June 30, 2022
For digital health companies that are ready to find investors or participate in accelerator programs, showcasing their company can significantly affect their financial outcomes. With record-making funding stories in the past two years, it’s clear that significant amounts of cash are flowing into digital health right now.
Funding for US-based digital health startups in 2021 nearly doubled over the year prior, reaching $29.1 billion in deals . This includes an unprecedented number of mega-deals — raising $100 million — with 88 companies reaching this milestone last year. Since the inception of the Bayer G4A Partnership Program in 2013 , over 150 digital health companies have been selected for funding and partnership opportunities with Bayer to drive the re-imagination of health care.
If you are ready to find a partner, here are seven tips to help you to better position and communicate your company and offering so you can attract and maximize investment.
Tailor your Pitch: Flexibility is Key
While you may already have a standard go-to pitch deck to showcase your company, business model, technology, and founder team to potential VCs, and investors, working with a corporate ventures team might be a little different. Many corporates already have a clear imperative on how they work together with their various partners and which specific solutions they are looking for. Understanding your partner’s partnering strategy and investment thesis helps you to tailor your pitch deck to their needs. This can mean the difference between getting sifted out of a pile and booking a meeting or hearing crickets. Simple, clear messaging about your business model tailored to their investment approach and partnering strategy helps potential investors, like Bayer G4A, quickly assess your fit with their strategic imperatives.
Value Proposition: Clarity is Key
While you may not need to deliver your elevator pitch in a physical elevator, being able to articulate your value proposition along the healthcare value chain differentiates you from your competitors. A strong, clear value proposition not only helps to convey your passion and conviction for what you do but can rally support from investors. Ultimately, it’s what can inspire them to bet on you and your company.
Feature Your Founding Face
Other than having an incredible product or technology primed to change the world, another element that investors are looking for is the secret sauce of who is on your team. Showcasing your founder team to potential investors is critical not just to demonstrate in-house skills, capabilities, and talent. But putting your people front and center can also be an indicator of your organization’s character and culture. Growth is usually painful and having people on the team that inspire confidence in your ability to overcome challenges and succeed is a differentiator that will check off boxes for prospective investors.
Expectations Today and Tomorrow
During talks with a potential investor, being clear and upfront about your expectations will help set the relationship up for success in the long run. Sharing what you expect from your investment partner is just as important as communicating what they can expect from you in return. Particularly for companies in the healthcare space, returns may not be as swift and intense as some VCs may be used to returns may not be as swift and intense as some VCs may be used to in other much speedier verticals. Aligning expectations for the return an investor can expect helps ensure that traditional investors or new investors in the digital health space are prepared for the often lengthy cycles. This is crucial if your customers are large, institutional-type organizations known for lots of red tape. Treating this as a long-term relationship demonstrates your ability to protect the investment being made in you and your company.
Showing the Good, the Bad, and the Ugly
Sharing the whole picture of where your business is at, including the challenges it's facing, paints a whole and necessary picture for potential investors. In addition to narrowing where to prioritize resources, laying out exactly where you stand helps to leverage financial and human capital investments to address the challenges you face. For example, if you have a solid technology team but have historically struggled with branding and communications, sharing this candidly with a VC partner may lead to valuable introductions and expertise that can supplement areas that need strengthening. Rather than trying to do it all and hide beneath a facade, being up-front about the hits and misses you’ve experienced along the way gives investors the confidence to stand by you.
Staying True to Your Colors
For a VC to truly believe in you, you have to believe in your vision genuinely. And there is no shortcut to building for the people you serve, whether it’s patients, customers, users — not investors. Maintaining authenticity in what you create anchors your sustainability through customer relevance. This dedication to customer relevance is paramount for Bayer G4A, which is why 90% of our partner companies today. are still on the market today. And as much as prospective investors may be assessing you for fit, take advantage of opportunities to ask them questions to discern fit for your company and culture, too. Again, viewing this investment as a long-term relationship means that both sides must feel abundantly comfortable in the partnership.
The Nitty Gritty Details
Don’t be shy about getting into the details of your company’s role in the healthcare industry. While an investor or VC may have market knowledge, the finer points matter when explaining how your company fills a gap or need. Getting into the nuances and specifics of how you’ve gained traction and how you’re moving the needle requires data to tell your story accurately. Investors want to know you’ve done thorough research, kicked the tires, and, ultimately, want to see the proof of why they need to back your uniqueness.
Though it’s easy to buy into the excitement of seeing deal announcements and press releases, raising capital isn’t a short-term gain or fast pass to freedom. It requires profound honesty and transparency to build trust and success for a healthy long-term partnership. Read about the Bayer G4A investment strategy and requirements to apply for our Partnership Program . And of course, reach out to the G4A team if you have questions.
