Founder's Story - He Built A $100M Company Without Outside Investors | Ep 424 with Raj Toleti CEO of Andor Health

Episode Date: July 24, 2026

Daniel opens by discussing the growing shortage of nurses and physicians across the United States and asks whether AI can realistically solve the problem. Raj Toleti, Chairman and CEO of Andor Health, explains that the shortage is already here and argues that automation is the only scalable path to democratizing healthcare, particularly for rural communities where clinicians are scarce. Rather than replacing doctors, Raj believes AI should eliminate administrative work, surface critical patient information, and assist clinicians so they can spend more time delivering care. The conversation then explores Raj’s path from autonomous vehicle research and Microsoft into healthcare entrepreneurship, his family of physicians, building multiple healthcare companies, profitable exits, employee ownership, creating millionaires inside his businesses, mentoring young entrepreneurs, and why he continues building despite already achieving financial success.Key Discussion Points Raj says the healthcare staffing crisis is not a future problem—it already exists today, with more nurses leaving the profession than entering it and ongoing shortages of specialists across the country. He explains that AI should not replace clinicians but instead automate administrative work, retrieve patient records, summarize information, assist with documentation, and prepare physicians before they begin patient interactions. Raj shares that Andor Health's AI is already reducing thousands of nursing hours while extending healthcare access into remote communities where clinicians are difficult to reach. He believes trust in AI comes from knowing when to introduce a human into the workflow, describing a “human-in-the-loop” approach rather than fully autonomous healthcare. Raj discusses how AI can identify language barriers, accessibility needs, documentation requirements, and clinical reasoning before a physician even joins the patient interaction. He reflects on his engineering background, including autonomous vehicle research in the early 1990s, before deciding that healthcare automation would allow him to impact millions of people rather than treating dozens of patients individually. Raj shares that he comes from a family with 33 clinicians, which made healthcare innovation feel like a natural calling despite choosing engineering over medicine. He remembers joining Microsoft when his father had never even heard of the company, later leaving to pursue entrepreneurship despite the uncertainty. Raj explains that one of his personal metrics is the number of jobs he creates, seeing entrepreneurship as a way to provide opportunity and improve lives far beyond his own success. He admits that retirement lasted only about two months after selling his first company before realizing that building businesses was his true purpose. Raj says every company he builds is designed to be profitable, financially resilient, and capable of delivering measurable customer outcomes rather than relying on outside funding alone. He argues that entrepreneurs should prepare their companies for an exit every day—not because they plan to sell, but because strong financials, profitability, and customer value naturally create acquisition opportunities. Raj shares that he has created numerous employee millionaires through stock option plans and believes educating employees about equity is just as important as granting it. He emphasizes that stock ownership changes lives, but many employees fail to understand taxation, exercising options, and long-term wealth creation strategies. Raj also discusses his internship program, explaining that many of his youngest interns eventually became senior executives and successful entrepreneurs after receiving early opportunities and mentorship. Contrary to common stereotypes, Raj believes today's younger generation is highly motivated, provided they receive mentorship, confidence, and meaningful opportunities early in their careers.Takeaways AI's greatest opportunity in healthcare is augmenting clinicians—not replacing them—by automating repetitive work while keeping humans responsible for patient care. Profitable companies with strong customer outcomes are positioned to survive market cycles and create stronger long-term acquisition opportunities than businesses focused only on raising capital. Employee ownership can create extraordinary wealth, but founders have a responsibility to educate employees about how equity actually works. Mentorship compounds over decades. Raj's investment in interns and young professionals has produced executives, founders, and multiple employee millionaires. Legacy is not measured by company valuations or awards—it is measured by the number of lives, careers, and patients positively impacted over time. Closing Thoughts Raj Toleti has spent his career building technology that scales human care rather than replacing it. From autonomous systems research to multiple healthcare exits and Andor Health's AI-powered clinical platform, his focus has remained remarkably consistent: use technology to help clinicians do what only humans can do best. This episode captures a founder who believes entrepreneurship is ultimately about outcomes—not just financial returns, but healthier patients, stronger companies, empowered employees, and lives changed at scale. Today's Sponsors:  Start with Upwork, the one-stop platform to find, hire, and pay expert freelancers across marketing, editing, branding, development, operations, and more. Visit https://www.Upwork.com today to post your job for free and get matched with top talent ready to help your business grow. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

