Mar 4, 2025

Cerebral This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now.Have an account? Log in Mou's AdvocateMH has raised seed funding from Morningside for behavioral healthcare triage. Mou stepped down as CEO of the troubled mental health startup Cerebral in December. The former CEO of troubled mental health startup Cerebral has raised fresh funding for a new venture, Business Insider has learned. Dr. David Mou's latest mental health company grabbed a seed round led by private equity and venture firm Morningside, the former Cerebral CEO told BI. The new startup, called AdvocateMH, aims to connect patients in need of mental healthcare with the right resources for them, Mou said. He declined to share the size of the seed fundraise. AdvocateMH is Mou's fourth venture-backed startup. He stepped down as CEO of Cerebral, the SoftBank-backed mental health company once valued at $4.8 billion, in December. Mou's departure follows a tumultuous year for Cerebral, which saw the once-high-flying startup pay millions of dollars in multiple settlements with state and federal regulators over its prescribing practices. At the same time, its investors slung lawsuits back and forth. Cerebral came under fire in 2022 over how it prescribed controlled medications like Adderall . After an investigation by the US Department of Justice , "Cerebral's financial position has become dire," according to an April 2024 lawsuit filed by one of Cerebral's investors against another investor. Mou's newest venture aims to take a different approach to behavioral healthcare — and to the venture capital game itself. "We've been in many other companies, and some of those companies raised way too much money," said Dr. Thomas Insel, AdvocateMH's cofounder and president and a former advisor to Cerebral. "Companies more often die of indigestion than malnutrition. It's really important, 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." Mou's latest swing in mental health AdvocateMH's goal, as Insel and Mou explain it, is to introduce a new person into the ecosystem who can advocate for patients in need of mental healthcare wherever they're seeking it, whether they're being referred by their primary care physician or looking for resources after calling into a suicide hotline. Related stories Insel and Mou, who are both psychiatrists, said AdvocateMH is conceptually in its early days. The company, which they established as a public benefit corporation, was just incorporated in January. AdvocateMH does not plan on generating revenue by doing what "most companies do right now," Mou said, which is taking a cut of the volume of referrals. Mou said that strategy creates "perverse incentives." "We want to create a system where the clinics performing at the highest quality get more referrals," Mou said. "We're just talking to the payers and health systems and PCP clinics and the high-quality clinics." AdvocateMH plans to use licensed clinical social workers to assess patients and determine the next steps for their care. Mou and Insel also hope to integrate AI tools to enhance their clinicians' decision-making. "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." Cerebral's rocky foundations Mou joined Cerebral as its chief medical officer in 2021, a year after the mental health startup launched to provide care online for conditions like anxiety, depression, and ADHD. As Cerebral grew — and raised hundreds of millions of dollars from top venture firms — the startup ran up against media criticism and federal probes into its prescribing practices. A BI investigation published in June 2022 found that Cerebral flouted clinical guidelines in prescribing serious medications , sometimes putting patients' health at risk. The Drug Enforcement Administration and the Department of Justice launched probes into those prescribing practices the same year. Cerebral has since been forced to pay millions of dollars to state and federal regulators, including a $7 million penalty to the Federal Trade Commission in April 2024. This penalty was reduced from the original $15 million proposed, as the agency said Cerebral couldn't pay the full amount. Those financial woes appear to have contributed to infighting on Cerebral's board of directors, too. Cerebral investor Access Industries first sued both Cerebral and WestCap , another investor, in April, alleging an undercover power grab by WestCap to secure more board seats. WestCap filed a countersuit in June, claiming that Access Industries cost Cerebral hundreds of millions of dollars in value by obstructing a proposed stock buyback with its lawsuit. Endpoints reported Monday that Mou has returned to his previous role as Cerebral's chief medical officer. Mou told BI he's still helping Cerebral with its clinical projects. Brian Reinken, a senior advisor to WestCap, has stepped in as Cerebral's interim CEO. When asked about how Mou's learnings from his time at Cerebral have affected his approach to AdvocateMH, Mou pointed to AdvocateMH's focus on centering clinicians in 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." Mou said AdvocateMH plans to share more about its seed round and advisors in the coming months. Read next