One Medical’s former CEO is making his first VC investments. Here are the 5 things a startup needs to get his backing.

It’s Rubin’s first foray into healthcare investing after years of serving in executive roles at powerhouses like UnitedHealth Group and Stanford Health Care. Rubin declined to share how much capital his venture fund has raised so far or where that money is coming from.

He told Business Insider his goal is to power startups that improve patient outcomes, ideally while cutting costs for other healthcare players.

“The common thread here is partnering with technology-powered healthcare innovators to advance healthier outcomes for all,” he said. “And we need to think about not only how we delight the consumer, but also think about the payment side, the clinician side, and the coordination of care side. I’m excited about these solutions that can address multiple needs.”

Rubin left One Medical less than a year after the company’s $3.9 billion acquisition by Amazon closed. It’s been a tumultuous year for One Medical — the company has continued to report hundreds of millions of dollars in operating losses, and Amazon is setting several cost-cutting measures in motion, including layoffs and planned office closures, Business Insider reported earlier this month.

With Rubin searching for more startups to back, the Healthier Capital CEO named five things he’s looking for in new investments.

1. Product-market fit

   First and foremost, Rubin said, he looks for startups with market traction selling their product or service.

   Those startups have often been up and running for a few years and have demonstrated demand for what they’re selling.

   Rubin said he wants to back startups that are good for multiple stakeholders in the healthcare market. He said that’s part of what drew him to invest in Ezra, which helps patients screen for cancer earlier with AI-powered medical imaging, lowers costs for imaging centers, and aims to eventually cut costs for payers by catching problem conditions faster.

   “I don’t like zero-sum games — for example, the consumer likes it, but the employers and payers hate it,” he said.

2. Realistic financial models

   Rubin said he sees plenty of companies built according to idealistic financial models and wants to work with founders with proven revenue strategies.

   “There are a lot of companies that are like, if only the world behaved this way, we would have a successful economic model,” Rubin said.

   Startups without stable revenue sources, such as employer contracts or insurance reimbursement, could have trouble getting Rubin’s backing.

3. Execution matters

   A good idea can only propel a startup so far, Rubin said.

   “There are lots of interesting ideas — the question is, can you execute at scale and perform consistently,” he said.

   How effectively a startup makes those ideas a reality depends on solid leadership, Rubin said. He added that startups should also have established distribution channels for selling their products or services to get his attention.

4. Cash needs

   As the healthcare funding market begins to recover from a nearly two-year slowdown, Rubin said he’s being thoughtful about how much cash startups are asking for in that environment — and how much capital the startup anticipates it’ll ultimately need to perform at scale.

   Getting to profitability as a healthcare startup can take years. Some healthcare startups never reach profitability. Rubin says he’s carefully considering those risks and how startups plan to make efficient use of the venture capital they’re given, whether relying on physical clinics or providing a service online.

5. Great patient outcomes and returns

   The startups in Healthier Capital’s portfolio should aim to improve patient outcomes significantly, Rubin said, while boasting great potential for investment returns.

   He’s seeing that potential in a variety of areas of healthcare, he said, including specialty care, value-based care, and clinical workflow automation software.