HealthTech Capital
5 Mistakes AI & Digital Health Startups Make When Raising Capital
Raising capital for an AI or digital health startup isn’t just about having a great idea, it’s about proving you can execute in a complex, regulated industry. Yet, I see founders make the same critical mistakes that cost them funding.
Here are 5 of the most common—and how to avoid them.
Weak Clinical Validation
AI in healthcare is only as good as its real-world impact.
Investors want to see evidence-backed results and not just a promising algorithm. Startups that lack clinical trials, peer-reviewed studies, or pilot results struggle to gain investor confidence.
Fix: Get early clinical validation through pilots with hospitals, payers, or pharma. Even small-scale studies and pilots show traction!Unclear Revenue Model
“If we build it, they will pay” is not a business strategy.
Many AI & healthtech startups focus too much on tech and fail to define who actually pays: hospitals, insurers, pharma, employers?
Fix: Be clear about reimbursement pathways, regulatory approvals, and revenue streams early on. Investors need to see a path to monetization.No Regulatory Strategy
AI in healthcare moves at the speed of regulation.
Even game-changing tech won’t get adopted without compliance. Investors look for startups that understand FDA approval, HIPAA, MDR, CE marking, and payer regulations.
Fix: Work with regulatory experts early and integrate compliance into your product roadmap.Misaligned Investor Fit
Not all capital is smart capital.
Many founders waste time pitching to investors who don’t fund healthcare or AI. Others bring on misaligned VCs who push for unrealistic timelines or exits.
Fix: Research investors who specialize in digital health, AI, and regulated industries. Focus on those with relevant portfolio companies and strategic networks.Pitching Too Late or Too Early
Timing is everything in fundraising.
Too early? You’re pitching an idea with no traction.
Too late? You’re running out of cash and desperate for funding.
Fix: Start building investor relationships before you need money. Even if you’re not raising now, networking with VCs and industry leaders will set you up for success.
Need help refining your pitch for healthtech investors?
I coach founders across digital health, AI, and deep tech.