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Access Health
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Year Funded: 1988
Talented entrepreneurs know how to steer companies into the right market for their products and services - even if it requires a dramatic change in focus. That's the story of Access Health, an El Dorado Ventures portfolio company that successfully switched markets and grew into a $100 million public company before being acquired for $1 billion by McKesson/HBOC.
Access Health was referred to EDV by a fellow venture capital investor, who knew of the firm's strong commitment to supporting and nurturing venture-backed start-ups. Under Access Health's original business plan, the company offered hospitals a novel marketing tool: nurses who provided medical advice by phone. The objective was to offer a value-add service to patients and fill hospital beds.
While this proved to be successful and profitable business, CEO Ken Plumlee spotted a more lucrative opportunity: providing phone advice to health insurance companies, who in turn made it available to their subscribers. The insurers had the opposite objective from the hospitals - they used the advice lines to solve patient problems quickly and cheaply, thus reducing unnecessary medical expenses.
It turned out that providing "care management" services to insurers was a far bigger market than Access Health's original hospital market. Once Plumlee and his team changed Access Health's strategy, the company took off, quickly reaching $100 million in revenues. McKesson/HBOC acquired the company in 1998.
"El Dorado Ventures is the most management-friendly venture capital firm I've worked with," says former Access Health SVP Jim Steeb, who is now CEO of EDV portfolio company Salu. "The most important thing to an entrepreneur isn't getting the money, it's getting a partner you can work with who will do the heavy lifting. EDV has been able to achieve fantastic results because they work as a team with management."
Ken Plumlee agrees. "El Dorado Ventures is really a business partner in every sense," he says. "They take a hands-on approach and are very involved in understanding the issues. At the same time, they know how to build a business from the startup phase into a successful enterprise." |
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