Leveraging New U.S. Healthcare Policies:
How can MedTech startups find the right investors?

By Daniele Viappiani

With a new executive order to leave the World Health Organization, the Make America Healthy Again (MAHA) movement is driving new policy and promises for faster time to market for product innovation. MedTech start-ups are keen to capitalize on the opportunity, yet funding to push product through early product phases – concept and design through clinical studies and post-market surveillance – can be complex. Daniele Viappiani of GC1 Ventures offers strategies for MedTech start-ups to find the right investors.

MTI Viewpoints

Insights shared by industry relative to healthcare and the advancement of medical technology.

 


Daniele Viappiani is a venture capital investor at GC1 Ventures


The U.S. health tech industry is expected to enter a period of change marked by the intersection of regulatory revision and policy shifts, under the banner of the “Make America Healthy Again” (MAHA) movement. This shift in policy is expected to create both opportunities and challenges for the MedTech sector. In particular, deregulation is poised to accelerate the time to market for many health technology innovations, which could fuel a wave of MedTech start-ups eager to take advantage of a changing landscape.

However, while this deregulation promises faster pathways to market, MedTech start-ups must still contend with the complexities of funding, building strategic networks, and navigating a competitive investment ecosystem. One of the most pressing challenges for early-stage MedTech companies lies in securing the capital required to push products from the drawing board through clinical studies and onto the market. This process can be incredibly resource-intensive, making the quest for the right investors all the more critical. Fortunately, there are several strategies that MedTech start-ups can employ to secure funding and position themselves for long-term success.

New Opportunities for Start-ups?

The new administration has promised a reduction in bureaucracy and red tape without compromising on patient safety, which could mean an even more streamlined process for new health technologies not submitting via the 510K route which is already very rapid, but depends on “substantial equivalence” with a device already on the market. From a MedTech start-up’s perspective, this offers a tantalizing prospect of faster time to market and the opportunity to scale.

The removal of some regulatory barriers could also foster an environment in which disruptive technologies, such as artificial intelligence (AI) in healthcare, personalized medicine, and digital health devices. Start-ups operating in these domains may find themselves at the forefront of an emerging health tech boom as the pace of innovation accelerates.

This, however, is not to say that the landscape will be free from challenges. While deregulation may lead to a more agile environment for product development, MedTech start-ups will still face the fundamental hurdle of funding. Start-up founders will need to deploy a number of strategies to ensure they stand out from the crows in an increasingly competitive market for capital.

Strategies for Securing Investment

One often underused, yet highly effective way for MedTech entrepreneurs to find investors is by leveraging the founder network. Founders who have successfully navigated the start-up journey are often in a strong position to offer guidance, connections, and introductions to potential investors. These individuals have the experience and credibility that can open doors, making it easier for start-up founders to access the capital they need.

In practice, leveraging the founder network means seeking out advice and mentorship from experienced entrepreneurs who have already raised funds for health tech companies. By forming relationships with these individuals, founders can gain a deeper understanding of what investors are looking for and how to craft a compelling pitch. Moreover, founders who have successfully secured funding themselves often have valuable insights into the kinds of investors who are interested in the MedTech space and who might be willing to take a chance on emerging technologies.

MedTech start-ups could consider going “hyper-local” in their search for investors. This means targeting investors who are familiar with the local healthcare landscape and who may have an inherent interest in supporting innovations that could benefit their community. By focusing on local investors, MedTech start-ups can often find a more receptive audience. Hyper-local investment strategies could also offer start-ups a more personal, hands-on approach to raising capital, which can foster deeper relationships and more sustained support.

While focusing on local investors is one option, international investors may be a better fit for some MedTech startups that need not only capital but also valuable expertise, networks, and market knowledge. MedTech start-ups that are considering expanding beyond the U.S. should evaluate the advantages of attracting overseas investment, particularly from regions where there is growing interest in health innovation, such as the Middle East or Asia.

However, it’s important for start-ups to carefully evaluate the pros and cons of international funding. While it may provide access to new markets and resources, foreign investment can also introduce additional complexities, including regulatory hurdles and cultural differences. Start-ups must weigh these factors carefully and seek investors who are familiar with the specific challenges of the health tech sector.

Another critical point is ensuring that they ask the right questions of their investors. Before accepting funding, founders should make sure that their investors align with the company’s values and goals. For example, in the context of a MedTech start-up, founders should ensure that their investors understand the unique challenges and regulatory hurdles associated with developing healthcare technologies. Additionally, investors should have a long-term view of the company’s potential, as MedTech innovations often take time to achieve widespread adoption. Having investors who are patient and aligned with the start-up’s vision can make all the difference in overcoming the barriers to entry in the highly competitive MedTech space.

Focused on Forging the Right Partnerships

As the U.S. health tech industry undergoes transformation in response to new policy initiatives, MedTech start-ups must be strategic in securing the capital needed to innovate and succeed. Deregulation may help unlock opportunities for faster development and market entry, but the complexities of fundraising remain a significant challenge. By leveraging founder networks, considering hyper-local investment opportunities, and asking the right questions of potential investors, start-ups can navigate this changing landscape and position themselves for long-term success in the health tech sector. As the industry evolves, MedTech entrepreneurs must remain focused on innovation while building strong partnerships that can support their growth in an increasingly competitive environment.