Inside Oak HC/FT's $1M to $100M Check Strategy

1. Key Themes

Horizontal AI Platforms Plus "The Smallest Large Market You've Ever Seen"

Oak's thesis is that healthcare and fintech together are roughly half the economy, and the firm knows the buyers intimately. That relationship depth becomes a go-to-market weapon for horizontal AI companies that need to sell into notoriously hard-to-penetrate enterprises. Annie Lamont said: "between our fintech and healthcare practice, it's really 50% of the economy. So we know intimately a lot of the enterprises and customers these companies are selling to." [00:03:02] She added: "It's the smallest large market you've ever seen in that it's, you know, 100 providers that matter. They're 10 large payers." [00:03:32]

AI Has Finally Crossed the Threshold in Drug Discovery

Oak watched AI in life sciences for a decade without seeing it yield developable therapeutics, then everything changed in about two years. Lamont: "We've been looking at AI for the last decade and have not seen it produce more developable products and therapeutics. And everything's changed the last two years." [00:00:11] The enabling factor was LLM-era infrastructure spawning non-LLM models: "the advent of LLMs with the infrastructure around them, you've created biological models and models around chemistry that are not LLMs. They're very specific to the industry." [00:06:05] Oak is "intentionally going into that space" and expanding its San Francisco office with new partners [00:05:11]. Their entry trigger is consistent: "we felt like we are now at the precipice. We are at a point of real impact. And that's generally when we get involved." [00:13:36]

Devoted Health: Defensibility Built Over a Decade, Then Supercharged by AI

Lamont offered Devoted as the template for "speed plus defensibility." The company spent years on state licensure, provider networks, broker channels, a proprietary payer tech platform, and its own medical group, and only then layered on AI. Lamont: "you're not just the speed of growth, but the defensibility of something." [00:13:59] The results: "Over the last year, they've tripled the size of their company. They have halved their operating ratio. They have dramatically increased their EBITDA. And you have a company that is, I would say, almost impossible to compete against in the future." [00:00:11] She called it "probably the best example of AI applied to healthcare in the world right now." [00:16:39]

Founder Quality Bar Is Rising: "Leveling Up" the Entrepreneur

Lamont argues that the speed of change forces a higher floor for founder quality. Her words: "what is different now is the leveling up of an entrepreneur. The people you are backing have to be better than in the past... there have to be many more entrepreneurs closer to that level in order to build these great companies." [00:27:22] She also pushes back on the idea that engineers are obsolete: "people said, we're not going to need engineers... But I don't think in the first wave that is actually happening." [00:27:50]

Repeat Founders Choose Oak Again

Oak's brand with founders is measured by who comes back. Lamont: "we do back repeat founders and I think what I'm most proud of is they choose us to back them again." [00:29:53] Examples include Todd Park (Athena, Castlight, Devoted) and Brad Smith (a hospice/palliative company, then Carebridge and Main Street). The key criterion for the Smith relationship: "you are building something that nobody else is doing. There's so many me too companies." [00:30:51]

The Barbell Market and Why Oak's Check Range Matters

Lamont described a barbell: seed funds and late-stage/crossover capital both thrive, so growth investors must be large enough to matter. "you have to be able to write relatively large checks or entrepreneurs, like you're not gonna be a factor. Like why do they care?" [00:44:16] Oak runs life-cycle investing, with 20% to 40% of the fund early: "if you think about that in our fund, that's 400 million to 800 million early." [00:44:45] Funds grew from $500 million to $2 billion.

Valuation Distortion: "10% Is Worth It and 90% Is Not"

Lamont is blunt that most AI-era valuations won't hold up: "I don't know, 5% of these companies are worth the number that they're given... there are only so many that actually have a TAM that's that large." [00:45:13] And: "everything is distorted. Every company is, is getting probably inflated valuations. And you know, that'll correct at some point, like it always does. And, uh, I just think you've got 10% of the world. It's worth it. And 90% is not." [00:45:43] She also noted the exit constraint: "who's going to buy this?... I don't know why some random tech company would buy this for some strategic multiple." [00:49:23]

M&A Is Broadening, and Talent Retention Decides Success

Frontier labs, Microsoft, and Oracle could all become acquirers in healthcare, widening exit options beyond the traditional five payers and McKesson/Cardinal. Lamont: "you now have technology... you have the frontier labs actually interested in moving into these spaces." [00:33:42] But success hinges on people: "they're probably more failures than successes, but that has so much to do with how an acquirer treats the people and retains the people and the talent." [00:36:20] She cited JPM as a good integrator and the credit-suisse-style approach as a bad one: "they disrespected those people and... did not put them in senior positions. And so why did you buy the company in the first place?" [00:40:36]

Healthcare AI Is Invisible Infrastructure, but the Experience Gain Is Real

Administrative burden is the first target. Lamont: "It is 25 to 30 percent of all healthcare costs are really administrative." [00:17:52] On clinical accuracy: "30 percent of images are read wrong by radiologists... with AI behind it, you're probably not going to miss much." [00:18:21] She also noted that the clinician will no longer have their back turned "inputting data," improving patient experience even if patients never attribute it to AI [00:25:04].

