Running the Raise — Pipeline, Process, and Health Tech Pitfalls

Transcript

Welcome to this course on fundraising for health tech startups. If you're building in health tech and getting ready to raise — or even thinking about it — this is going to walk you through the landscape, the playbook, and the mistakes that kill deals before they start. Let's set the stage. Health tech is one of the most capital-intensive verticals in startup land. In 2025, digital health funding hit $10.1 billion globally — down from the pandemic peak of $29 billion in 2021, but stabilizing. The correction is over. Smart money is back, but it's more selective than ever. Here's what changed. During the boom, investors funded anything with "health" and "AI" in the pitch deck. Remote patient monitoring, telehealth platforms, digital therapeutics — checks were flying. Then came the reckoning. Companies like Pear Therapeutics went bankrupt. Babylon Health collapsed. Olive AI shut down after raising over $900 million. Investors got burned, and they recalibrated hard. What survived — and what's getting funded now — falls into a few clear buckets. First, AI-powered diagnostics and clinical decision support. Think companies like Viz.ai, which uses AI to detect strokes from CT scans and route patients to the right specialist in minutes. They raised $100 million because they could show a direct, measurable impact on patient outcomes and hospital revenue. Second, infrastructure plays. The unsexy but essential middleware that makes health systems actually work — interoperability, data pipelines, compliance automation. Companies like Particle Health and Datavant are in this category. Investors love these because they have clear enterprise buyers and sticky contracts. Third, AI-native drug discovery and biotech. Companies like Recursion Pharmaceuticals and Insilico Medicine are compressing drug discovery timelines from years to months. This category pulls both traditional biotech investors and tech-first VCs. Fourth — and this is the emerging category — proactive health and behavioral change. Think wellness that actually works. AI coaching, personalized nutrition, mental health tools that go beyond therapy chatbots. This is where the market is heading, and it's where early-stage founders have the most room to differentiate. Now here's the critical thing to understand about health tech fundraising specifically. Your investor universe is split. You have traditional healthcare VCs — firms like Andreessen Horowitz's bio fund, General Catalyst's health team, Khosla Ventures, and dedicated health funds like Oak HC/FT and 7wireVentures. Then you have generalist tech VCs who will invest in health tech if the product looks like a tech company that happens to be in healthcare. The pitch is fundamentally different for each. Healthcare VCs want clinical evidence, regulatory strategy, and reimbursement pathways. Generalist VCs want growth metrics, market size, and product-led growth loops. The best health tech companies learn to speak both languages. In the next lecture, we'll get into exactly how to build a fundraising narrative that works — the story structure that gets health tech founders from first meeting to term sheet.