By Nadine Kavanaugh, Associate Director, Wharton Entrepreneurship
Richard Perlman W’68 met the founders of RightCare Solutions, Eric Heil ENG’05/WG’12, Matt TanzerW’02/WG’05, and Mrinal Bhasker WG’12, at the 2012 Venture Finals of the Wharton Business Plan Competition. RightCare Solutions had just won the Grand Prize, and at the awards event, he introduced himself to the team. While giving Eric his business card, Richard told him, “The ball is in your court, please call me.”
Unsurprisingly, he heard from Eric within less than a day.
Richard is the founder and executive Chairman of ExamWorks, the global leader in the independent medical exam industry (the sale which he recently announced for $2.2 billion) as well as a member of the Wharton Undergraduate Executive Board and the Wharton Entrepreneurship Advisory Board. He’s founded and sold many companies in a long entrepreneurial career, and he knows what he’s looking for in a startup that he might want to invest in. His one big question: What’s the capital requirement relative to the potential return? In RightCare’s case, “I thought that ratio was very, very favorable,” Richard remembers.
But for RightCare and its CEO Eric Heil to get to that favorable point was a journey in itself—one that crisscrossed the Penn campus and took nearly a decade.
As an undergraduate in the Engineering School in the early 2000s, Eric worked with Dr. Kathy Bowles, a professor at the Penn School of Nursing, to develop an assessment tool that could help hospitals identify patients that needed post-acute care and reduce readmissions; it became his senior thesis project. He reconnected with Dr. Bowles in 2010 when he returned to Penn as a student in the Wharton MBA program for Executives. Joining the program also introduced Eric to classmates Matt and Mrinal, who became the founding management team for RightCare. They had a great product and a great team—now they needed funds to get the company off the ground. Oh, and some mentoring wouldn’t hurt.
Enter Richard Perlman: “I was the last piece of the puzzle, I guess… they received the BPC Grand Prize, and I was the initial lead investor in both rounds A and B.”
Even more than money, Richard brought an intangible asset, one that is nonetheless crucially important to the success of any startup: experience. “Having built many, many companies in my career, there’s no substitute for experience.” Richard says. “I’ve made every mistake in the book on my own, and being able to warn people about all those pitfalls is what I can bring to the party. Money, these days, is fungible. What startups need is not just someone who can write a check, but someone who has lived through the trials and tribulations of being an entrepreneur.”
Richard was there for Eric and his team to offer “emotional coaching,” as he puts it. To be “someone he could always call who would help him through the rough times and celebrate with after the good times.” Richard should know. This is what experience teaches: that no matter how successful a startup may be, there will always be those rough times. “Throughout the entire RightCare journey, Richard was a tremendous mentor, partner, and friend to me and team,” stated Eric. “A major part of RightCare’s success was his positive partnership and direct involvement with us to help navigate the multiple financings, board dynamics, and rapid growth.”
For RightCare success did come quickly. In just 38 months they raised $11 million in venture capital and another $3 million in grants and prizes, hired 25 people, and scaled the product to more than 30 hospitals nationwide. Penn Medicine was one of their first partners, and the site of their beta testing, as if this weren’t already enough of a Penn success story.
Finally, in December 2015 RightCare was bought by Cardinal Health subsidiary naviHealth, for an undisclosed (but generous) amount.
Richard couldn’t be more pleased—or proud: “To create a successful enterprise from a concept into a viable business is a monster accomplishment. This is what Wharton Entrepreneurship is about, that’s what we’re trying to seed and encourage. But having a subsidiary of Cardinal Health, which is a multi-billion dollar company, buy little old RightCare is, to me, huge validation of how successful this process is. In just over 3 years, to go from congratulating someone from winning the BPC prize to a closing party and congratulating them on the acquisition by Cardinal is amazing. It doesn’t get any better than that.”
Richard found one very tangible way to show how much he believes in the value of what Wharton Entrepreneurship, and the BPC, accomplish—he endowed the BPC grand prize, so that in 2013, the winning team took home the Perlman Grand Prize.