Although healthcare organizations and venture capital firms may have shifted their priorities during the Covid-19 (novel coronavirus) pandemic, digital health startups are actually making waves and breaking venture capital records by raising $6.3 billion in the first half of 2020. There are a couple of things you need to consider when it comes to choosing a digital health venture capital firm partner and they are as follows: https://www.tycoonstory.com/health/tips-on-finding-the-right-digital-health-venture-capital-firm-partner/

1. Tips on Finding the Right Digital Health
Venture Capital Firm Partner
Although healthcare organizations and venture capital firms may have shifted
their priorities during the Covid-19 (novel coronavirus) pandemic, digital health
startups are actually making waves and breaking venture capital records by
raising $6.3billion in the firsthalf of 2020.With so many newcomersin the field,
it is more important than ever to look for a digital health venture capital
firm partner with the right relationships and expertise.
There are a couple of things you need to consider when it comes to choosing a
digital health venture capital firm partner and they are as follows:
Grace Under Pressure
A lot of people are rushing to invest in health tech companies nowadays. Most
of them are firsttimers, as companies are quicklyrethinking their consumerand
enterprise technology priorities thanks to changing needs and financial
constraints. As a result, digital health is a booming market nowadays, but this
won’t always be the case.
As a startup, you need a venture capital partner that can remain calm in a bull
or bear market. Grace under pressure, if you may. It is important, now more
than ever, for investors to rely on the data at their disposal—from their own
research and also fromtheir networks—to determine market trends and make
the right decisions. Nowadays,“going with your gut” is considered a risky move.

2. Foresight
Most startups venture into the digital health space by setting up direct-to-
consumer healthcare solutions, in the same way that they would set up DTC
products for other verticals. Although this can and may work for somestartups,
experienced venturepartnerscan help foundersdetermine—and eventually sell
to—the right enterprise customers.
Government agencies, unions, employers, brokers, providers and payers all
offer startups the chanceto sell to an established organization with a dedicated
user base. But, there’s a subtle distinction for each pitch, whether it’s ROI
expectations or the threshold for financial and clinical risks. A digital health
venture capital firm partner understands these nuances and guide startups to
the customers whose needs match perfectly with their vision.
Stability
Digital health startups should look for stability in their digital health venture
partners. There are two types of stability and they are as follows:
Balanced Team
Investment bankers are not the only ones who should be providing advice to
digital health startups. A digital health venture capital firm partner armed with
a team of scientists, data analysts, and operations specialists can provide some
form of assistance, introduce founders to a wider professional network, and
evaluate opportunitiesfrommorethan one angle. Inaddition, havinga balanced
team leaves less room for it to be siloed—partners work and make conscious
decisions together.
Balanced Portfolio
Healthcare is often considered not as a single trillion-dollar market but rather
severalbillion-dollar markets. If an investmentfirm puts its focus on only oneof
those markets, it might end up suffering from tunnel vision. A firm that invests
across a variety of these markets—such as medical devices, care management,
consumer engagement, and also core ITinfrastructure—has a balanced outlook

3. of what’shappeningwithin thehealthcare spaceand wheremajoropportunities
for innovation can be found.
Partnership
A few digital health venturecapital firmshavea hands-offapproachtoinvesting.
However, a good and reliable venture partner is simply that—a partner in
creating connections, providing expertise, and building a pipeline, all with the
vision pointing to long-term growth.
Partnerships help founders fill in the gaps. Plenty of startups have great
technology but need help in carrying out their vision. This often means
improving the senior management team, enforcing a governance system,
organizing a financial or regulatory audit, electing an investor to the Board of
Directors—or all of the above. Building a successfulbusiness from scratch isn’t
a walk on the park. It takes a lot of time and effort, but this level of partnership
gives way for a startup to thrive. It also provides a guarantee that a venture
partner won’t sell out when things get tough.
Results
Venture capital firms helping a startup raise capital in its early stages is one
thing, but the real test of success comes from later funding rounds and exits—
this can only result from having a long-standing partnership.
Below are some examples of successfuldigital health startups financed by the
right venture fund.
 LetsGetChecked, an at-home diagnostics provider, was able to expand
its business model by working together with companies in providing
Covid-19 test to healthcare and frontline workers. The startup was
granted access to a newer, larger customer base and is the perfect
addition to its existing cancer screenings, sexual health, diabetes A1c,
and other diagnostic tests. Just last May, the company announced a
$71 million Series C financing.
 Redox, a pioneer in EMR interoperability, sealed the deal on three
successivefinancing rounds, each at a higher valuation. The company

4. also announced recently connecting its 1,000 hospitals. Early investors
in the company introduced a few key executives and promoted high-
profile business partnerships that helped advanced its growth.
 Elder careproviderWelbe Health successfullysignedmultiple financing
and expanded its business from conceptto large-scaleoperations. The
company’s early investors helped the company establish an innovative
financing strategy, which in turn helped in accelerating expansion.
 DermTech, a testing startup specializing in skin cancer, announced a
$65 million private placement back in March 2020. The company’s
early investors advised it through two major parts of its maturity—
creating a new market category of precision dermatology and
publishingresultsof seven trials thatincreased diagnostictest accuracy
up to 98%, well above the industry average.
Conclusion
In a rapidly changing market and uncertain time, it has become even more
importantfor digital health startupsto workwith a digital health venturecapital
firm that looks beyond short-term gains to achieve long-term success. In order
to find a firm that can promise and guarantee these results, startups need to
focus on the topics enumerated earlier. Digital health startups will notonly find
this article useful but also gain insight on the experience and network venture
capital firms offer.