Bradley Bostic On Raising $80 Million To Build A PE Firm Supporting AI And ML-Driven Companies Working For Improved Patient Outcomes

In the world of entrepreneurship, visionaries like Bradley Bostic repeatedly navigate the challenges of building, scaling, financing, and exiting companies. His story is about relentless innovation, learning from setbacks, and a deeply personal mission to revolutionize healthcare.

This interview traces Brad’s journey to building Health Cloud Capital and the challenges he handled along the way. The company has invested in companies like DecisionRx, hc1, 3Aware, and Covance.

In this episode, you will learn:

• Growing up in a banking family exposed Bradley to the successes and failures of local businesses, igniting his entrepreneurial ambitions.
• Bradley’s first venture—a college textbook e-commerce platform—demonstrated his knack for blending technology and business innovation.
• The loss of his mother to cancer drove Bradley’s mission to revolutionize healthcare and improve patient outcomes.
• His early venture, ChaCha, taught invaluable lessons about scaling, monetization, and the importance of sustainable business models.
• hc1 leverages AI to optimize lab data, aligning patient outcomes with value-based care and transforming labs into strategic assets.
• Bradley’s venture fund serves as a startup studio, creating healthcare companies and fostering innovation through capital, expertise, and partnerships.
• Bradley envisions a future where diagnostic tests automatically guide optimal treatment plans, saving lives and enhancing healthcare efficiency.

 

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About Bradley Bostic:

Brad Bostic has been founding, leading, and investing in high-growth technology companies for the past 25 years. Frustrated by the prevalence of one-size-fits-all, trial-and-error patient care, Brad founded hc1 to ensure patients are diagnosed effectively through optimized lab testing and treated with tailored medications that lead to better outcomes.

Under Brad’s leadership, hc1 has grown from a startup to an international leader using AI to identify risk signals in lab data spanning more than 260 million unique patients.

A recognized innovator, investor, entrepreneur, and business operator, Brad’s transformational leadership has rapidly propelled growth and enterprise value in public and private companies, yielding billions in market value.

He has been recognized as a premier business leader, awarded the “2020 Dynamic Business Leader of the Year” by the Indiana Chamber of Commerce, and honored as a “Becker’s Healthcare Top Entrepreneur” by Becker’s Healthcare.

Connect with Bradley Bostic:

• LinkedIn
• Crunchbase
• TheOrg
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: All righty. Hello, everyone, and welcome to the Deal Maker Show. So today we have an entrepreneur entrepreneur that has done it so many times that is easy to lose track. But again, we’re going to be talking about the you know everything that you like to hear, like building, scaling, financing, exiting, you know whether it’s early, you know through through transactions. I mean, whatever that is. But again, you know quite the inspiring journey. And without further ado, I’d like to welcome our guest today. you know Let’s welcome Bradley Bostic: h. Welcome to the show.

Bradley Bostic: Thank you so much, Alejandro. Excited to be on the Dealmaker show.

Alejandro Cremades: so Originally born in South Dakota, and but you moved quite a bit you know growing up because of your dad’s say job. How was life growing up for you?

Bradley Bostic: It was great. I had a very classic Midwest upbringing, ah kind of middle-class family. My dad was in the banking industry and when he would get promoted, we’d move to some other new town. And it’s kind of funny as I reflect my original ah stomping grounds of brooking South Dakota ah was somewhere in the 15 to 20,000 people in the whole town.

Bradley Bostic: ah So much different than Madrid, where you’re from. ah And then when we moved to Sioux Falls, South Dakota, I remember thinking, and I was in kindergarten, so I was a little kid, I thought, this is a huge city, right? It was like 125,000 people there. And then ultimately moved to Omaha, Nebraska, which was even bigger, but we did move around the Midwest quite a bit with my dad’s job in banking.

Alejandro Cremades: So how did you get into the whole world of business and perhaps computer? Because that’s why you ended up studying in Indiana. so So how was that combination? How did that come about?