I have created quite a few millionaires. The last two companies I've bootstrapped. I didn't even raise any dollar from outside investors. And I sold the strategies. 80% gross margins, 40% deep bid die. He started in rocket science. He comes from a family of 33 doctors. He's built and sold health tech companies for hundreds of millions of dollars without

ever taking a dollar of outside money. This is Raj Toletti, chairman and CEO of Andor health. Today, we're the only AI Native clinical services company in the country that is highly profitable with over $100 million in ARR. Do you think that's because part of the health care system is broken? There's a lot to unpack there in that question. But I think... I was just reading a stat that was saying there's going to be a massive nursing and doctor shortage in the U.S. All these people are retiring. On top of that, you have baby boomer generation. They're need. more health care. I was reading essentially they were saying there could be a massive

crisis. Do you think the AI can solve this? Yeah, I mean, first of all, thank you for having me on your show. I think there is not, there will be. There is a shortage today. There is a significant shortage. The number of nurses that are exiting the system are more than number of nurses that are graduating and entering the system. And clinicians and specialists especially, there's just a dire shortage of those resources, especially in the rural communities in America. So if you think about how do you democratize access to care across the country?

and when people are not available in those remote areas and when there is shortage, I think the only way you can actually solve of how you democratize access to care and improve the outcomes is through automation. And virtually being able to meet the patients where they are and then being able to actually bring technology that makes the life, of these clinicians so much more easier so that they're available. So yes, the short answer is we today have seen AI directly actually cut down thousands of nursing hours.

We've seen AI through our technology, reach the remotest parts of United States and in some of globally where my company operates. and we've actually changed the outcome. So if the AI technology coupled with the clinical service is able to own that outcome for that patient, then you truly have changed the way people live. So, yes, I know it's a long-winded answer, but I do believe that that's how it's going to play out.

So I've talked to other people that seem that they're going to use AI and robotics to replace the doctor, maybe replace the nurse. You take a different approach. I do. And I think there's always a human in the loop, right? I think there's a lot of work around administrative tasks associated with care delivery that can be automated through AI. So if I'm a clinician and you're the patient, the minute I come on with this video call, my AI, assistant should be able to give me your medical records. They should be able to serve up the content for me. They should be able to do a lot of assessments on you.

And by the time I come as a clinician, I'm actually reviewing. And maybe I'm using neural observation through the camera. I'm reading certain symptoms. And maybe the AI is saying, you know what, this patient cannot speak English. And I might have to pull in somebody that speaks Spanish or another AI agent that's able to translate. This patient is not able to hear. Maybe we have to turn on close captioning. So all of those surround tasks that are needed in the process of care delivery, AI is definitely taking those tasks and not only doing it at scale, but doing it better in some cases.

So I think there's a trust factor with using like LLM's chatGBT, for example, to give you a diagnosis. And I'm not saying that's the right way or that's the way anyone should do it. But from what I hear, what I read, what I see is a lot of people trust asking an LLM, maybe even more so than asking a clinician or even going to a doctor to try and get a diagnosis. Do you think that's because part of the health care system is broken? I mean, there's a lot to unpack there in that question. But I think it's easier. It's easy access to ask a question of chat, GPT, or clot, or whatever that AI aperture happens to be. But to get access to a real clinician, you know, it's not that easy.

So I think that should not be understood as the value that you're getting through an AI, you know, response to somebody that has, you know, a human in the loop. Now, there are certain use cases. So we as a company, you know, our AI doc and our AI reasoning is actually right now working at full scale. We see thousands of patients with AI reasoning. But we know responsibly when to insert. the human in the loop, right? So that's about it. So we actually are doing neural observation, we're doing documentation, we're doing, you know,

reasoning around you and your medical record, but then we then pivot to a human in the loop. And that's a lot of work and trust that you need to actually build in the platform. So what happens when you have silo solution, and say, I have an AI doc. But the AI doc doesn't have a digital front door to take your payment, to understand your insurance.

