Mar 13 Fellows Spotlight: Dave Vreeland – Fellows Class of 2014, Senior Managing Partner, Caduceus Capital Partners, LLC
Dave Vreeland is a well-known authority on healthcare IT and issues shaping the future of the healthcare industry. Currently, he is co-founder and senior managing partner at Caduceus Capital Partners, a venture capital firm focused on digital health investments.
Tell us about your early career and how that led you to become an entrepreneur and then an investor.
What’s driven my career has always been curiosity, creativity and a focus on the future. After grad school, I served in various administrative roles at Barnes Hospital in St. Louis and Northwestern Memorial Hospital in Chicago, learning the many aspects of hospital operations. From there, I went to work with EY, where I fell in love with the craft of consulting and built business relationships that I still maintain and value to this day.
In 2004, I founded my own company here in Nashville, Cumberland Consulting Group, which we grew to 500 employees and annual revenues of more than $100MM. The timing for founding the business was fortunate, as there was so much momentum in the move to adopt EHRs and other healthcare tech. We guided our clients through that period of intense technological advancement, which continues to this day.
About eight years ago, I became interested in taking what I know about the healthcare industry and applying it to the investing world. I ended up leaving Cumberland and launched my first venture capital fund, Jumpstart Capital Growth Fund I. Our debut fund raised $21MM and invested in 11 portfolio companies. Then in 2020, I started my second fund under a new brand, Caduceus Capital Partners, with my partner and former EY colleague, Scott Kolesar.
What’s your approach to investing at the venture level?
I think my partner, Scott, and I bring a fresh view to venture investing. In many ways our “good fortune” components, like plenty of deal flow and strong entrepreneurs who want us to fund them, come from a long career of working hard and building relationships.
We support each portfolio company like true partners – we’re available 24/7 to advise, create strategic connections and provide hands-on support throughout all phases of company growth, from the first check to exit. All of our portfolio companies receive operational expertise, healthcare sales cycle guidance and insight on product/market fit, as well as vast network access to potential customers and partners. Moreover, we reserve up to 50% of our committed capital to provide additional funding for the best performing companies.
What problem do you most want to solve in healthcare?
Healthcare is crowded, complex, and doesn’t follow the typical rules of business. And it’s on an unsustainable path. We all want to swoop in and save the day with a golden ticket that’s going to fix everything. But the truth is, it’s about making a difference in a bunch of small ways. It’s about reducing friction in the market, cutting out the waste where we can, making resources go further and taking burden away from clinicians. This is what will reduce costs and create better patient outcomes over time. Lots of investors are putting all their chips on big platform plays; we choose to bet on innovative point solutions with measurable value propositions that can make an immediate and lasting impact in a provider/payer’s enterprise.
How did the Fellows program influence your career?
The Fellows program absolutely influenced my career and helped me to meet like-minded leaders who are passionate about working hard to solve problems in healthcare. Both the networking aspect and the educational aspect were powerful influences; and it was a blast to get to know Senator Frist and Larry VanHorn. I’m fortunate to call many Fellows alumni both friends and partners – I met several of our Caduceus Capital Partners venture partners in the program.
What’s the best piece of advice you’ve ever received?
Don’t have big, lofty, lifetime goals. Be micro-ambitious. As you change, your interests will evolve, and you’ll learn what you’re especially good at doing. That’s how you get to that sweet spot where what you do for a living is a perfect match for your skills, and the success will follow.
What do you look for when you’re evaluating a startup for potential investment?
There are several things that we keep in mind when investing. Scott and I are sales guys at heart, and before we buy something, we want to make sure that we will be able to sell it. Product-market fit must be addressed from the beginning. With our Health System Innovation Council, we’re able to directly solicit our hospital partners’ input and strategically align new companies with those health system investors interested in operationalizing innovations with strong value propositions.
And, having a solid team of good people is a must. We choose portfolio partners that we already know to be smart and hardworking. Passion and a good idea will only get you so far – you need to have experience and talent to make any company a success.
What books would you recommend that have shaped your business thinking?
Am I Being Too Subtle?: The Adventures of a Business Maverick by Sam Zell