China as an Existential Competitive Threat in Life Sciences

Lamont framed China's rise as underappreciated and tied to U.S. research funding choices: "the pharma in the last four years has 50% of the outside dollars they're spending on research are going to China. That was not the case five years ago. And so we have an existential threat in this country." [00:08:03] She argued the "Me Too" stereotype is outdated: "on the research side, they have as many or more patents now coming out of university and out of their research arms as we have." [00:09:08]

2. Contrarian Perspectives

Your Founder Bar Is Probably Too Low, Even in a Hot Market

Most investors chase theses and growth numbers. Lamont says the defining early-career lesson was the opposite. From mentor Jerry Gallagher: "you are not, the bar for your entrepreneurs is not high enough." [00:59:49] She sees the same trap in junior investors: "it's so easy to get excited about ideas or even, even numbers... Oh, it's growing from zero to 10, you know, it must be great. Serve with the people every time." [00:59:22]

Only ~10% of AI Companies Justify Their Valuations, Even From an Active AI Investor

A firm that just deployed $100 million up front into one AI company is simultaneously warning that the market is distorted. Lamont: "I just think you've got 10% of the world. It's worth it. And 90% is not." [00:46:10] The mechanism she cited is exit economics: many niche AI companies "are only going to be so large. And then you're like, who's going to buy this?" [00:49:23]

Avoid Crowded "Me Too" Categories, Even in Hot Venture Hubs

Lamont explained why Oak historically underweighted healthcare in Silicon Valley: "somebody starts a company here and there are five other companies here." [00:31:21] Her preference is to back founders building models "that nobody else was doing."

Hospitals and Providers Aren't the Disrupted; Administrative Cost Is

Many predict AI will gut legacy healthcare institutions. Lamont argues the opposite for acute care: "they're not going anywhere... we need them to be the best that they can be." [00:17:23] The value capture is in stripping administrative burden and improving accuracy, not displacing the institutions. Even on surgery and radiology: "we're not going to eliminate radiologists. We probably need more of them." [00:18:51]

Don't Assume Chinese Biotech Is Just Derivative

The common view is that China produces "Me Too" drugs. Lamont acknowledges that but says research output is now at parity or better, and U.S. NIH cuts could erode the university pipeline: "if we're fundamentally undermining those... we will compromise the ultimate pipeline of drugs." [00:09:51]

3. Companies Identified

Chai Discovery

AI drug design and discovery company building models and products usable by non-technical pharma staff. Oak invested last year. Lamont on the roadmap: "first antibodies. So they've nailed that... they're incredibly productive right now, like a hundred times more productive than a lab without them. And the next would be peptides and then small molecules." [00:11:48] On trajectory: "they're going to have a majority soon of the largest pharmaceutical companies working with them in a very deep way... the models are evolving and developing faster than anyone else's." [00:32:20] She called it a potential "company for the ages."

Devoted Health

Medicare Advantage insurer with its own tech platform and medical group, founded by Todd Park and Ed Park. Why mentioned: the best example of AI applied to healthcare and a defensibility case study. Lamont: "Over the last year, they've tripled the size of their company. They have halved their operating ratio. They have dramatically increased their EBITDA." [00:00:11] "They will be going into commercial in the future." [00:15:40]

Augur

AI orchestration, data-insight, and operational layer for supply chain and logistics, led by ex-Amazon executive Dave Clark. Oak committed $100 million up front. Lamont: "providing agents that are actually then executing on the insights throughout their entire supply chain... they now have something like eight clients. And these are all major, you know, Fortune 500 companies." [00:54:34] "We don't know anybody else that's doing that in the way that they're doing it." [00:55:32] Oak found the company through its internal talent function.

Halluminate

Reinforcement learning environment company whose customers are large AI labs; it simulates financial analyst workflows and even an entire real estate brokerage. Lamont: "they've gone from like zero to 60 in six months. And we think it's on an incredible trajectory." [00:52:41] Oak was found via YC networking and its financial-services reputation among the labs.