So there's a lot of, so when you stitch the whole experience together, then I think the trust increases where the human in the loop is coming and helping. Let's go back into your history. You were essentially a rocket scientist, right? Like we always joke, it's not rocket science. but you essentially were working on AI and autonomy back in the 90s. At some point when you were doing this, did you say, I want to divert all of my attention to healthcare?

Well, I mean, it's a great question. It's like, you know, I'm an engineer at heart. I'm still an engineer. And my career started off in the mechanical aerospace, engineering space. I worked on autonomous vehicle research in 1992. There was a lot of work that, you know, we worked with the FAA on the V22 Osprey and, you know, multiple autonomous vehicle with expert systems and AI from NASA. Now, the pivot happened to me is because my family is full of clinicians. I have parents who are physicians, my grandparents who are physicians, my mom has eight siblings at all doctors, their spouses are doctors, their kids are doctors.

So the list goes on and on. I have 33 clinicians in my family. And my calling has always been, how can I see not 20 or 30 patients a day? How can I change lives for thousands, if not millions, every day? So I think automation in healthcare was a calling for me. And just given that I've been around healthcare, all my childhood,

and even now all my adulthood, that's just my life. I mean, that's my space. And I've started four companies. I called four and a half because I have two companies and our ventures. But, you know, nothing gives me more joy than just building technology and automating so that I can truly change the way patients access care. you might have the smartest family I've ever heard about. I mean,

30, over 30 clinicians, when you told your parents, I'm going to be an engineer, which is obviously something that is a great, that's a great field to be in, too, but were they sad that you were not also going to be a doctor? Well,

my dad said he was an emergency medicine dog, but he was also, like he was a media personality, but he said, hey, listen, it's a, it's a, it's a,

it's a disaster for an emergency. emergency physician doctor every day for me because I have multiple jobs. It's a disaster once in a while. But if you want to be an engineer, that's the best because, you know, you can award this whole realm of, you know, being a clinician. No, I actually know, I think they encouraged me a lot. And I think I was very fortunate that I could follow my heart and actually follow a career that I truly love. I have a lot of friends that were also born in India, and they always tell me it took many years before their families were okay with them being in business and not having a typical job. Did your family think, why quit Microsoft in the 90s?

Why would you leave something steady paycheck and become a founder? Well, I mean, I've got a couple of versions of this. But the short answer is yes. If you're from an Indian family, yes, you can be an engineer, a doctor. or whatever. But when I joined Microsoft, my dad didn't even know what Microsoft was. It's like, you became a mechanical aerospace. What are you doing at micro? What is this company? So, but before you passed away, you realized I didn't screw up. But, but it's, but, you know, I also have the fortune of like, actually my parents were always building businesses, even though they were

clinician. So I grew up around businesses. So in my life, there was always a metric of how many jobs I create. So that's something that I personally kind of, like, that's one of my not stars to like say, okay, you know, before I hang up my hat, I'm going to like create so many jobs and provide for whatever I can. So and that's something that my parents actually fully supported me on. That's an amazing legacy, right? Like how many jobs can you create, which impacts so many people. They then impact other people, their families, and it goes on and on. And you sold companies for hundreds of millions of dollars now. What was the sacrifice that you had to make to get there? You know, I mean, do you ask any entrepreneur, they'll tell you,

you know, most of the sacrifices are personal in nature. And, you know, the time you give up not spending with your family, your kids. And I'm very fortunate that I have three wonderful children and they all turned out okay, it's probably because of my wife and not me. And then you help a lot of people on the way. And like my dad told me, when you help someone, don't expect anything back. So when you go through this entrepreneurial journey and you change people's lives, you know, the sacrifices, you know, are really relationships and personal.

But I think what you actually are able to do at the end of the day, I believe outweighs, you know, a lot of those sacrifices. I think if I sold a company for $20 million, I would probably just retire. Have you thought about that? I tried for like, I mean, I didn't, I never played golf before. So when I sold my first company, I tried to retire for like two months. my wife said I think it's like very unhealthy for our relationship. So I think you should just go do something.

