The Operating Partner's First Hundred Days, With Owners and Dates

An operating partner who joins a healthcare growth-stage company for a minority investor holds no command authority. Every action in the first hundred days rests on a right written into the deal documents, and the first to exercise is oversight of compliance, because federal guidance treats investors who provide operational oversight as carriers of fraud-and-abuse risk. The plan assigns each workstream an owner role, a day and a deliverable.

01The Mandate of a Minority Seat

In growth equity, the investor usually holds a minority position, and the operating partner arrives as its representative in a company the founders and the chief executive still run. In healthcare growth equity, that company is one whose technical risk is retired and whose commercial risk is live. The company, not the operating partner, owns the hundred-day plan. The operating partner's work is to make sure the plan exists, that each line has a named role and a date, and that the board can see whether the dates are met.

The representative's authority comes from four places, and the first deliverable is a register that maps each one to the document and section that grants it: a board seat or an observer seat, negotiated information rights, protective provisions that require the investor's consent for named actions, and, where the investor's fund needs one, a management rights letter. A board designee is a director, with a director's duties to the corporation and all of its stockholders. An observer holds a contractual seat at the table and no vote. The register should say which one the operating partner holds before the first meeting.

The designee role carries a conflict that Delaware has named precisely. In In re Trados Inc. Shareholder Litigation (Del. Ch. 2013), directors who were fiduciaries for venture funds holding a liquidation preference "faced the dual fiduciary problem" identified in Weinberger v. UOP, and the court repeated that "there is no 'safe harbor' for such divided loyalties in Delaware." The court found that those directors faced a conflict of interest as dual fiduciaries in the sale it reviewed, although it ultimately held the transaction fair to the common stockholders. A designee whose two sets of beneficiaries diverge should say so in the boardroom and in the minutes.

Statute sets only a floor under the information the representative receives. Section 220 of the Delaware General Corporation Law, as amended by 85 Del. Laws c. 6, now defines the "books and records" a stockholder may inspect as an enumerated list that includes board minutes, board materials and three years of annual financial statements, and it requires a "proper purpose." Annual statements and minutes do not run a company. The negotiated information right, which delivers monthly financials and operating data, makes the role workable.

Under the Department of Labor's plan asset regulation, 29 CFR 2510.3-101(d), a fund that holds benefit-plan capital and relies on the venture capital operating company exception must hold "management rights," meaning "contractual rights directly between the investor and an operating company to substantially participate in, or substantially influence the conduct of, the management of the operating company," and must, "in the ordinary course of its business," be one that "actually exercises management rights" with respect to one or more of the operating companies in which it invests. For such a fund, the operating partner's dated log of meetings and recommendations is evidence of that exercise and should start in the first week.

02The Compliance Baseline

The HHS Office of Inspector General's General Compliance Program Guidance (November 2023) addresses new investors directly. It observes that "business practices that are common in other sectors create compliance risk in health care, including potential criminal, civil, and administrative liability." In its section on ownership, including private equity, it states that an understanding of health care law and of an effective compliance program "is particularly important for investors that provide management services or a significant amount of operational oversight for and control in a health care entity." The guidance is voluntary and nonbinding by its own terms, and it is still the clearest statement of what the government expects an investor's representative to know.

The enforcement record shows why the expectation matters. In a Department of Justice settlement announced September 18, 2019, a compounding pharmacy, two of its executives and the private equity firm that managed the pharmacy on behalf of its investors agreed to pay $21.36 million to resolve False Claims Act allegations. The firm "allegedly knew of and agreed to the plan to pay outside marketers to generate the prescriptions and financed the kickback payments to the marketers." The release states that the claims were allegations only and that there was no determination of liability. The lesson is narrow: approving the funding of a commercial program is an act, and the representative should understand how the program generates referrals before the vote.

The statute behind most of that exposure is the federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), which makes it a felony to knowingly and willfully offer, pay, solicit or receive remuneration to induce referrals of items or services payable by a federal health care program, punishable by a fine of up to $100,000, imprisonment of up to ten years, or both. Subsection (h) provides that a person need not have actual knowledge of the statute or specific intent to violate it, and subsection (g) makes a claim that includes items or services resulting from a violation a false or fraudulent claim for purposes of the False Claims Act.

The first review of billing carries its own clock. Under 42 U.S.C. 1320a-7k(d), an overpayment must be reported and returned by the later of 60 days after it was identified or the date any corresponding cost report is due, and an overpayment retained past that deadline is an "obligation" for purposes of the False Claims Act. A coding audit in the first month can therefore start a legal deadline, so the plan routes any finding to counsel the day it surfaces.

Board oversight is a fiduciary matter as well as a regulatory one. In In re Clovis Oncology, Inc. Derivative Litigation (Del. Ch. 2019), the Court of Chancery quoted Marchand v. Barnhill, 212 A.3d 805 (Del. 2019), for the rule that "to satisfy their duty of loyalty, directors must make a good faith effort to implement an oversight system and then monitor it," and added that "[t]his is especially so when a monoline company operates in a highly regulated industry."

