Jennifer Steiner has spent her entire career in the healthcare services sector: at Fortune 100 companies, private equity backed companies, and now at her own private equity backed startup. Jennifer shares her experience navigating the private equity world while pursuing her mission to address the mental health crisis in our country.

Q: Your founder journey is different from the path taken by many founders. You began your career at established companies. How did your career path lead you to found Lightfully Behavioral Health?

Jennifer: My journey has taken me from big to small to even smaller companies, but all in the healthcare services business. I spent the first half of my career at Fortune 100 publicly traded healthcare services companies in various management roles. With the passage of the Affordable Care Act in 2010, which provided for government reimbursement for mental health care, a new market opened up and private equity started paying attention. Ten years ago, I moved to private equity when I was recruited for the CEO job at InnerChange, a behavioral health care company that served adolescents and young adults. That opportunity led to CEO roles at several other behavioral health companies.

And then came the pandemic and what many people call the second pandemic – the mental health crisis that is occurring in our country. I noticed that there was a void of really good quality providers specializing in more severe mental illnesses or, in other words, illnesses at higher levels of acuity. The need was urgent. We've all had experiences – in our own lives or with family and friends – where there has been a mental health struggle, but there has been so much stigma around openly discussing mental health issues. I think COVID has moved the needle in that regard with conversations around mental health coming out of the dark. That's why I founded my company – to address an overlooked segment of healthcare essential to what it takes to be a healthy human being. I wanted to bring the need for this care into the light. That's why I named my company Lightfully.

Q: You had an idea to solve the lack of quality mental health care, but your solution required a new take on an existing business model. How did you raise the capital needed to start a company based on a novel idea? 

Jennifer: My solution called for a substantial capital investment because of the nature of my business model (which included residential care) and the speed at which I wanted to grow. That is not a venture backable business model. I considered bootstrapping with some kind of creative debt structure but decided that was too far out of my comfort zone. So, I realized I had to find a Unicorn -- a private equity fund that was willing to capitalize a startup. While the amount of initial capital I needed -- $50 million – was not an unusual check size for a private equity fund, investing in a startup with no operating history and no revenue was.

I found my Unicorn in Regal Healthcare Capital which is backed by an individual who is a physician but who also had experience operating several healthcare services companies. He understood my business model which is generally proven in other segments of behavioral health (like substance abuse and eating disorder treatment). And he could appreciate how that business model could work in a segment – general mental health services -- that's exploding. We also had an executive team with a proven track record. All those factors mitigated the startup risk and likely convinced the fund to make a $50 million investment.

Q: Tell us about Lightfully Behavioral Health and the services the company provides.

Jennifer: We provide treatment of general mental health conditions. There are three aspects to our business model: what we treat, how we treat it, and how we get paid. We treat primary diagnoses of depression and related disorders like anxiety, trauma, and personality disorders. We do not treat substance abuse or eating disorders, which are conditions that are already covered by many companies in a fairly consolidated sector. We treat what I call middle- to high-acuity conditions – that spectrum of conditions between people trying to harm themselves, which typically requires inpatient psychiatric care in a hospital, and outpatient therapy, which involves seeing a therapist on a periodic basis. We cover everything in the middle. And there is a world of need between being in an inpatient psych unit and seeing a therapist once a week.

We deliver our services in different ways to address levels of acuity. For high-acuity conditions, we provide 24/7 residential care, where a patient lives with us for about a month in a safe, supportive home-like setting. This is a much more healing environment than being in a hospital unit. We also provide less intensive levels of care for mid-level acuity conditions. The first is day treatment in an outpatient setting that offers group and individual therapy and skills building and where patients will typically be treated for six hours a day seven days a week. The next step down is intensive outpatient care, which involves group and individual therapy three to five days a week. And the last step is our virtual intensive outpatient care, which is basically the same as intensive outpatient care but delivered virtually to patients in their home environment.

Our services are paid for through the commercial insurance market. We don't serve the government pay population (Medicare and Medicaid) or the private pay, high-end population. The Affordable Care Act opened up the commercial insurance market for mental health care by extending government reimbursement to those services, and Lightfully was among the first companies to take advantage of that development.

Q: Venture capital is largely dominated by men but private equity even more so. What needs to happen to open up the field to more women?

Jennifer: When I was fundraising to start my company, I was looking for a private equity fund that was managed, owned, and controlled by women. I couldn't find any. The reality is that there are far fewer women leaders in private equity than in venture capital. One reason might be that the nature of private equity does not align with what I believe is an inherently female type of leadership. Private equity is very much a command-and-control culture, which is incompatible with the way many women lead. My number one goal in building companies has been fostering a leadership style that is highly inclusive. We can promote women by being accepting and valuing different leadership styles, from a direct approach to a compassionate approach, and to everything in between. We know that female leadership at the helm creates financial investment value. So, we just need to create environments in which women-founded companies can grow and flourish. We'll see where my next chapter takes me. But it is a vision of mine to raise and manage a private equity fund that is run by women and that supports women-founded companies.

Q: As a woman in private equity building a business that serves people at high risk, do you feel under exceptional pressure to prove yourself? What advice do you have for other women entrepreneurs who feel that kind of pressure?

Jennifer: I'm guided by the "Woman in the Arena" poem, which is the female version of a famous speech by Theodore Roosevelt. This part especially resonates with me: "The credit belongs to the woman who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes up short again and again, because there is no effort without error and shortcoming…." In other words, don't point fingers at someone who isn't getting it perfect. Be the one in the arena, getting mud on your face, but trying to be part of the solution. I feel like that is us at Lightfully right now. Things are not perfect. It's hard. We serve a high-risk population. I am proud that we're taking risks as a business for the sake of helping people in crisis. My message to other women thinking about building businesses is to lean into the risks you face. Otherwise, you may not make a difference where it is needed the most.