The Nurse Is Health Care’s Most Underpriced Founder

The crash cart, the wheeled cabinet of emergency equipment in every emergency department and on every hospital floor, was built in 1967 by a nurse named Anita Dorr, who assembled the first one at home and never patented it. Bar-code medication scanning began when a nurse named Sue Kinnick, returning a rental car, realized the agent’s scanner could cut deadly medication errors. They did it with none of what a founder has today: no accelerators, no seed funds, no Shark Tank, often no patent. A nurse saw a problem, solved it, and went largely unrecognized.

Sixty years later the start-up machinery and capital have arrived, and they point almost everywhere except the people who have been quietly fixing health care all along. In American health care the MD carries more weight than the RN. Everyone knows it, and that is why nurses leave the credential off, stripping it from pitch decks, filings, even patent applications.

We meet founders who have it all. One is a nurse as strong on the business as the clinical side, with a patent on a product aimed at a problem she had experienced firsthand. Her pitch deck listed her physician colleague’s MD and dropped her own RN. Asked, she said it was deliberate: the credential had been a barrier with investors and the FDA. An advanced practice registered nurse called herself “chief medical officer” on her website, trading the credential she holds for a title that reads as more credible. No one tells nurses to do this. They learn it meeting after meeting, because hiding the RN makes the raise easier. When a founder must hide the expertise that makes the company a good bet, the signal is not broken. It is mispriced.

Economists have names for this. Information asymmetry: an investor cannot observe which founder understands the problem, so the market reads signals instead. Signaling: a credential is one of those signals, an observable stand-in for a quality it cannot see directly. When the RN does show, it reads as bedside care, not someone who invents the product, builds the company, takes it to an exit, or decides where capital goes. And the moment she leaves the bedside, the market calls her a “former nurse,” as if the expertise expires when the role changes. Underwriting on a misread signal is how money walks out the door.

That misread is expensive, because the nurse’s vantage point is exactly what de-risks the deal. Venture lives by one rule, build for your user, and the nurse founder is the rare case who is the inventor, user, and buyer all at once. Every workaround is an unbuilt product, a fix prototyped daily by the person closest to the problem, the kind of market signal no focus group can buy.

Utilization flatlines. Nurses work around whatever fights the workflow, and when a tool proves useless they do the ultimate workaround and shut it off, technically deployed but functionally ignored. One operations study found nurses already spend about 42 minutes of every shift compensating for systems that fail them. In health care that is the whole ballgame: an adoption failure first, a non-renewal next, a write-down in the end. A founder who knows how care behaves at 2 a.m. has retired a risk no amount of diligence can buy.

The evidence is hard to find, which is the point. One study of device patents found not a single nurse in a random sample of 100 drawn from more than 65,000, a reflection of whose name reaches the patent, not who invents. Start-up databases record no clinical background, so most nurse-led companies and their exits go untracked, and whether nurses make good bets has never had clean data. The ones that surface make the case: NurseGrid, a nurse-scheduling app used by hundreds of thousands of nurses, was founded and led by a registered nurse, Joe Novello, and sold to the publicly traded HealthStream for $25 million in 2020. And the assumption that nurses cannot be the investors is wrong: a system chief nursing officer earns north of $300,000 a year, enough to meet the SEC’s income test for an accredited investor on base pay alone.

The same misread runs through the capital side. Nearly five million RNs, the largest clinical workforce in the country, are read out of the founder pool by default. Health systems run their own venture arms and still pass on nurse-led companies as not “directly relevant,” even when those companies attack the cost centers the system bleeds on: readmissions, length of stay, the churn of nurses who quit. There are companies selling nursing solutions with no nurse in the C-suite. Nurse buyers have learned to ask who the nurses on the senior team or advisory board are, and it is a short conversation when the answer is none. Capital moves fast for a familiar résumé and slow for domain knowledge, funding outsiders to a problem ahead of the nurses who already live it, discounting the one input that predicts whether the product survives the patient-care unit. That is alpha sitting in plain sight, a mispriced asset class the smart money has trained itself not to see.

None of this requires inflating a title. It requires capital to price a signal it has been throwing away. The head of a major health-care incubator once asked us what a chief nursing officer is. Buyers chase the clinical approval they recognize, the chief medical officer, and miss the one that governs whether a product works in the patient-care unit. Nurse executives are not hard to find. The market overlooks them not because they are hidden, but because it has underestimated their decision-making power.

The funds that learn to read the RN as an asset rather than a discount will own the category before the rest of the market reprices it. We know these founders exist. We are already writing the checks.

Author bios:

Beth A. Brooks, PhD, RN, FACHE, is co-founder and general partner of Nurse Capital, a venture fund investing exclusively in nurse-founded companies. A nurse executive and start-up advisor, she has mentored early-stage companies at MATTER, Chicago’s health care technology incubator, for more than a decade and teaches Finance for Innovation at Arizona State University’s College of Nursing and Health Innovation. She writes the career coaching column for Nurse Leader.

Dan Weberg, PhD, RN, FAAN is general partner of Nurse Capital, a venture fund investing exclusively in nurse-founded companies. A registered nurse with clinical experience in emergency departments and acute inpatient settings, he has led technology adoption and change initiatives across large integrated health systems and advises health tech start-ups, venture teams, and start-up boards. He was the first graduate of the PhD in Health Care Innovation Leadership program at Arizona State University.

Photo: asiseei, Getty Images