to your projected cash flows, then the benefit of that is that you get to keep the whole cake.”
Should Entrepreneurs Pursue VC Funding?
As it relates to VC, Hewett also mentions that if the goal is to secure freedom, she does not believe raising VC funding is the way to go. This is due to the fact that those investors want companies to grow as quickly as possible with the understanding that only a slim amount will be a home run.
“That’s the economics at play, and there’s less of this pressure for them to keep all the companies alive. It’s not like, ‘Hey. We want a % of our companies to survive. It’s, ‘We want all of our companies to grow as fast as possible because we’re looking for those hundred x outcomes, and we’re fine with a lot of them dying along the way.’ So you as an entrepreneur also have to have that mindset where you’re OK with a go big, go home mindset of ‘I’m gonna put my foot on the pedal, to the extreme. I’m gonna go big. If it doesn’t work out, I’m OK going home potentially with absolutely nothing,'” she said.
More Funding Routes To Consider
Other routes of funding to consider include crowdfunding, which is raising smaller amounts from various individuals often from the internet. An example of this is NasaClips, a company founded by Dr. Elizabeth Clayborne that is behind a medical device branded as the “Band-Aid for nosebleeds.” It raised $60,000 in funding under two weeks through a crowdfunding campaign via Wefunder in November 2024, as AFROTECH™ previously told you.
Another possible approach is bootstrapping, which is self-funding the venture using personal savings, often supported by income from a 9-to-5 job. At some point, founders may consider leaving their role all together to bet on their company or if it requires greater attention to reach the next level in growth.
“Once it’s time where your business has grown enough, where you need to hire employees, then that would be the time to quit your job and to go all in, because it is very difficult to convince somebody else, if they’re a high-caliber talent, to quit their job and to work for you when you’re not even willing to quit your own job yourself and work full time for yourself,” Hewett explained.
Remember to do your due diligence to determine which path best supports the long-term health of your company because that will vary depending on the type of company and your comfort level. As Hewett already mentioned, if she were to launch another venture, she would consider personal loans over venture capital.
If you or someone you know is struggling with your mental health, help is available. Call, text or chat the Suicide & Crisis Lifeline at 988 — it’s free, confidential, and available 24/7.