Athena Health

Oak-backed company founded by Todd Park and Ed Park. Lamont on its eventual home: "ultimately Athena... has been traded in the PE world." [00:33:42] A model for "very positive EBITDA companies" outside of strategic acquisition.

Carebridge

Palliative care and complex-care company founded by Brad Smith, sold to Elevance. Lamont called it "the most recent great example that's working extremely well, within Elevance and is rolling out. I think they're dramatically expanding the company within the company." [00:35:51] "A durable company that has been created... inside a strategic that sometimes can destroy things." [00:31:51]

Main Street Health

Co-created with Brad Smith alongside Carebridge after "ideated for a year on both of them." [00:30:51]

Castlight Health

Oak-backed company where Todd Park was a founder, cited as part of the repeat-founder pattern [00:29:53].

Elevance Health

Acquirer of Carebridge, and an example of a payer that integrated well and let the acquired company expand [00:35:51].

Colossal Biosciences

Mentioned by Molly O'Shea as the company led by Ben Lamm, whom she had spoken to about biotech and AI [00:05:35].

Palo Alto Networks

Cybersecurity acquirer (~40 acquisitions in eight years under Nikesh Arora). Molly O'Shea cited it as an example of respecting acquired teams: "They're the expert. We got to make sure that we retain that." [00:37:47]

Rocket Lab

Aerospace company that has made roughly seven acquisitions; its CEO said "there's no such thing as a small acquisition." [00:38:16]

Nuance / Microsoft

Lamont: "Microsoft tried before... they bought Nuance, which is used elsewhere, but... is mostly dedicated to healthcare." [00:34:31] Signals potential for tech giants to go deeper.

Cerner / Oracle

Oracle bought Cerner and "might want to go deeper there." [00:34:31]

Ambience

AI healthcare company named as one with a massive runway: "certainly some of the companies like Ambience and others." [00:49:23]

Curana Health

Oak build-up in senior care: "we've bought a company and then we've, like, built around it across the U.S." [00:56:55]

Infusion for Health

Oak-built ambulatory infusion centers: "we've started infusion, ambulatory infusion centers all over the country." [00:56:55]

Psych Solutions

Behavioral health company where Oak did a PIPE: "we did it with a company called psych solutions, which was in behavioral health." [00:43:20]

Dick's Sporting Goods, PetSmart, Office Depot

Retail successes tied to mentor Jerry Gallagher's track record [00:59:49].

Genzyme, Cephalon, Alexion

Early biotech companies from Lamont's career start [00:04:42].

Brex

Episode sponsor and the company on which Sourcery runs; cited customers include Vercel, OpenAI, Anthropic, Granola, and Deepgram [00:19:57].

Anthropic, OpenAI, Vercel, Granola, Deepgram

Named as Brex customers in the sponsor read [00:19:57].

Turing

Sponsor providing RL environments and data systems for frontier labs; clients include NVIDIA, Anthropic, Salesforce, and Gemini [00:20:47].

Zone

Sponsor developing next-generation AI data center campuses [00:21:14].

VCX by Fundrise

Sponsor: public ticker for private tech [00:47:49].

Public

Sponsor with AI-powered "generated assets" index builder [00:47:49].

Deel

Sponsor for global payroll and hiring [00:48:45].

Village MD, Komodo Health, Cotiviti, One Medical

Portfolio companies listed in Lamont's introduction as notable Oak investments [00:01:37].

Jefferies-style "JPM" Integration

JPMorgan cited as an acquirer that retained and elevated acquired talent [00:40:09].

Da Vinci (Intuitive Surgical)

Lamont: "Da Vinci was a brute forcing in those compared to what we're going to see now" on robotic surgery [00:19:33].

4. People Identified

Annie Lamont

Founder and managing partner of Oak HC/FT, First Lady of Connecticut. Introduced with: "$14 billion across your career, 40-plus years of investing... 70-plus successful exits, 15 IPOs, number one healthcare investor on the Forbes Midas list... seven times." [00:00:00] Her stated drive: "I'm a lifelong learner... I've never learned so much so fast in my entire life." [00:57:23]

Todd Park

Co-founder of Athena Health, Castlight, and Devoted Health; served in the Obama administration. Lamont: "when I met Brad Smith or Todd Park or Josh and Jack at Chai, I mean, you walk in the room and you know, in five minutes, you want to back these people." [00:29:16]

Ed Park

Co-founder of Athena Health and Devoted Health (CEO of Devoted), described as a Harvard computer science major with 30 years in healthcare [00:28:19].