Bradley Bostic: Yeah, there was definitely a big influence by my father because in banking, he was exposing me to a lot of interesting businesses that he would work with. And some of those did well. Some of them didn’t do well. And his job was to underwrite risk and provide loans primarily. So you heard a lot about businesses that didn’t work because when they didn’t do well, they couldn’t pay their loans. But then I also got a chance to meet some really interesting people that were very successful, that were entrepreneurs. And I just remember really marveling at what they were able to create and just feeling like while my dad had taken this more conservative path, I really wanted to go out there and create something from from nothing. That was always something I was interested in. So I was always pitching him on business ideas and he would tell me all the ways that they would fail.

Bradley Bostic: And then, you know, every once in a while I’d have a good one that he would say, hey, that’s a good idea. And that was what led me to deciding to to pursue business and computer information systems, because I was in college at about the time the web was being spun and Netscape came out and was on all the computers. And I had already been working on the internet through more of the telnetting and classic methods like that. So as a self-taught tech person who was exposed to business, it was just obvious for me that that was the path I wanted to go down.

Alejandro Cremades: I’m sure that your parents were not really thrilled with the idea of pitching them something that they could have required dropping out of college. So why there was a decision to make over there. Was that the case?

Bradley Bostic: That’s true. Yeah. When I was in college, I wrote a business plan for an e-commerce company. This was back in about 1995, and it was ah geared towards selling college textbooks over the internet. And so the idea was you put all your class schedule in, and then the system would automatically identify the books you needed and deliver those to you.

Bradley Bostic: ah which was a very novel idea at the time. Now that seems like a pretty basic concept, but nobody was doing that yet. And I did face this crossroads where I started the business, it was making some money. And I remember thinking, geez, should I drop out and just do this? And then I ultimately made the a choice to stay in school. And I’m glad I did. ah But you just never know how things are going to play out. Obviously, there are some pretty phenomenal success stories about people who dropped out of school to pursue their business. But ah just the way that my parents always kind of ah taught me but coming up that I would finish college and graduate, which is what I chose to do.

Alejandro Cremades: college its graduate and then also corporate America. Right. So you went to Ernst and Young.

Bradley Bostic: Correct.

Alejandro Cremades: You were doing some consulting. But I think that that they probably gave you some perspective now when it came to maybe addressing problems.

Bradley Bostic: It did. And that was another example. My dad encouraged me to get a quote unquote real job ah when I graduated from school rather than starting another tech startup. And so I went to work for Ernst & Young and had a chance to meet some really smart people, went through their consultant training program and got involved with some interesting projects. And some of those were in the healthcare world. And I was just amazed at the fact that if you’re building any commerce company everything you do was geared toward making the customer experience great. But in the health care industry it was the opposite everything was geared toward how the caregivers could document and bill for whatever they were doing really without regard to the patient having a great experience and i just felt like i could help make that better which is a big reason that i got into health care.

Alejandro Cremades: And obviously a big one there, you know, was a unfortunate event that happened with your mom. So how do you think that they really fueled your, I would say, interest in in in really solving ah problems around health care?

Bradley Bostic: Yeah, well, you know back in my ah early to mid 20s, I really felt like I could do anything. And that sort of continues to be my mindset to this day, good, bad, or indifferent. I’m always in the affirmative, having an abundance mindset. And so I was already down this path of, hey, I can make health care better. And then my mother got diagnosed with stage four cancer.

Bradley Bostic: And so all of a sudden it made it personal. You know, it wasn’t just about trying to make money or trying to do something that could create a career path. It was, wow, this is my mom. You know, she was my best friend. And all of a sudden she is thrust into this really scary diagnosis with stage four cancer. And I saw the actual reality.

Bradley Bostic: of a patient traversing a complex healthcare issue like that in this fragmented, siloed healthcare care environment. And that was when I knew that I just wouldn’t rest until I made an impact on healthcare care for millions of people. And I’ve been down this path now ah since then. She passed away ah December 23rd of 2000. And ever since, I’ve been waking up every day trying to find ways to make healthcare care better for other people.

Alejandro Cremades: Now, your your first company, that was ChaCha. I mean, one of the first ones. Obviously, the first one was in college. But one of them was ChaCha, and that was say definitely an experience where you got quite a bunch of like of lessons. you know In fact, one of them being able to understand what is the time to turn page. So tell us what happened with that experience.

