Why Investors Say No to Your Healthcare Startup

Founders spend a lot of time raising money. It's tough. Often, you leave with no investment and no explanation. We talked to many investors to find out why they pass on funding healthcare companies. Here's what we learned.

Your Pitch Deck Needs Work

First impressions matter. If investors struggle to read your deck, they'll likely pass on your startup. While some may push through a difficult presentation to learn about new healthcare innovations, many won't. Even those who continue reading start with a negative impression.

Common pitch deck problems

• Dense blocks of text
• Complex medical jargon without clear explanations
• Missing key information, e.g., financials, market size, competition

Your Data-room is Weak

Investors need more than a pitch deck – they want detailed insights into your operations. A well-organized data room shows professionalism and builds trust. Unfortunately, many founders treat this crucial step as an afterthought.

Instead of dumping files into a shared drive, create a structured environment with:

• Clear folder organization
• Consistent file naming
• A table of contents
• Easy access to key documents
• Regular updates

When investors have to repeatedly request basic documents, it raises red flags about your organizational skills.

Your Team Raises Questions

Solo founders face extra scrutiny in healthcare. Some investors won't fund single founders at all. Others will, but you need good answers to their concerns. Can you handle all the work? What happens if you leave? Do you have the right mix of medical and business skills? Be ready with clear answers.

For bigger teams, show how well you work together. Have you worked together as a team before? How long have you known each other? One founder impressed investors by sharing how the co-founders resolve conflict and use a defined responsibility system to work better together. These details matter.

Your Solution Lacks Differentiation

What makes your healthcare solution unique? It doesn't have to be completely new. But it needs a clear edge - maybe in how it works, who it helps, or how it saves money.

"Another innovative digital health platform" won't excite investors. You need specific, verifiable advantages over existing solutions.

While you don't need to create an entirely new category, you must offer unique:

• Features
• Approaches
• User insights
• Clinical outcomes
• Cost benefits

Back up your claims with data whenever possible.

They Don't Know You Well Enough

Fundraising runs on relationships. Smart founders stay in touch with investors and follow up well. Don't ask for money the first time you meet. Instead, help investors first - share useful information, connect them with others, or offer your expertise.

Investor outreach tips:

• Use a CRM system to track investor interactions
• Provide value before asking for investment
• Share relevant industry insights
• Make meaningful introductions
• Offer your expertise

Start building relationships long before you need funding.

Quick Tips

• Keep your pitch clear and simple
• Organize your data-room well
• Build your team thoughtfully
• Demonstrate what sets you apart
• Build relationships before asking investors for money

Raising money is hard work. It's even harder for founders in healthcare to compete with AI, e-com and consumer startups. But these steps can help improve your chances.

What else matters when raising funds for healthcare startups?
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