Ever wonder what actually happens after you walk out of a pitch meeting? Here’s a hint: the real decision-making happens after you leave the room.
Digital health VCs are a specific breed. They’re not just asking, “Is this exciting?” They’re weighing risk like clinicians, evaluating business models like payers, and checking traction like SaaS pros. The decision to invest—or pass—is rarely based on one factor alone. It’s the sum of a dozen mental checkboxes and a few gut calls.
Let’s go behind the curtain.
1. The First Filter: Is It in Our Strike Zone?
Before anything else, VCs ask: Do we even invest in this kind of company?
- Sector (is it healthtech, not medtech?)
- Stage (pre-seed vs Series A?)
- Geography (U.S. only? Europe? Global?)
If you’re outside the fund’s scope, it’s game over before it begins.
2. The Second Filter: Is the Market Real—and Reachable?
A massive TAM looks nice on a slide, but VCs want to know:
- Who’s your first paying customer?
- Is the wedge realistic?
- Can this scale in 5–7 years?
If the beachhead market is vague or the go-to-market sounds naive, expect a quick pass.
3. Founders: Are They Backable?
VCs talk about this behind closed doors:
- Do they know the space?
- Do they take feedback well?
- Would I want to work with them for 10 years?
Sometimes, it’s just a vibe check. But it’s a powerful one.
4. Product: Is It a Vitamin or a Painkiller?
The best digital health startups solve real pain—regulatory, operational, clinical, or cost-related.
VCs ask:
- Is this a need-to-have or nice-to-have?
- Is this replacing something broken, or inventing something new?
- Can we validate usage or demand already?
5. Evidence & Traction: What Signals Exist?
Some traction beats no traction. Investors want to see:
- Early pilots or LOIs
- Partnerships with clinics, payers, or systems
- Usage data or retention signals
Even better: someone influential in healthcare is already taking a bet on you.
6. Regulatory & Legal Reality Check
A huge unforced error: glossing over HIPAA, FDA, or GDPR.
VCs ask:
- Do they understand what applies?
- Are they flying blind or building smart?
- Are they setting themselves up for lawsuits or credibility?
This ties directly into your compliance strategy.
7. Moat: Can This Be Duplicated Easily?
Digital health is a crowded space. Your defensibility matters.
- Proprietary data?
- Deep integrations?
- Clinical outcomes?
- Brand or trust moat?
If someone with $10M can copy you in a weekend, you’re toast.
8. Unit Economics: Will This Ever Make Money?
Yes, even pre-revenue companies get poked here.
- CAC vs LTV
- Who’s paying and how fast?
- Is the sales cycle realistic?
If the numbers are hand-wavy or the logic doesn’t hold up, trust fades.
9. Internal VC Politics: The Invisible Hand
Even if your pitch was great, VCs often have:
- Competing deals in pipeline
- Portfolio conflicts
- LP pressure or thesis shifts
Sometimes you’re great—but they can’t move.
10. The Deciding Moments
The last mile usually happens in a partner meeting.
One champion must:
- Sell your deal internally
- Defend it under fire
- Make the case that this is the bet to take
You don’t pitch that room. Your champion does.
That’s why clarity, credibility, and coachability in your pitch matter more than you think. You’re not just convincing one VC—you’re enabling them to convince 5 others.
Final Word: Make Their Job Easy
If you want funding, don’t just pitch hard—pitch smart. Know what VCs look for, understand how they decide, and build your materials to remove friction.
Want to dive deeper? Read our:
- Top Pitch Mistakes Digital Health Founders Make
- What VCs Look For in Startups
- Ultimate Guide to Raising Venture Capital
He has invested in startups including American Well, Neuronation, Mimi, and most notably mySugr – which was recently acquired by Roche. Min-Sung is also a contributing writer for mediums including TechCrunch and Tech.EU and studied Business Economics at Witten/Herdecke, Harvard, St.Gallen, and in Seoul.