Bradley Bostic: It’s so true and I’m very happy to share the wisdom that I’ve gained with other entrepreneurs where things haven’t worked out the way that you necessarily had hoped. And Chacha was one of those examples. It was a great idea. In fact, it resembled very much what chat GPT is, believe it or not. The idea was, what if you could ask any question on your mobile phone and get the answer?

Bradley Bostic: and have the answer be formed like a really smart human was answering that question. And this was back in 2005. And so this was not a healthcare specific business. This was a business partner that I knew that that was very smart. And he and I were having lunch one day and kind of sketched this out on a napkin and said, hey, let’s go after it. And so it was a bit of a detour outside of healthcare. care I still had other things, other interests in healthcare care while I was building ChaCha, but but this was my day job for a few years.

Bradley Bostic: And ah the the thing that went right with it was it was compelling and consumers loved it. So they could text ChaCha. This was back before apps became, you know, a thing on your phone. So you would text the the word ChaCha, ah which was two, four, two, two, four, two at the time. And you could ask it any question. and And by the way, if you try that number now, I have no idea where it goes. It’s probably not something you should send it to. But back then,

Bradley Bostic: It was our number and ah you would get an answer back and it was really cool and it was the combination of artificial intelligence and human intelligence. So if we had a high probability match in the system, it would answer you automatically.

Bradley Bostic: Like how many islets does a camel have? I remember that was one of the questions and it would answer, you know, three islets and this is why. um And and then if there was not an answer, it would route to a human that was in a community kind of like Twitter is now, you know, and Twitter actually was just starting up.

Bradley Bostic: At that time, in fact, we were one of the first, if not the first, integrations into Twitter where you could ask your question through Twitter, get the answer back. It was a really cool business. So it took off like crazy. Our marketing strategy worked brilliantly. We aligned with certain events because it was very fascinating. If you ask somebody, hey, we’ve got, or you said to somebody, we have this service on your phone that you can ask it any question and it’ll answer you. People would just be blown away by that idea.

Bradley Bostic: And then you’d say, okay, cool. What do you want to ask it? And they would have no idea what to ask it. So we had to find a way to associate it with some kind of event. So we launched it at the Sundance film festival. And it was positioned in a partnership with Sundance as mobile answers for fans.

Bradley Bostic: And so if you showed up at Sundance, you’d see this cha-cha promotion and you could ask it about like you too was performing there or there was a new movie or whatever. And so it was pretty cool. And and I had a chance to meet a lot of interesting people. In fact, I met Quentin Tarantino for one.

Bradley Bostic: And the first thing he said was, ask ChaCha who I am, which is what you do if you’re in the entertainment business, because I saw that as a pattern. And we asked it, and it gave a really interesting answer, and he loved it. ah So that made for some pretty cool selfies. you know and But ultimately what happened, that didn’t go well. um We scaled it to like 28 million monthly unique users, but there was a fundamental issue in the business model from a cost perspective.

Bradley Bostic: ah There was a microtransaction getting shared with every single answer that got provided by this community. And that drove a huge amount of cost when you started doing hundreds of millions of those answers. And on the other side, from a monetization perspective, there wasn’t really mobile monetization yet. And so we were actually putting our content on the Internet and and monetizing with Google Ads through our website. Well, Google ended up changing their algorithm and it blew the revenue model apart online as well. So it was just a series of things that just didn’t quite map to the thing that ultimately we wanted to achieve. And it’s I think a great metaphor is it’s like when you’re trying to fly into outer space,

Bradley Bostic: you have to have the exact right exit angle, right? Or or you or you will dissipate in the stratosphere on your way out. And in this case, we just didn’t have the exact right ah exit angle. And I ended up exiting the business early before that they ultimately uh, ended the business, but, um, and it worked out fine. I learned a ton. Um, it worked out okay economically because I was out, you know, before they got to a really dire situation from a capital perspective. Uh, but I learned a ton and had a lot of fun and, and, uh, really look back at that as one of the most valuable learnings I’ve had in my career. Uh, even though, you know, it definitely could have been a multi-billion dollar exit if we had executed a little bit differently, I think.

