Rodney Altman MD is a Managing Director for Wells Fargo Strategic Capital and an emergency physician at Stanford Health Care. He has spent the better part of three decades delivering patient care and investing in transformational healthcare companies at various stages of their lifecycle. Dr. Altman received his Doctor of Medicine from McGill University and his Master of Business Administration from the University of Chicago Booth School of Business.

Interview conducted by Ikenna Nwafor, Big Red Ventures Fund Manager 2022-2023


Ikenna: Welcome everyone, I’m Ikenna Nwafor, one of the fund managers for Big Red Ventures, and this is our investor speaker series. I have the pleasure of introducing Dr. Rodney Altman, Managing Director at Wells Fargo Strategic Capital. Welcome! How are you?

Dr. Altman: I’m well, thank you for setting this up, it’s a pleasure to be here.


Ikenna: Before we jump into this and begin the conversation, I think it’d be great if you tell our audience a bit about your background.

Dr. Altman: Sure, I would be happy to. I started my career as an emergency physician and spent the first 10 years of it practicing full time. In 2000, I became a healthcare investor and have been with a variety of different firms since that time. I was very fortunate to join Wells Fargo Strategic Capital about 3 years ago. I’ve continued to moonlight as an emergency physician, spending about 2 to 4 days a month in the Stanford Emergency Department. In addition to all that, at one point I took a little break from investing and ran a P&L for TeamHealth, a physician practice management company. But, for most of the time since 2000 I have been investing in healthcare companies at various stages of their development.


Ikenna: That’s wonderful quite the career. What were those early years like transitioning from a practicing physician to this new domain of business and venture capital more specifically?

Dr. Altman: The transition was hard mostly because I didn’t really know what I was doing in those early days. I had practiced for 10 years and was sure that I wanted to do something different, but I wasn’t really sure what that was, so I went to business school to get a business vocabulary. About halfway through business school, I decided I wanted to be a venture capitalist and, with great difficulty, networked my way to a role with a firm, TVM, which was based in Munich, Germany.  Then I moved to Boston, Massachusetts, and eventually to San Francisco, California. While I was ultimately successful, it took a while to learn how to evaluate companies and make investments. I joined at a relatively senior level given my prior medical experience.  So, I had a lot of practical healthcare experience, and I understood what might get adopted, but conducting due diligence, analyzing financial metrics, and sitting on corporate boards were all new to me. I did not have the typical background of 5 to 7 years in investment banking or consulting, so I definitely had a lot to learn.


Ikenna: Wonderful! You touched on how at the same time you’re able to leverage that clinical expertise in this new domain. What was the thing about investing that really attracted you to the space?

Dr. Altman: That’s a great question. As a doctor, I was seeing 4,000 patients a year, and while I felt that I was having a meaningful impact. I thought that as an investor or entrepreneur, I had the potential to have an even greater impact on healthcare. I also felt that medicine evolves very slowly, so I wanted to have a larger role in what types of goods and services got into the hands of the doctors in the field. I wanted to not only deploy these goods and services, but also have a role in what was clinically available.  That meant I had to become either an entrepreneur or a resource allocator. I didn’t really feel like I had that gene required to create great ideas, so I wasn’t going to be a scientific founder. I decided to be more of a resource allocator and that’s how I chose Venture Capital. If one believes in the capitalist model, as a venture capital investor we have the privilege of “voting” for promising companies by allocating capital to them. I tell our team this all the time: I wake up in the morning excited to get to work! It’s an incredible privilege to do my job. I absolutely love it and I am fortunate I also like the people on our team.

Now, I still haven’t abandoned practicing completely. I do practice a few days a month in the emergency department, which I find very useful as an investor. It allows me to keep my finger on the pulse of workflows, enhances my ability to have conversations with other physicians and permits me to have a good understanding of the problems the industry is trying to solve.


Ikenna: Transitioning a bit towards your investment thesis, I’m sure you’re evaluating dozens if not hundreds of investments at any given time. What are some of those key considerations when evaluating an investment opportunity? What are you looking for in the product, the entrepreneur, or the management team?

