In 2002, I had a brilliant idea in the dental space and was ready to launch a new product in partnership with a Southeast Asia-based partner. But when I met the first investor (a friend of a friend who had made money in real estate and wanted to invest in healthcare), I faltered at the very first question on GTM. I had no idea what GTM was back then, and today, when I look back at that interaction with amusement, I realise how unprepared healthcare founders are even today when it comes to raising capital.

Raising capital in the healthcare sector isn’t just about having a groundbreaking idea. It requires a nuanced understanding of the ecosystem, including regulations, clinical validation, go-to-market (GTM) strategies, and, above all, investor expectations. Healthcare founders often underestimate the depth of diligence required for investor evaluations. Whether you’re building a diagnostics platform, a medtech device, or a digital therapeutics solution, your fundraising success hinges on more than your technology.

Let’s start with market validation. In healthcare, de-risking the business model is critical. Investors are seeking ventures that have been thoroughly tested in real-world settings. That means conducting pilot studies with hospitals, obtaining endorsements from clinicians, and ideally, achieving measurable outcomes.

One healthtech startup that piloted its AI triage tool across five major hospitals was able to reduce ER overload by 15%. That data point alone gave them an edge during their pre-Series A round. It’s a clear example of how traction isn’t about downloads—it’s about impact.

Another vital piece of the puzzle is regulatory readiness. Entities like the CDSCO, NABH tightly regulate India’s healthcare landscape, and more recently, frameworks under the National Digital Health Mission. Founders must understand where their product sits in the regulatory pathway. Is it a Class A or Class C device? Do you need clinical trials or only safety data? It helps to include a regulatory timeline in your investor deck. This demonstrates preparedness and foresight.

Listen to my podcast on the topic.

Speaking of preparedness, investors want to see healthcare ventures co-created with clinical and commercial stakeholders. A digital diabetes management platform recently stood out because it onboarded both a corporate insurer and a tertiary care hospital as co-creators during product development. This ensured the product had usability, distribution, and reimbursement pathways built in from Day 1. Investors love this kind of alignment because it shows execution maturity.

Let’s also talk about numbers. Beyond the total addressable market (TAM), founders should articulate the health and economic impact of their solution. Can your intervention reduce diagnostic delay by 30%? Can it save ₹500 per patient per episode? These numbers make the pitch real. Quantify DALYs (Disability-Adjusted Life Years), QALYs (Quality-Adjusted Life Years), or even time saved by care providers. These metrics demonstrate that your product not only generates revenue but also makes sense.

Many founders, however, stumble on the GTM strategy. A strong product without a pathway to market is a non-starter. What channels will you use? Can you partner with diagnostic chains, pharmacies, or telemedicine platforms? What’s your CAC (Customer Acquisition Cost) vs. LTV (Lifetime Value)? These fundamentals are often overlooked in early-stage pitches but are crucial in funding conversations.

Another underrated aspect is the strength of the founding team. Investors prefer a mix of clinical, tech, and business expertise. A doctor-led team with no product or go-to-market knowledge may struggle to succeed. Likewise, a purely tech team often misses regulatory nuances. Add an advisory board of respected clinicians or former regulators; this significantly boosts trust.

Now, let’s talk metrics. Investors aren’t wowed by vanity numbers like app downloads or website traffic. What they want are real retention rates (like Day 30 or Day 90 retention), revenue per user, and margins. Can you show a path to breakeven at the unit level? These are the numbers that matter.

Before you hit the road for fundraising, make sure you are investor-ready. Over the last five years, I have advised regional hospitals, dental speciality clinics, oncology chains, niche medical equipment players, and wearable tech entities on becoming market and investor-ready. Many of these organisations have successfully grown by 5X.

What made the difference was the deep sector expertise and understanding of patient needs, backed by technology and operational efficiency. This was possible because they were deeply embedded in the ecosystem, and it aligned with my experience with it from the ground up.

So, build a data room with your pitch deck, product demo, clinical data, regulatory filings, and three-year financial forecasts.

Prepare a compelling narrative: Why now? Why this problem? Why you?

When building your forecasts, present three scenarios: the base case, the stretch case, and the conservative case.

Choosing the right investor is equally critical. Sector-focused funds, such as HealthQuad, or impact investors who understand healthcare cycles, are more aligned with long-gestation models. Family offices may give you flexibility, while VCs bring structure. Ensure the investor understands the pace and potential pitfalls of scaling up in the healthcare industry.

Finally, be clear on your exit strategy. Will you be acquired by a large hospital chain, a global medtech player, or aim for a public listing? Having a well-defined vision helps investors align on outcomes.

In closing, fundraising in healthcare is part art, part science. Founders must bring together clinical credibility, business viability, and regulatory clarity. By doing this, you won’t just raise capital—you’ll build a sustainable, impactful healthcare business.