The plaintiffs in Clovis had pled that the board ignored warning signs that a clinical trial was not following its protocol. Many healthcare growth-stage companies are monoline and highly regulated by construction, and a compliance officer who reports to the board under a standing agenda item is the oversight system that Delaware law asks directors to build.

03The Hundred-Day Plan

The plan is written for a minority position in a company that is reimbursed by payers, as many in Digital Health & Delivery, Diagnostics & Precision Medicine and Devices & Robotics are. Day 0 is the closing. Owners are roles at the company unless the row says otherwise, and the operating partner is the named owner of only three of the sixteen rows. In a minority seat, leverage comes from the board's agenda and the information right, not from running workstreams.

04The Reporting Cadence

The monthly operating package is the instrument that turns the information right into oversight. It should arrive on a fixed day after month-end, reconcile to the general ledger, and carry the metrics the KPI dictionary defines, in the same order every month. A care-delivery company reports revenue by payer, days in receivables and initial denial rate; a diagnostics company, test volume, reimbursement per test and turnaround time; a device company, installed base, utilization and the open complaint and corrective-action log; a digital health company, contracted lives and cost per engaged member.

The ROI² line, Return on Investment plus Impact, belongs inside the same dictionary rather than in a separate report. An access or quality measure the company already reports to payers is defined, sourced and owned like any financial metric.

The package should never carry identifiable patient data. Directors and observers have no need for it, and the day-30 protocol keeps it out of board portals, investor inboxes and the representative's own notes.

05Conflicts, Interlocks and Structure

Operating partners who specialize in a sector tend to sit on several boards in it, which is exactly where antitrust law draws a line. Section 8 of the Clayton Act, 15 U.S.C. 19, provides that no person shall at the same time serve as a director or officer of two corporations that are competitors, subject to capital thresholds and to de minimis exceptions measured by competitive sales: under a dollar floor, under 2 percent of either corporation's total sales, or under 4 percent of each corporation's total sales. The dollar thresholds adjust annually, and the Federal Trade Commission must publish the adjusted figures by January 31 of each year.

In October 2022 the Department of Justice announced that seven directors had resigned from the boards of five companies in response to its Section 8 concerns. The release quoted the head of the Antitrust Division that "Congress made interlocking directorates a per se violation of the antitrust laws" and that the Division was "undertaking an extensive review of interlocking directorates across the entire economy." The day-10 screen exists because a new board seat can create an interlock that did not exist the day before.

Structure is the second screen. Many care-delivery companies operate through a management services organization that contracts with a clinician-owned professional entity, and the representative usually sits on the management company's board. State law decides how far that board may reach into clinical operations. Oregon's Senate Bill 951, enacted in 2025 as Oregon Laws 2025, chapter 295, prohibits a management services organization, and certain of its shareholders, directors, officers, employees and contractors, from owning, controlling or managing a professional medical entity with which it has a management services contract. A representative who proposes changes to scheduling, staffing or clinical protocols should first see a map of which entity owns each decision.

06The Day-100 Review

The hundred days end with a review in two directions. To the company's board, the representative confirms that the value creation plan has been approved with owners and dates, that the compliance inventory and the financial arrangements register are complete, and that every open item from the billing review sits with counsel. To the investor's partners, the representative delivers the dated log of rights exercised, an assessment of the leadership team against the plan, and a recommendation on cadence for the following year: monthly involvement where the plan is behind or the compliance inventory found gaps, quarterly where the company is executing.

The review also names which rows slipped and why. Fixing owners and dates on day 0 means that, by day 100, the board can tell a company that is behind from a plan that was wrong, and act on either.

07Frequently asked questions

What does an operating partner do in the first hundred days of a minority investment?

The operating partner confirms which governance and information rights the investor holds, screens for board interlocks, and makes sure the company owns a dated plan with a named role on every workstream. In healthcare, the first substantive review is the compliance program and the register of financial arrangements with referral sources, because federal guidance expects investors who provide operational oversight to understand fraud-and-abuse law.

Is a board observer subject to the same duties as a director?

No. A board designee is a director and owes a director's fiduciary duties to the corporation and all of its stockholders, and Delaware courts have recognized the dual-fiduciary conflict that arises when a designee also serves an investing fund. An observer holds a contractual seat without a vote, and the observer's obligations, such as confidentiality, come from the agreement that grants the seat.

Why does a billing review in the first month need to involve counsel?

Under 42 U.S.C. 1320a-7k(d), an identified overpayment must be reported and returned within 60 days, or by the date any corresponding cost report is due if later, and an overpayment retained past that deadline becomes an obligation under the False Claims Act. A coding audit can therefore start a legal deadline, and engaging the reviewer through counsel lets findings be handled on that clock.

Nothing in this piece is investment, legal, tax or accounting advice, and nothing in it is an offer to sell or a solicitation of an offer to buy any security.