Legal Foundations for Startup Success: Supporting Koda Health

Dr. Tatiana Fofanova didn’t begin her career thinking she would one day start her own company. What started as a career in research eventually led her to pursue other career options, “I kind of got frustrated with the speed at which things moved. And the speed at which you could make an impact in the patient populations you were working with.”

That frustration eventually led Dr. Fofanova to moonlight for some venture capital funds and angel groups in the Houston, Texas area. In her own words, “What started out as just a little bit of exploration into ‘what else is out there’ was my first introduction to entrepreneurship.” In this field, Dr. Fofanova saw people with the same passion for making a positive change in the lives of others around them.

Eventually, Dr. Fofanova was recruited into the Texas Medical Center (TMC) Founder-in-Residence Program in Houston. While there, she was matched with two other like-minded co-founders. Together, this trio came up with and eventually created what is today known as Koda Health, a patient-decision support platform that scales goals of care conversations for health systems, payers, and health care organizations.

With a solid idea now figured out, Dr. Fofanova and her co-founders needed legal support to get their company up and running. They turned to Aaron Barker for help.

“As a first-time entrepreneur planning to raise venture capital, Dr. Fofanova needed help forming and organizing an entity that would be ready for venture investment while also protecting the founders,” Aaron explained.

“Companies that will seek venture capital investment must be formed and organized in a specific way that (i) will meet the requirements of a venture capital diligence process, (ii) have protections in place for the founders, and (iii) preserve operational flexibility. This is why it is crucial to work with counsel that is experienced in the unique requirements of venture law, not just a business law generalist. The Venture Best practice group at Michael Best consists of attorneys with deep venture law experience.”

This guidance was invaluable to Dr. Fofanova and her team. She expressed how, “When Koda started, [Aaron] was teaching me what a SAFE was, and other really basic stuff. There was not a hint of judgment and a lot of investment into the relationship, the vision, and the potential.”

That investment included more than just entrepreneurial support. Thanks to Michael Best’s full-service capabilities, Aaron and the team also provided Koda Health with legal guidance in IP, employment law, tax law, and more to ensure key protections were in place. Aaron shared,

The Michael Best Venture Best team worked with the founder team at Koda Health to understand the IP strategy and desired equity structure. This allowed for a smoother transition when one founder needed to reduce their time commitment. Ultimately, the biggest benefit we provided to Koda was enabling the venture financing to continue without any issues around IP ownership or equity rebalancing.

Today, Koda Health is a rapidly growing company, providing real benefits to patients and health care organizations. They consistently see a 42% reduction in the total cost of care for health care organizations and patients on average rate their net promoter score as 87.

“I really value my clients; we develop a great working relationship,” said Aaron. “Watching Dr. Fofanova and her team's success is thrilling. I know the best is yet to come.” 

We are grateful to continue being part of the incredible work happening at Koda Health. If your startup, business, or organization is looking for customizable, full-service legal support, please reach out to our team to learn how we can help you achieve your business goals.

Go deeper into the moments that shaped the relationships with our Venture Best Team.