Dr. Altman: I think everybody’s a little bit different in how they evaluate an opportunity. For me it always starts with the value proposition. What’s the problem and how are you solving it? To which stakeholders are you delivering value and how much value? And then, who are those that will resist progress? The ideal investment opportunity helps patients, doctors want it, it benefits the hospital in some way, and payors will pay for it. The leadership team is very important as well. You can have the best idea, but if you don’t have the right people to execute on it, the likelihood of failure is high. It’s also important to not overlook the regulatory and reimbursement landscapes.


Ikenna: What is some advice you may have for entrepreneurs who are currently raising money and seeking venture capital funding?

Dr. Altman: The first thing would be to be a very good listener. Someone gave me that advice early in my career and I certainly don’t know if I lived up to that ideal, but I try. Along those lines, be a great networker and get the right people around you as advisors and mentors. Absorb as much information as you can and be open to candid feedback. You may be a founder with a great company but may need to bring in a seasoned CEO who will take it to the next stage. That may be tough to hear but that could serve you well in the long run. These will also be the same people who will advocate for you down the line and put you in front of future opportunities.


Ikenna: What are some of the exciting trends or verticals within the industry that really get you excited at the moment?

Dr. Altman: There are a few that come to mind. The fact that care is moving from the hospital closer to the patient is exciting. Examples are telemedicine and the emergence of ambulatory surgical centers and office-based laboratories for doing procedures that would have otherwise been done in a higher cost facility. Another trend or aftershock of a trend, depending on one’s point of view, is the emergence of healthcare IT solutions that take advantage of the digitization of medical records to provide new solutions and improve efficiencies. In the early days, we put in place infrastructure, the electronic medical record and accompanying hardware.  We were kids learning to walk. Now, we’re starting to jog. We still have a long way to go but this presents opportunities for investors and entrepreneurs alike. We’ll likely see some consolidation in the space as well. Several companies were funded in the last couple of years in similar sectors, and with wage inflation and staff shortages, we’ll see some mergers to minimize costs, realize synergies, and achieve scale.


Ikenna: At this moment are there any recent additions to the portfolio that you’re excited about?

Dr. Altman: Absolutely! We did a credit deal not long ago for a company in the nurse staffing space, which is in high demand right now. We have a company which is in the artificial intelligence space providing services to the VA and other government organizations. We have a physician practice management company for vascular surgery, which sets up office-based laboratories so patients can have their procedures done in the office rather than the hospital. We also have a psychiatry telemedicine company that allows clinicians to treat not only lower acuity cases, but also treat high acuity, very sick psychiatric patients. These are all great companies directly addressing needs in the healthcare space.


Ikenna: What are some tips and advice you might have for students very much interested in pursuing a career in Venture Capital?

Dr. Altman: It’s hard to get into venture capital. So, the first thing I’d say is one shouldn’t limit oneself to only those opportunities. It’s not only possible but very common to go into a business development role in a company or another financial role, learn what it takes to create and run a business, then eventually work your way into venture capital. I think another good path is to go into investment banking or management consulting for a couple of years to learn business fundamentals and gain technical skills. A lot of people want to go directly into investing right out of school, and people definitely can, but it’s good to get some practical training.


Ikenna: Lastly, what’s your advice to people who experience setbacks early in their career, and how to kind of pick themselves up from that?

Dr. Altman: I’ve certainly experienced plenty in my career and they are very humbling. In those times, I like to think of my future self a few years down the line. Most of these setbacks will be distant memories and you will recover. Successful people are resilient. Fall down 7 times, stand up 8. That doesn’t mean that a person doesn’t experience serious disappointment when these happen, but one has to find a way to move forward. When you are able to move forward and just focus on the immediate next steps, setbacks tend to resolve themselves. This also underscores the need for good mentorship. Mentors will pull you up and help you learn from the experience.


Ikenna: Well, Dr. Altman, we really appreciate you joining us in conversation today. Are there any parting words for the audience that you wanted to mention?

Dr. Altman: It’s my honor to be asked to be here; thanks for having me.