Bradley Bostic: ah But, you know, it worked out and and in a different way and I moved on.

Alejandro Cremades: So fast forward now to what you’re up to, right, with health cloud capital. I mean, obviously, there’s a bunch of stuff that you’re doing there. And we’ll talk about it, like, for example, HC1. But how do you land into the whole concept of health cloud capital? and And what were the sequence of events that needed to happen for you to bring into life?

Bradley Bostic: Yeah. What I, what I really determined one in going through the cha-cha experience has helped with this is, is I was so passionate about healthcare. It was just, everything was different when I woke up every morning thinking about how it was going to impact people’s lives in healthcare. care So I wanted to do that solely. And, uh, ultimately, um, I actually started HC one, um, before I started health cloud capital.

Bradley Bostic: But what i what I did was ah ultimately as we were growing HC1, we had some opportunities for some secondary proceeds ah from ah an and exit perspective while still maintaining control of the business. um And then got to the point in 2017 through a series of events we’d had historically, exit events and and secondaries that we decided, hey, my business partner Travis Morgan and I,

Bradley Bostic: i decided to start a fund called HealthCloud Capital and the initial investment for the fund was actually in into HC1. So it was a little bit of an interesting model where we became our own ah venture money basically because we wanted to inject more capital in the business but we wanted to do it in a structured way where we could continue to control the business.

Bradley Bostic: And then also we had developed this pattern for how you could go deep into a given healthcare data set, refine that data and enrich it, and then identify risk signals in that data in order to ultimately create um better outcomes for patients and boost the bottom line of healthcare care and really get into what people refer to as value-based care, where instead of having healthcare care payments happen every time there’s a transaction, a test or an appointment, which is kind of backward because then it you know you get paid more in healthcare care if you’re a caregiver or a clinic or a hospital if you have sicker patients. you know That’s kind of a perverse incentive. And so with our businesses, we saw that this value-based model was starting to emerge where you could get paid more as a doctor or a hospital if you provided care that resulted in better outcomes.

Bradley Bostic: And so there were a few of these opportunities that I saw where we could apply the same recipe that we apply in lab data with HC1 to other areas, which has now resulted in two other portfolio companies. ah One is real world evidence for medical device. Another is um looking at prescription data at scale using AI and technology to improve people’s prescriptions, which ultimately makes them healthier. um So that’s how HealthCloud Capital really came to be. And you know frankly, that I didn’t have a crystal ball, but i just my my gut told me if we had a fund, we could take our own ideas and we could scale them better and we could bring the right people to run them. And that’s what’s ultimately happened. So we control all three of those companies and they’re all part of that HealthCloud Capital family.

Alejandro Cremades: So is it technically an incubator that you guys have, or like a startup studio, or how would you…

Bradley Bostic: You know, it’s really not it’s really not that fancy.

Alejandro Cremades: I will label it.

Bradley Bostic: It’s um it’s capital and it’s it’s you know people that know about healthcare care and we have this broad network. um I actually have a podcast called Boombastic Health as well that I started to have conversations with innovators that are bold in the healthcare care space.

Bradley Bostic: And those are the kinds of people that ultimately become CEOs of companies that we start. So I would say that we have a pattern, like ah we have a recipe that we bring to the table for each of these companies to de-risk them. And we also have a lot of relationships because every one of these businesses relies upon provider ah-oriented data sets to generate value. And because we’re trusted and respected across the healthcare care industry within health systems and and within payers and and within pharma ah we have a very short list of people we can call up that will engage with us and unlock a lot of value so for example. We have a relationship with mayo clinic great partner to work with very you know ah gold standard kind of branded health care.

