Attracting first round, Series A seed funding is one thing.
But, getting substantial Series B, multi-million dollar plus funding is an entirely different ball game.
And, many health IT firms aren’t ready to play.
When you’re looking to attract serious funding for your Health IT business, are you ready… and able… to answer the hard questions?
What is your value proposition, and how will you prove it?
Isn’t the best proof of the value you deliver paying, happy, satisfied clients who have experienced results from your Health IT solution? Do you have detailed case studies to prove your value to investors?
What pain points are you trying to solve in the market?
Investors want to know how that you understand your market in depth. Can you deliver survey results? Client interviews?
Do you have insights about your market beyond what they say in surveys and interviews… have you gained insights of your prospects and clients pain points based upon what they DO (or aren’t doing)?
What’s the cost of client acquisition in your business?
How much does it cost to land a client? How long does it take? In addition to initial cost of acquisition, what is the life-time value of a client?
Do you have adequate cash flow and a handle on initial cost of client acquisition to survive?
Having a business plan to develop income from clients after the initial transaction is the key to creating a viable, sustainable business. Most start ups fail because they only focus on the initial transaction.
How solid is your market and client data?
As the Wall Street Journal article states:
“A lot of these companies say they are going to pull data from a variety of sources, run algorithms on the data, and then present the data to the customer. At the Series B level, we would ask,
‘Why is this data actionable? Who is meant to take action on the data? How do you measure the impact of this data?’”
Is your data believable? Do investors trust the numbers you present? How does your data connect to sales and revenues?
In summary, if you want to attract serious funding, you must prove that your product or service delivers value. The best proof is real clients who have experienced results.
You must demonstrate a deep understanding of your market and the problems they are trying to solve.
You must show that you can acquire clients with costs under control. You business plan needs to address how you will develop revenues from clients you land.
Finally, the data you present, the numbers backing up everything, must connect to real business results.
Health IT firms who can land Series B funding will emerge as viable, sustainable businesses and winners in the healthcare IT market.