david Mou, Former Cerebral CEO, Launches AdvocateMH to Revolutionize Mental Healthcare Triage

David Mou, the former CEO of Cerebral, a mental health startup that faced notable regulatory and financial challenges, is launching a new venture called AdvocateMH. The company aims to revolutionize behavioral healthcare triage, connecting individuals with the most appropriate mental healthcare resources available. AdvocateMH has secured seed funding led by Morningside, a private equity and venture firm. Mou stepped down as CEO of Cerebral in December after a period of intense scrutiny and multi-million dollar settlements with state and federal regulatory bodies.

Dr. David Mou, a psychiatrist, confirmed that the seed round was led by Morningside but declined to disclose the specific amount raised. AdvocateMH represents Mou’s fourth venture-backed startup, marking a new chapter after his departure from Cerebral, a company once valued at $4.8 billion.

AdvocateMH: A Fresh Approach to Mental Healthcare

AdvocateMH seeks to adopt a different strategy in behavioral healthcare and venture capital, learning from Cerebral’s past struggles. Cerebral faced scrutiny regarding its prescribing practices, particularly concerning controlled substances like Adderall. In 2022, an inquiry by the U.S. Department of Justice called Cerebral’s financial stability into question. According to an April lawsuit filed by one of Cerebral’s investors against another, “Cerebral’s financial position has become dire.”

Dr. Thomas Insel, cofounder and president of advocatemh and a former advisor to Cerebral, emphasized the importance of measured growth. He brings extensive experience and insights to the new venture, aiming to avoid the pitfalls of rapid expansion that plagued Cerebral.

“we’ve been in many other companies,and some of those companies raised way too much money,”
Dr. Thomas Insel, AdvocateMH cofounder and president

Insel further elaborated on this belief, highlighting the dangers of overcapitalization in the early stages of a company’s advancement.

“Companies more frequently enough die of indigestion than malnutrition,” he said. “It’s really crucial, especially at this stage, to take the kind of funding that allows you to build something and learn enough to get you to your Series A.”
Dr. Thomas Insel, AdvocateMH cofounder and president

AdvocateMH’s Mission: Streamlining Mental Healthcare access

The primary objective of AdvocateMH, according to Insel and Mou, is to provide patients with an advocate who can guide them through the complexities of the mental healthcare system. this support will be available regardless of where individuals are seeking assistance,whether through referrals from primary care physicians or after contacting suicide hotlines. Both Insel and Mou,who are both psychiatrists,acknowledge that AdvocateMH is still in its initial stages of advancement. The company was officially incorporated as a public benefit corporation in January.

AdvocateMH intends to avoid the common revenue model of taking a percentage of referral volume,a practice Mou believes creates perverse incentives. Rather, the company aims to incentivize high-quality care.

“We want to create a system where the clinics performing at the highest quality get more referrals,”
Dr. David Mou, AdvocateMH CEO

Mou added that advocatemh is actively engaging with payers, health systems, primary care physician clinics, and high-quality clinics to establish these referral pathways. The company plans to employ licensed clinical social workers to assess patients and determine the most appropriate course of action for their care. Furthermore, Mou and Insel aim to integrate artificial intelligence tools to enhance the decision-making capabilities of their clinicians.

“I’m sometimes asked whether AI will replace clinicians,” Insel said. “My answer to that is that AI is not going to replace clinicians, but clinicians who use AI will replace those who don’t.”
Dr. Thomas Insel, AdvocateMH cofounder and president

Cerebral’s Troubled Past

Mou joined Cerebral as its chief medical officer in 2021, a year after the company’s launch. Cerebral aimed to provide online care for conditions such as anxiety,depression,and ADHD. As Cerebral experienced rapid growth and secured considerable funding from prominent venture capital firms, it faced increasing media scrutiny and federal investigations concerning its prescribing practices. Investigations revealed that Cerebral had allegedly disregarded clinical guidelines when prescribing medications, perhaps endangering patients’ health. The Drug Enforcement Management and the Department of justice initiated inquiries into these practices in the same year.

Cerebral has since been compelled to pay millions of dollars in settlements to state and federal regulators, including a $7 million penalty to the federal Trade Commission in April. The FTC initially proposed a $15 million penalty, but it was reduced due to Cerebral’s limited financial capacity. These financial difficulties appear to have fueled internal conflicts among Cerebral’s board members. Access Industries, a Cerebral investor, initiated legal action against both Cerebral and WestCap, another investor, alleging an attempt by WestCap to gain greater control over the board. WestCap afterward filed a countersuit,asserting that Access Industries’ actions had cost Cerebral hundreds of millions of dollars by obstructing a proposed stock buyback.

Mou assumed the role of Cerebral’s CEO in May 2022, succeeding Kyle Robertson, the company’s cofounder, who was ousted from the position.It has been reported that Mou has returned to his previous position as Cerebral’s chief medical officer. Mou confirmed that he is still assisting Cerebral with its clinical projects. Brian Reinken, a senior advisor to WestCap, has been appointed as Cerebral’s interim CEO.

When questioned about the lessons learned from his tenure at cerebral and how they influenced his approach to AdvocateMH, Mou emphasized AdvocateMH’s commitment to placing clinicians at the forefront of its executive team and board of directors.

“The big thing is to get clinician leadership in early on,” he said. “Bringing in the right leadership with the right alignment up front is most critical.”
Dr. David Mou, AdvocateMH CEO

Mou indicated that AdvocateMH plans to release further details regarding its seed round and advisors in the coming months.

Conclusion

The launch of AdvocateMH by former Cerebral CEO David Mou marks a significant development in the mental healthcare landscape. With a focus on efficient triage and clinician-led decision-making, AdvocateMH aims to address critical gaps in access to quality mental health services. The backing of Morningside provides a solid foundation for this new venture as it seeks to improve patient outcomes and reshape the future of behavioral healthcare.