Healthcare investors are increasingly interested in financing companies focusing on specialty pharmacies, women’s health, patient experience and more, according to a study by a team of three venture capitalists at the MedCity Invest meeting in Chicago on Tuesday.
But there are areas where healthcare investors are trying to compete with it. During the panel discussion, David Kereiakes, managing partner moderator of Windham Capital Partners, asked VC team members to have controversy over the industry. What they said is:
Does every startup need to be powered by AI?
One of VNS Health New Ventures’ vice president Aman Shah noted that nearly every pitch deck he saw was AI, which he didn’t think was completely necessary.
“Does every business have to be an AI business? … When I started with a company earlier, like there were no AI companies, now 24 months, they’re like, ‘We’re AI-driven.’ I thought, “Are you really driven? And I’m not smart enough to figure out if these models are really the right ones. ” he said.
He added that companies should first focus on building a good business, and then they can leverage AI to improve the business. But you don’t have to use AI to succeed.
No more new things to build
Dipa Mehta, managing partner at Valeo Ventures, said the way the company started is changing. In the past, startups would find a problem and solve it, then build the technology and sell it to customers.
But now, “healthcare and technology are at the moment when there isn’t a lot of new things to do,” Mehta said.
“The most successful thing I’ve seen right now is creating a company with clients, not trying to create something on your own,” she said. “If you’re an entrepreneur with a really good idea in the room, that could be a really interesting starting point because I think it’s hard to start a new innovative company in the technology and healthcare sector right now.”
Value-based care is not everything
The healthcare industry is trying to move from paying for costs to value-based care. However, Raffi Boyajian, another panelist at Cigna Ventures, believes value-based care is not the “holy grail”, especially for early-stage companies.
If you start transitioning to this, you can get to the contract very, very quickly from a financial standpoint. Or what happens is that you find success, you have to raise more incremental capital and put that capital in the capital reserve. Now, all of a sudden, you’ve diluted the shareholders, management teams, employees, I’ve diluted that.
Photo: Nick Fanion, breaking the media