Bradley Bostic: ah When we decided to ah address this issue of real-world evidence for medical devices and formed three aware with formed what became 3Aware, we ended up getting engaged with some of our friends at Mayo Clinic and saying, hey, we can solve this at scale. And they said, wow, that would be great. We have medical device companies that come to us all the time and say,

Bradley Bostic: How can we mine the data to see where we’re having adverse events or where we could better apply our devices or create new devices? And and we said, yeah, well, this is a great partnership. And so ultimately, that resulted in Mayo partnering to provide this data access for 3Aware so we could apply our AI and natural language understanding to unearth information about devices. But then ultimately, they liked it so much, they co-invested with HealthCloud Capital.

Bradley Bostic: So it’s ah it’s a pretty cool, you know as you’re aware in any industry, even though healthcare care is huge, there aren’t that many people who are really the bold innovators. theyre It’s a kind of small club over time that you get to know. So that’s really what we bring. It’s the relationships and the know-how.

Alejandro Cremades: So let’s let’s dive deep into one of those assets that you guys have in health cloud capital, which is the one that you lead. And that is HC1. For the people that are listening, what is HC1? What is the business model there? How do you guys make money?

Bradley Bostic: Yeah, so HC1 makes money by transforming a health systems laboratory, the the clinical lab, into a strategic asset that better diagnosis patients more ah effectively, and also boost the bottom line of the healthcare system by increasing the right kind of volume into the laboratory from other doctors across the community that can use that lab to do their lab testing as well. So just like any other business,

Bradley Bostic: The lab is a business that has to manage its costs and work on its growth. It just so happens that 80% of all diagnostic decisions are informed by laboratory results. So typically the lab gets perceived to be a cost center within a health system.

Bradley Bostic: and it doesn’t really get leveraged in a very strategic way. But come to find that if you use AI and you sit on that data across the entire healthcare continuum, you start to see these constellations of of signals from lab information that’s longitudinal, meaning it’s back from the beginning of when you started going to healthcare care checkups all the way to today. You can do things that are really, really powerful to prevent illness.

Bradley Bostic: you can help patients avoid having chronic kidney disease. You can optimize the way that you prepare a patient for a surgery and ensure that they aren’t anemic when they come in for surgery, which can lead to bad outcomes. So it’s like the lab is the central nervous system that controls healthcare care delivery, but it hasn’t been utilized in that way. And we make it so it’s lit up across the entire healthcare care continuum to drive the optimal value. And the final thing I’ll mention that People take this for granted. It seems like when you get lab testing done, of course the doctors know exactly what lab tests to run.

Bradley Bostic: It’s not always the case. Typically, there are standing test kinds of um panels, they call them, that will get run on patients. Oftentimes, there might be better, newer tests that could be run. There might be more proactive ways that you could be monitoring different ah values within your body from testing that just get missed because ah doctors are busy. And they spent you know time in medical school studying lab 20 years ago There’s no way for a human being to know everything all the time and to put the time it takes to ensure all the testing is optimized. So we’re using AI and technology to make it so every single caregiver, every single healthcare system can be doing the optimal testing of all their patients, which ultimately helps you stay healthier and stay out of the healthcare system. And that’s why I’m so excited about HC1. Our scale is big. We’re covering over a hundred million

Bradley Bostic: unique individual Americans at this point with our systems. And that’s through healthcare system relationships and ah clinics and labs all across the United States.

Alejandro Cremades: And also, how much capital have you guys raised to date?

Bradley Bostic: Around 80 million.

Alejandro Cremades: And what has it been the experience of raising that money? I mean, obviously, now you guys have a good understanding of how the capital you know structures work. So you know why did you go out you know to raise money from external people? And and what was that process like?

Bradley Bostic: Sure, ah we have been fortunate through HealthCloud Capital to be able to maintain control of the business through a small ah you know kind of group of us as partners. But over time, you start recognizing that you need other investors that have additional connections, additional ideas, additional talent that they can bring into the, this has been my experience at least. And so ah we’ve been very selective about who we’ve brought into the business.

Bradley Bostic: um And then on top of that, ah we recently made an acquisition. And that acquisition was in large part to bring in some additional talent. And through that acquisition, we brought in a new capital partner called Arsenal Capital ah Partners, who was the owner of the asset that we acquired. And they brought they they brought that asset into our company through this transaction.

