Some VCs Are Successful But Not Very Good At It

What we talked about.

Sunny Ray sits down with Shabaka Gibson, a healthcare and AI focused venture investor, to unpack why some VCs get good outcomes without actually being skilled investors. Shabaka explains how many funds simply copy larger firms like A16Z into oversubscribed rounds, ending up too diluted to generate real returns, and argues that great VCs act as an extension of the founding team rather than just writing checks. He traces his path from a four year stint working with food companies in Battle Creek, Michigan, through directing the Creative Destruction Lab's risk and health streams at the University of Wisconsin, to running Health(ex) and now his own fund, Common Thread Ventures. Drawing on his background as a former Army intelligence officer, he describes the founder patterns he watches for, why effectiveness always wins over affordability or accessibility in healthcare, and why empathy is a double edged trait in founders. The conversation closes with where AI is genuinely changing care delivery versus being sprinkled on for hype, and which parts of healthcare he expects to look unrecognizable in five years.

A healthcare VC explains why copying bigger funds, not lack of skill, is what actually separates good investors from lucky ones.

The questions, and the answers.

What are you building right now and what's your thesis?

I'm building a venture fund focused on healthcare and AI, and anything that makes healthcare better, faster, more efficient, more impactful and cheaper to provide. A lot of VCs have great tools but the wrong business model or go to market strategy, so they never realize their full potential. Your job isn't just to write a check, it's to become a member of the founder's team.

What did you see that led you to say some VCs are successful but not very good at it?

Early on I saw a lot of VCs doing the copycat thing, watching what A16Z and others put their dollars into and just tagging along without real insight. They end up as small additions to much bigger rounds and don't get meaningful ownership. You can invest in a great company and still make a bad investment if you don't own enough to survive dilution and still return your fund.

What were you doing before venture, and what did it teach you about healthcare?

I was director of the Creative Destruction Lab at the University of Wisconsin, running the risk and health streams. The idea was to recreate the concentration of talent you find in Boston or Silicon Valley virtually, bringing in the best mentors and companies from anywhere in the world instead of just local ones. That's where I built really deep knowledge in digital health and SaaS enabled devices.

Why healthcare specifically, when the easier money has been in software?

Madison, Wisconsin is where Epic Health Systems is based and it's a recognized biotech hub, so it's in our DNA here. Personally, healthcare touches everybody, it's twenty percent of our economy, a six trillion dollar industry, and extremely complex. That combination of a massive market and deep complexity means there's huge opportunity for transformation, and I think my skills work best there.

Who taught you how to evaluate a founder?

I'm a former intelligence officer in the Army, and pattern recognition is beaten into you there, it never goes away. I picked up the rest from four years working with food companies in Battle Creek, Michigan and three years at Creative Destruction Lab. I look for whether a founder can attract and motivate talent, whether they can give up control, and whether they understand P&L and burn rate.

Between effective, efficient, accessible and affordable, which one do you refuse to trade?

It has to be effective. You can work on accessibility and affordability, and you're always trying to get more efficient, but if it's not effective no one will use it and you'll never get traction. Healthcare is a very sticky market, customers stay with a solution even when better ones exist, so you need something ten times more effective to get them to switch.

What's a deal you passed on that you still think about?

There's a company in the data space I talked to again just two hours before this call. They were very early and not quite aligned with our thesis at the time, so we passed, but I saw something really good there. A VC saying no rarely means no forever, it usually means not right now, and I'd still consider investing in their next round.

What does AI genuinely change in healthcare delivery versus just being sprinkled on?

Honestly it's being sprinkled onto everything right now. Where it really helps is multi step tasks that reduce a practitioner's labor, like handling admin data entry so you approve instead of typing, or improving diagnostic accuracy on things like X-rays and slides. It saves time and improves accuracy, which matters a lot in insurance too, but just adding AI everywhere isn't automatically valuable.