Mike McKinnon has been named CEO and president of La Palma-based for-profit healthcare startup incubator Innovation Institute, effective May 1.
McKinnon is currently partner at the Costa Mesa office of law firm Sheppard, Mullin, Richter & Hampton LLP, and has served as the general counsel for the institute since its founding 10 years ago. His 28 years of healthcare-focused legal experience make him “the right person to lead the company going forward,” company officials said.
“This would be my first foray into management, but I’ve been very involved in advising companies and advising boards for many years,” McKinnon told the Business Journal. “It seemed like the natural progression for me to go into this role because I’ve done a lot of work in structuring and advising businesses on M&A transactions, joint ventures and healthcare.”
In May, McKinnon will leave his post as partner of Sheppard, Mullin’s OC office to work full time at the Innovation Institute.
Although McKinnon admitted to being nervous about his new role, his predecessor “has been very complimentary of me—he’s definitely a key reason why I feel like I can do it,” he added.
McKinnon will replace Innovation Institute’s current CEO and president, Joe Randolph, who was honored as the Business Journal’s Businessperson of the Year for the healthcare sector in 2016, for leading the newly founded institute through several milestones.
Under Randolph’s direction, Innovation Institute in 2015 secured $20 million in investments, inked deals with three industry partners and signed the first license agreement for a product from the institute’s portfolio. The company generated roughly $150 million in revenue that year.
Today, Innovation Institute reports annual revenue of over $220 million, McKinnon said. The incubator counts over 700 employees in 21 states, including in Louisiana, South Dakota and Ohio.
Innovation Institute offers multiple resources for healthcare startups: the Innovation Lab, which incubates and commercializes new medical devices and other products; the $100 million healthcare fund by VC firm LRVHealth and the firm’s Enterprise Development Group (EDG), which comprises of over a dozen acquired companies whose cash flow “helps underwrite the Innovation Lab and provides [return on investment]” for the institute’s investors.
Innovation Institute currently counts six investors, who are each nonprofit health systems that are required to put down a minimum of $10 million into the company. Local backers include Children’s Hospital of Orange County.
Along with Randolph, the rest of Innovation Institute’s current leadership team will retire in May after growing the incubator from the ground up over the last 10 years.
“We have enjoyed every minute of every day since we first conceived the concept of the Institute,” Randolph said in a statement. “We truly believe that the Innovation Institute will be around for many years and will touch many lives with the ideas that come from the wonderful physicians, nurses and employees from across the country.”
McKinnon said he hopes to build on the current leadership team’s progress and double the size of the institute in the next five to 10 years.
He plans to launch a hiring spree for the institute’s internal team and EDG portfolio companies to “ramp them up,” he said. The sales departments for the institute’s portfolio companies have already undergone restructuring in preparation for further scaling.
“Right now, in our time of economic uncertainty, it is the perfect time to invest in ourselves,” McKinnon said. “We have minimal debt. From a cash perspective, we’re in a good position for the future.”