Mark Bakken has shown he can build a successful business. Now, he wants to help others in Madison do the same.
The co-founder of Nordic Consulting — a business built on the complexity of Verona-based Epic Systems Corp.’s software for health care organizations — serial entrepreneur Bakken is on to his next venture.
Instead of courting big health care organizations to help them use their Epic-installed electronic health records systems, Bakken is seeking out small-potato companies with tech that might hook into Epic’s systems and lower the cost of health care or make it work more smoothly.
In offices at 111 N. Fairchild St., at State Street, Bakken and two employees are putting together Madison HealthX Ventures, a fund he says will give a leg up to promising health IT start-ups.
Bakken plans to amass $10 million to $20 million so HealthX can invest in 10 to 15 companies over a couple of years, at $300,000 to $500,000 per company, to start.
So far, at least $4 million is in the pot — including $1 million of Bakken’s own money — and Bakken said he has a long list of potential participants. “I know, roughly, one-third of Epic’s customers. A number have expressed an interest in investing in this fund,” he said.
There also are contacts made through the three East Coast venture firms that invested $33 million in Nordic in 2012 and, on the West Coast, Kaiser Permanente, which funneled $5 million into Nordic in 2013.
“I’ve got connections with roughly 30 other venture capital funds that focus on health care,” Bakken said.
He plans to start making investments through Madison HealthX Ventures around March or April, and most of the companies will probably be from the Madison area, as well as some from around Wisconsin.
As an individual investor, he’s already given $25,000 to $100,000 to eight health IT start-ups, mostly from Madison: Catalyze; Forward Health Group; Wellbe; Moxe Health; 100health; Quietyme; Healthfinch; and HealthMyne.
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“Most of these are really starting to get some good traction,” with at least four drawing revenues of more than $1 million a year, said Bakken. Their concepts are “around the edges” of what Epic is doing ... but “are not the highest priority for Epic to be thinking of,” he said.
He said he’s looking at about 30 more companies that have been referred to him for possible investment.
What drove Bakken to establish a venture fund? “The passion for me is that I feel like I won the lottery with Nordic,” he said. “The company’s grown, and it’s surpassed all my dreams.”
Founded in 2010 by Bakken and former Epic employee Grant Hambrick, Nordic calls itself the largest Epic-only consultant firm, with 475 employees, including 75 in Madison, and $81.4 million in revenues in 2013. Bakken stepped down as CEO in December but remains board chairman.
With HealthX, Bakken also plans to set up forums. One in May will piggyback with WTN Media’s Digital Healthcare Conference, with a goal of connecting young health IT companies with potential investors. Another, in the fall, will tie in with Epic’s users group meeting and will introduce start-ups to health care organizations.
“It’s a way for the companies to meet new potential customers and for customers to find out about potential solutions,” Bakken says.
A native of Jackson, with a bachelor’s degree in computer science from UW-Madison, Bakken, 50, and his wife, Peggy Merrick-Bakken, are the parents of a 17-year old daughter and twin sons, age 22.
Not all of Bakken’s business ventures have become such home runs as Nordic. Goliath Networks, founded in 1993 to provide computer networking services, grew swiftly but ran into problems after the dot-com bust; its assets were sold to an Arizona company in 2002. Bedrock Managed Services and Consulting, founded in 2004 to do outsourced IT services, had some early success but later filed for bankruptcy reorganization in 2008 and was sold to Tushaus Computer Services.
“There have been peaks and valleys along the way. That’s a big piece of it,” Bakken said. “I feel like I’ve learned a lot of lessons. It would be nice to be able to pass that on to people who have some good ideas. .... Hopefully, there’ll be some shooting stars there.”