Perspectives and Insights
Why Investors Need to Do More Rigorous Medical Diligence as a Core Part of any Healthtech Investment
Over $50 billion has been invested in health tech in the last ten years, but with very few successful exits. Clearly, most medical diligence that has been done to date has not been rigorous enough. For the most part, it has failed to separate those companies who are creating a clinically and commercially viable health product from those who are not. And it has failed to detect the ones making the egregious missteps we are seeing in the headlines.
The Formula for Widespread Adoption of Health Products that Every Investor and Health Tech Entrepreneur Needs to Know.
Building a health product or service that will gain widespread adoption requires a long term plan and thoughtful orchestration between your Medical Affairs and Commercial teams. For the formula we outline below, it’s important to note that each step of strategy and execution are intertwined over time as milestones are achieved.
Despite healthtech being one of the fastest growing industries with over $50 Billion being spent since 2011, there have been relatively few success stories. Most venture investors expect an exit within 7-10 years yet it can take between 10-15 years to gain widespread adoption and reimbursement of a health product. Many companies have and will run out of money before they become profitable.