Health Tech Founder Playbook: How Physicians Build Venture-Backed Companies
The playbook behind physician-founders who trade white coats for cap tables.
The Physician-to-Founder Pipeline
A new archetype has emerged in health entrepreneurship: the health tech founder with medical credentials. These physician-entrepreneurs leverage clinical expertise to build venture-backed companies, trading predictable medical salaries for equity stakes that can be worth tens or hundreds of millions at exit.
Casey Means co-founded Levels Health, now valued at $300 million. Mark Hyman invested early in Function Health and Truemed. Peter Attia built Early Warning Labs into a premium longevity practice. Each followed variations of the same playbook—using medical credibility to unlock opportunities unavailable to non-physician entrepreneurs.
This guide explains how the model works, from initial positioning through funding rounds to potential exits.
Step 1: Credibility as Capital
Medical credentials function as startup capital. An MD or DO after your name provides instant authority that non-physicians must earn through other means. This credibility opens doors:
Investor Meetings
VCs funding health companies prefer physician co-founders. Medical training signals domain expertise, regulatory awareness, and clinical network access. Casey Means’ Stanford training helped Levels Health attract funding from Andreessen Horowitz.
Media Access
Journalists quote doctors. A physician-founder gets press coverage that pure tech founders struggle to secure. This earned media reduces customer acquisition costs.
Clinical Partnerships
Health systems, research institutions, and medical groups partner more readily with physician-led companies. These partnerships provide distribution, data, and validation.
Regulatory Navigation
Understanding FDA pathways, HIPAA requirements, and medical device regulations gives physician-founders advantages in compliance-heavy markets.
Step 2: Company Building Pathways
Physician-founders typically follow one of several paths:
The Co-Founder Model
Partner with technical co-founders who build the product while the physician provides clinical direction and credibility. Casey Means co-founded Levels with Josh Clemente (SpaceX engineer) and Sam Corcos (software entrepreneur). The physician provides domain expertise; technical co-founders build the technology.
The Clinical Practice Scale-Up
Start with a clinical practice, then productize insights into technology. Peter Attia built Early Warning Labs as a practice, generating data and protocols that could eventually become products or licensing opportunities.
The Advisory-to-Equity Pipeline
Advise health startups in exchange for equity. Mark Hyman’s investments in Truemed and Function Health followed this model—trading expertise and endorsement for ownership stakes without operational involvement.
The Content-to-Company Funnel
Build audience through content (books, podcasts, social media), then launch products to that audience. This de-risks company building by proving demand before committing capital.
Step 3: Funding and Dilution
Understanding venture funding is essential for physician-founders:
Pre-Seed / Seed ($500K – $3M)
Early funding to build initial product and prove concept. Founders typically retain 70-85% ownership at this stage. Physician credibility can command better terms than pure tech founders.
Series A ($5M – $20M)
Scale the product with proven traction. Founders may own 40-60% post-Series A. Levels Health raised $12 million at this stage.
Series B and Beyond ($20M+)
Aggressive growth funding. Founder ownership continues diluting but share value increases if company performs. Truemed raised $34 million from a16z, reportedly tripling valuation.
The Dilution Trade-off
Each funding round dilutes founder ownership but (ideally) increases company value. Owning 20% of a $300M company ($60M) beats owning 80% of a $10M company ($8M). Physician-founders must understand this math.
Step 4: Exit Pathways
Founder wealth typically crystallizes at exit:
Acquisition
Larger companies (health systems, pharma, tech giants) acquire startups. This provides liquidity for founders and investors. Health tech acquisitions range from $50M for small deals to billions for market leaders.
IPO
Public offering allows founders to sell shares on public markets. Rare for health startups but possible for those achieving scale (Livongo, Teladoc, etc.).
Secondary Sales
Founders sell portions of their stake to later-stage investors before formal exit. This provides partial liquidity while maintaining upside exposure.
The Long Hold
Some companies remain private indefinitely, paying founders through salaries and dividends rather than exits. Less common in VC-backed companies due to investor return requirements.
Risk Factors and Trade-offs
The physician-founder path involves significant risks:
Opportunity Cost
Time spent building companies is time not spent practicing medicine. Casey Means let her medical license go inactive. This trade-off is permanent—clinical skills atrophy without practice.
Startup Failure Rates
Most startups fail. Even well-funded health tech companies frequently return zero to founders. The expected value calculation must account for high failure probability.
Reputation Risk
Failed or controversial companies can damage physician credibility. Medical boards may scrutinize physicians who prioritize commercial interests over patient care.
Regulatory Exposure
Health companies face FDA, FTC, and state medical board scrutiny. Physician-founders bear personal risk for company compliance failures.
Case Studies
Casey Means – Levels Health
Stanford-trained surgeon who co-founded Levels, a continuous glucose monitoring company. The company reached $300M valuation. Means traded active medical practice for startup equity, eventually letting her license go inactive. Her Good Energy book and policy advocacy (potential Surgeon General nomination) extended her influence beyond the company. Full profile →
Mark Hyman – Advisory Model
Rather than founding companies, Hyman invested in and advised health startups including Truemed and Function Health. This approach preserves clinical practice while capturing equity upside. His endorsements carry significant weight given his bestselling author status and Cleveland Clinic affiliation. Full profile →
Peter Attia – Practice as Platform
Attia built Early Warning Labs as a premium clinical practice rather than a scalable tech company. The practice generates revenue while creating intellectual property (protocols, frameworks) that could be licensed or productized. His “Outlive” book monetizes insights developed through clinical work. Full profile →
Getting Started as a Physician-Founder
For physicians considering this path:
- Build Platform First: Content, speaking, or clinical reputation provides foundation for company building
- Find Technical Partners: Unless you code, you need technical co-founders
- Understand Venture Math: Learn how funding, dilution, and exits work before negotiating
- Assess Risk Tolerance: Startup outcomes are bimodal—be prepared for zero
- Consider Hybrid Models: Advisory roles and investments offer upside with less operational commitment