Brad Smith

Serial healthcare founder (palliative care model, Carebridge, Main Street). Oak backed him three times. Lamont on his first pitch: "he described a palliative care model that was a win, win, win, win, win for the patients, for the payers and the healthcare system." [00:30:21] "the perfect trifecta for healthcare."

Josh Meier and Jack Dent (Chai Discovery founders)

Referred to as "Josh and Jack at Chai." Lamont: "this may be a company for the ages... they could own a huge piece of the continuum in healthcare and in drug development design." [00:31:51]

Dave Clark

CEO of Augur; spent 22 years at Amazon building supply chain and logistics, then ran e-commerce. Lamont: "he's rather famous in that world... his team's incredible." [00:54:10] He initially wanted a PE-style acquisition before deciding to build an AI supply chain company.

Jerry (Halluminate founder)

Lamont: "We love these founders. Jerry's amazing." [00:50:52]

Andrea Adams (Andy Adams)

Oak co-founder. Lamont: "I have Andrew Adams as my partner... we are not the same person. And we almost always come to the same conclusion talking it through." [01:00:47]

Jerry Gallagher

Retail investor and Lamont's early mentor, tied to Dick's Sporting Goods, PetSmart, and Office Depot. His maxim: "you are not, the bar for your entrepreneurs is not high enough." [00:59:49]

Ben Lamm

CEO of Colossal Biosciences, whom Molly O'Shea interviewed recently [00:05:35].

Nikesh Arora

Palo Alto Networks CEO (~40 acquisitions); acquires because "they're smarter than us" [00:37:47].

Peter Beck

Rocket Lab CEO (referenced by role): "there's no such thing as a small acquisition." [00:38:16]

Mark Zuckerberg

Named as a big-name figure putting attention into life sciences and biology [00:12:43].

Molly O'Shea

Host of Sourcery who conducted the interview.

5. Operating Insights

Build a Dedicated Talent-Sourcing Function Inside the Fund

Augur was surfaced by Oak's internal talent team, not by deal flow. Lamont: "We have an amazing talent function at Oak and it's really embedded in our investment strategy. And they are identifying people every day that we should be talking to who are great entrepreneurs, great talent, whether it's in existing large legacy companies... [or] 20-year-olds that are dropping out of college." [00:53:25] Then "ideated with him for a very long time" before committing.

Commit Capital Up Front When the Team and Plan Are Expensive

For Augur, Oak recognized that "he's got a big team, expensive team, a lot they needed to do quickly. And we committed $100 million to them up front." [00:56:01] This is a differentiated way to win a hot deal: remove the fundraising overhead.

Be a Founder-Friendly Lead: Let Founders Choose Co-Investors

Oak's life-cycle model says it will participate in most rounds, but "if we have enough ownership of a company and the founder wants two new investors because those investors are going to be helpful to the company... bring two new investors in." [00:42:27] She stresses "having good partners is everything. We all know that a board can destroy a company." Retaining founder goodwill is what drives repeat backing.

Acquire Products, Not Teams, Unless You Plan to Inspire the Team

Lamont's M&A rule: "If you just want product and data, then that's what you're getting. And if you want product to evolve, then you probably need to figure out how to inspire a team or keep them separate." [00:36:46] Decide at deal time which you are buying, then structure retention accordingly.

Use "Ideation Time" With Repeat Founders to Create Differentiated Companies

With Brad Smith, Oak "ideated for a year" on two concepts before launching Carebridge and Main Street [00:31:21]. Spending a year on concept design with a proven founder, rather than reacting to a pitch, is how Oak avoids Me Too categories.

6. Overlooked Insights

Oak Can Hold Up to 10% in Public Common Stocks, Including PIPEs in Biotech

Mentioned in passing during the fund-structure discussion, but significant: "we even can invest 10% of our fund in common stocks. So we've done pipes in the past... they're rampant in biotech life sciences. So we may be, you know, sort of back there because you actually get proprietary information in a public company... it's really a funding mechanism to be public, not a liquidity event." [00:43:20] This flags that public biotech is functioning as private-style growth financing, and that AI-era life sciences deals may increasingly be structured as PIPEs with information advantages, a lane most venture funds are not equipped to play in.

The Supply Chain "Sophistication" Gap Is a Hidden Greenfield

Lamont's offhand reaction to Augur's early customer discovery is a quiet market signal: "We thought... these major companies had very sophisticated supply chain software analytics driving them. And then you get into these companies, you're like, holy shit... like, how are you managing this?" [00:55:04] The implication is that even Fortune 500 operational stacks are far less mature than assumed, meaning agentic orchestration layers may face greenfield deployment across many "solved" enterprise functions, not just supply chain.