So I mean, yes, I understand, but I think having a purpose. And I think building companies in health tech, going back to the same health systems, selling them a different thing every four or five years, and still having that credibility, like I tell my kids, you're only as good as what you did last. And I think that, and I don't know, I've not met many people that are in my space

that are gluttons for punishment like me to go actually build another health tech automation company trying to help patients again. And so for me, it's just a calling. I think I wouldn't know what else to do if I retire. So I'll keep doing this as long as I can. I imagine people that got stock in Microsoft in the 90s probably could have retired just on that alone. That must be epic.

I couldn't imagine getting stock in Microsoft or Google from day one. When you think about legacy, going back to that piece, I heard recently that legacy is everything, not just one specific thing you do. All of us, you know, we all have a purpose, you know, and you're a great storyteller. I mean, you can actually really bring out like some of the most salient aspects of any entrepreneur that you talk to. I mean, that's just a skill that you have. And I think the legacy for you is not just the stories that we tell. But the knowledge that we can actually impart to all your viewers.

And I think it's just a change reaction. So for me, legacy is fundamentally saying that at the end of the day, how many people's lives have you changed? And in that one statement, there's a lot to unpack. And so the only way you can change is not just because, you've given them a job, not just because you've educated them, but you truly were impactful by something that you did. And I think to me, that's, to me, that's my North Star is like, okay, when I look back and say, my legacy is like, you know, I've touched, you know, 10,000

people or have changed 10,000 lives or whatever the number happens to be. But that's, I don't know if I answered your question because it's, it's very philosophical. Yeah, do you have a number where you will look back and say, I am fulfilled, or even a number that you know at the moment, or whatever that number is, the metric, the KPI, however you want to say it, where you would say, okay, I'm fulfilled. You know, if I meet my number, the number is wrong. So, I mean, that means I have to do more.

So I don't, I'll keep doing this till, like, you know, you know, to like him. Yeah. You said you're a glutton for punishment. So that must be the reason. You just love to be an entrepreneur. What is the moment during your entrepreneurial journey

where you were almost on the verge of saying, I'm just going to go back to working at Microsoft? Oh, boy. Oh, never. But I mean, not Microsoft. I'm just saying, it doesn't mean Microsoft. I'm just using that as like a hypothetical, like,

Basically, were you just ready to throw it in? I'm not saying. They've given me so much. I kind of, I've built companies and then large public companies have acquired my companies. So I do actually go work for a large company to make sure that whatever we've innovated, whatever we bought to market, it's still my baby. and when I give my baby up to somebody else, I mean, we are there to make sure that we shepherd that product through that process.

I mean, I sold my second company to NCR. My boss there at NCR is still a great friend, a great reference, you know. So I kind of switch between, you know, the entrepreneurial frequency, and then I come and I work at a large corporation. It's a different frequency. It's a different mindset. But then, you know, at the end of the day, I still, you know, I will still have to go build something else because that's what I want to do

and that's what I can do. So I don't think so I can actually work at a large corporation for a long periods of time. I don't know if I answered your question. No, I mean, I get it. Like sometimes I think about thrown in the towel, but I'm like, could I be an employee again? I'm not really sure. I don't know.

It's one thing if you sell, like you're saying, sell the company, then you now are create. But just to go and it would also be funny to create a resume and have to do an interview process. I think that would actually be pretty funny. What do you think about the secret sauce to the exit? Because you've done it a few times, a few hundred million in.

Is there something that you do or you ensure that the companies that you're creating have, So at some point, you know somebody will want to buy it. Yeah, I think it's actually a great question. I think most entrepreneurs will tell you that I've actually exited that there's no right timing. I think you always have to be preparing your company so that there is an exit. So you're always, you know, every day you're preparing your company so that it can go to the next level. I believe, so all my companies that I've built in the tech space, including this company and our health and Synergy Health,

