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Jeffrey McWaters
Chairman & CEO
AMERIGROUP Corporation
(NYSE: AGP)
The Background
Jeffrey McWaters saw a unique niche in the healthcare market. His vision was to operate a community-focused managed care company with an emphasis on the public sector healthcare market. He wanted to develop a company whose services would ultimately result in better health for Americans.
Why We Invested
It was obviously a good idea. Jeffrey took only three months to get AMERIGROUP off the ground.
In fact, NEA Partner Chip Linehan ended their first meeting by enthusiastically stating, "If I were starting a services business today, it would be a Medicaid HMO." Jeffrey knew then and there that this was the right partnership.
True to their word, NEA made AMERIGROUP's first financial commitment.
The Result
Ultimately, NEA helped guide AMERIGROUP to a successful IPO. The company remains profitable, currently exceeding $2.084 billion in sales with a market cap of $847 million.
Today, the company is a multi-state managed healthcare company. Focused on serving people who receive healthcare benefits through state-sponsored programs including Medicaid, Children's Health Insurance Program (CHIP) and Family Care, it is the largest private sector corporation focused exclusively on this population's healthcare needs. They serve more than 1 million members in nine states and the District of Columbia.
Why It Worked
While Jeffrey admits that NEA was, "sometimes appropriately tough on us,” he also knows they were completely committed to the corporate vision and to helping the company grow. In fact, Jeffrey was invited to meet with other NEA portfolio companies, to help him build external support teams and identify resources that ultimately aided in the company's expansion. Another example of NEA making more than a financial commitment to its portfolio companies.
AMERIGROUP is also a prime example of NEA's strategic commitment to partner with other VC firms. NEA's first meetings with AMERIGROUP were actually initiated by Acacia Venture Partners. In the end, the Series A investment included NEA, Acacia and Sutter Hill Ventures. NEA went on to participate in 3 more rounds.
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