Bradley Bostic: and are now and an equity partner with us. um And they are a top tier fund that we really appreciate as a partner. um And so it’s been a bit of an evolution, I would say, but we’ve been we’ve been ah treating HC1 as the long term kind of business build that it is. It’s not an overnight thing to go connect up to thousands of healthcare systems and labs and generate this kind of value across all this data. Frankly, we’ve trained our AI algorithms on um like over 90 billion lab results now. And so the system can automatically organize and enrich data in a way that you couldn’t do

Bradley Bostic: if you if you hadn’t done all that training of the models. And that took you know a decade, right? So ah we’ve managed to stay in position of having control of the business. And then this recent acquisition was significant for increasing the scope of our capabilities to help health systems and labs optimize the impact that they have across the continuum of care. And then you’ll see some big announcements from us I would predict in the next year as we continue to step on the gas and Consider additional ways to expand both organically and through acquisition.

Alejandro Cremades: Amazing. Now, obviously, you know, I say you’re expanding acquisitions, raising money. You know, there’s always a vision, right, that people are betting on. And talking about the vision, if you were to go to sleep tonight and you wake up in a world where the vision of HC1 is fully realized, what does that world look like?

Bradley Bostic: But remember the story about my mom being sick and she got to this point where there wasn’t a conventional therapy that was best for her. And so the next step was what are the experimental options? What are the the research oriented options that are out there? And there really wasn’t a good answer for that. So imagine a world in which every single diagnostic test is leading to the optimal treatment.

Bradley Bostic: And every time a patient’s identified where they’re eligible for some novel new treatment, and they should be in more of an experimental program, that that match is made automatically. ah That there isn’t this kind of hope factor of, gosh, I hope my mom gets the best possible care. I hope she gets the best chance at living a longer life. If you could know definitively that the diagnosis was made as early as possible, as accurately as possible,

Bradley Bostic: and that the treatment was being performed in an optimal way and ultimately connect that all the way through to the pharma industry and what they can do to help advance new medication therapies and treatments. Wouldn’t that be awesome? Wouldn’t that be great if we all knew and had confidence that every single patient was treated in that way? And that’s what I would wake up to tomorrow.

Alejandro Cremades: Now, let’s talk about the past, but doing so with a lens of reflection. Let’s say I was to bring you back to the moment where you were thinking about starting a company. Let’s say you’re back in Indiana University and you’re able to stop that younger self, you know, maybe coming out of one of the classes and you’re to give that younger Bradley one piece of advice before launching a business. What would that be and why, given what you know now?

Bradley Bostic: Yeah, I would say the number one piece of advice would be to ensure that the business was um

Bradley Bostic: constructed with a ri recurring revenue engine. ah That is just, and that’s clearly become the norm now. But back then, you know, people were still selling license software and I was in the consulting business. So my dad would say, do something where you make money while you sleep.

Bradley Bostic: And I didn’t really understand what he meant. Frankly, it took me a little while. and And now I realize he was basically saying, do something that has this recurring revenue that builds the ah mountain, ah because then you have all these ways to innovate with that with those additional resources. So I’d say that would be the number one advice I would give my younger self is always do things that have recurring revenue.

Alejandro Cremades: I love it. Bradley for the people that are listening that would love to reach out and say hi what is the best way for them to do so.

Bradley Bostic: Please find me on LinkedIn. I am Bradley Bostic: , B-R-A-D-L-E-Y Bostic on LinkedIn. And my link tree is also there on my LinkedIn profile so you can see all the other ways that you can connect with me and follow me. And would love to have you see, check out my Boom Bostic a healthcare care podcast where we have bold innovators on that are talking about the cool things they’re doing in healthcare care that we can all learn from.

Bradley Bostic: And then there’s also a newsletter that goes along with that. So those would be the best ways to find me after this.

Alejandro Cremades: Amazing. Well, Bradley, thank you so much for being the deal maker. It has been an honor to have you with us.

Bradley Bostic: Thank you, Alejandro. It’s been really fun. I appreciate it.

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If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at al*******@pa**************.com“>al*******@pa**************.com

 

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