I fundamentally believe that no matter how cutting edge that innovation is, you have to build a company that provides sustainable value to your customers where they actually pay for it. And my companies were all profitable. The last two companies, I've bootstrapped. I didn't even raise any dollar from outside investors, and I sold the strategics, 80% gross margins, 40% EBITDA, very strong financials. So it's fundamental in my thought process,

because not just to my shareholders and to my employees, but to my customers, that there is never a question whether my company will be around. In my space, I'm profitable. In the AI space, there's a lot of, of companies that are raising hundreds of millions of dollars. My revenues are much more. And today, we are the only AI Native clinical services company in the country that is highly profitable with over $100 million in AI. So what I fundamentally believe and that I basically, anybody that

works with me or for me, it's very, very important that we have very strong financials and a return on investment for my customers and outcomes. So I don't just sell a software and throw it over the wall. I basically say, listen, I'm going to reduce your readmissions by 40%. So I know this is also probably a long-winned answer, but I think this is why you can be assured that your exit is going to be right. And it can weather market changes. So I'm in a position where I don't have to raise money for my company. I'm profitable.

So we are able to actually think more strategically and position the company for the right exit. So that's kind of like a long-minute answer, but I can break that down even further if you want me to. It's super important to have a profitable company, but then a company that can weather the storms, which makes sense if somebody's going to buy your company, they want to know there's some sort longevity in it. And I'm wondering your thoughts.

We recently had another guest on, he's the founder of Equity B, and he was telling me this stat that 50 to 70% of people don't exercise their options at the company they're at. And it could be a variety of reasons. Maybe they don't have enough money to do so. or, you know, I'm sure there's many other things. From your perspective, having all these tech, health tech, AI companies, I imagine there's so much room for people to create massive wealth right now, not even as the founder, just working at the company.

What has been your experience with this? Yeah, so thank you for that question. I think I have created quite a few millionaires out of my companies. I mean, like, you know, people started their own businesses. that I've coached, mentored, and this is like, you know, very large sums of money, like, you know, equal to what I was able to drive. Now, when you say 50 to 70% of the, so we always had an employee stock option pool, so I always kept like 20% of my company for employees,

and I created a lot of wealth over the years for employees. exercising a stock stat, like 50 to 70% and yes, I mean, he's right. But there's two sides to the coin. So if you exercise your stock and you hold it, then you pay capital gains. When we sell the company, so if I sell the company $10 a share

instead of paying like whatever, $4 in taxes, you pay $25, like $2.50. So there's that part of exercising their shares and folding them for capital gains. And then what we do is basically we give you, let's say I give you 100 shares and you vest over four years, if you're with me for four years.

And that's a standard stock option plan with the vesting period. And once you west that stock and when we sell, whatever your strike price is, whether it's a dollar and now I sell it for $10, you're going to realize the $9 gain. whether you exercise it or not with me. Okay?

So we still, but the, what you pay on taxes is different. If you exercise, typically, I'll hold them for a year, you pay less. But if you don't, then, you know, you could be paying more, depending upon the type of stock, the class of stock. But I do agree that a lot of people just don't exercise. They don't understand, like, you know, what it means. And we try to educate our employees. we try to tell them like, hey, this is the best way for your financial planning.

You see that we're growing leaps and bounds. And this stock that you have came to you at a dollar. It could be like 10 bucks or 20 bucks or whatever it is right now. So, yeah, it's interesting that a lot of people just don't realize that. Well, I've changed my perspective. I can work for somebody if they give me good stock options, maybe some equity. I changed my perspective.

Okay. Okay. I could do that. I could do that. I mean, I know a lot of people that were working out like open AI. We'll see what, with Anthropic,

SpaceX. I mean, it's kind of wild. The wealth that is now being generated as an employee. Like that is, and people in their like 20s or 30s. I mean, it's amazing.

You won Entrepreneur of the Year. Did that mean, lot to you or was it just another award? No, I, you know, like all of us, we like recognition and I think an entrepreneur being recognized as an entrepreneur by peer entrepreneurs is always cool. And actually I won it twice in the state of Florida. I didn't, I never thought I've been it the second time. I mean, like I already wanted in 2018. I said, why would they give to me? why would they give me another award in the next company?

And I guess I didn't find anybody better. But I do really cherish those awards. Let me know when you have open enrollment of internship, because I would like to apply to be an intern. I could be an intern, and then maybe I could be head of something, something. And by the time I'm 29 years old, I'll be up there. Raj, this has been great.

Raj, this has been great. of Andor Health. Thank you for joining us today.