Healthcare venture firms invest money in companies that develop innovative new medical technologies. Venture capital companies typically look for a fast growing company with the ability to make a substantial profit within 5 years.
Raising venture capital provides your company with money, which you use for development. Seed funding is the initial investment from a venture capital firm. Venture capital firms also provide first and second round funding for product development and expansion.
Your company is a good candidate for venture capital finding if:
1. You expect to make a substantial profit within 5 years. Healthcare venture capital firms generally want their money and profits repaid within 5 to 7 years.
2. Your product will make you a leader in the healthcare industry. Venture capital firms do not invest in minor improvements and everyday businesses. They invest in big innovative ideas.
3. The decision makers in your company have experience. The company may be young, but seasoned employees at the helm greatly increase your odds of winning venture capital funds.
Develop a bullet proof business planHealthcare venture capital firms use business plans to decide who receives money. Without a professional business plan, your company will move to the bottom of the list.
Seek healthcare venture capital if your company develops devices, not drugsPharmaceutical drugs are a high risk venture. Years of development and testing by the FDA is no guarantee that they may not pull a drug from the market at any time. Medical devices have a shorter development and approval process. They also have less risk of interactions, and lawsuits, that cut profits once the device reaches the market. This makes them an attractive choice for healthcare venture capital firms.
Choose a healthcare venture capital firm with a record of accomplishment of financing winning ideasHealthcare finance is a highly competitive business. If you win an audience with a health venture capital firm that has a strong track record of backing profitable ideas, your odds of being successful increase. In addition, they offer experienced managers to guide you through the development and approval process.
- Healthcare makes up 30% of the investments made by venture capital firms.
- Many venture capital firms will provide management and operational support, whether you want it or not. Find out the details before accepting any money.
- Consider bringing partners on board that have experience you lack. Scientists present many ideas to venture capital firms. Strong ideas do not outweigh a lack of business experience.