How corporate VCs, accelerators and incubators can prepare startups to work in healthcare Leave a comment
Healthcare can be a challenging field to enter, particularly for health tech and digital health startups that haven’t worked directly with the industry before. As funding booms, venture capital firms, accelerators and incubators that are based inside or collaborate with provider organizations aim to ease these new companies into the space.
Elizabeth Carr, managing director at Children’s Health Ventures, the venture arm of Nicklaus Children’s Health System, said part of their role is to help startups learn how to integrate into a health system and how to understand the unique needs of pediatric patients.
“We found that our sweet spot is really going to be the series B to series D range, because those companies already have customers. They tend to have a successful team, and that’s critical. Their solution works. You have a team with the vision to drive it,” she said during a panel discussion at HIMSS22. “And in our organization, if we’re focused on treating children, we can’t be focused on helping put out fires for entrepreneurs.”
Helping new tech companies understand the healthcare culture is also important. Startups that haven’t worked in the space may not understand the administrative and regulatory concerns they’ll need to manage. For instance, if a tool can’t integrate with the Cerner EHR, that could be a problem for companies that want to work with Nicklaus.
“More importantly, it’s understanding that technology or innovation for innovation’s sake doesn’t resonate with frontline leaders who want to understand how this is going to make the lives of their staff and their patients and their families better,” Carr said.
Explaining the particular needs of pediatric care is also necessary. Providers have to consider the entire family, not just the patient, Carr said.
It’s a smaller space compared to the adult health tech market. Dana Le, founding accelerator lead at KidsX, said her accelerator’s analysis showed funding for pediatric-focused software grew significantly last year, but it was still a relatively small portion of overall digital health funding.
Since they work with early stage companies, Le said KidsX receives thousands of applications, and it’s important to thoroughly vet those startups’ claims.
“It can be a little frustrating because you have to go really, really deep into the details of the startup because, as a startup, they’re trying to sell,” she said.
Le said there has been a lot of funding going toward telehealth and remote patient monitoring for kids, but there are areas that need more solutions.
“A focus area that is really a hot topic and something that needs more innovation is mental health,” she said.
As a corporate VC, Carr is looking for tools that fit into their organization’s overall strategy and care needs. One area of interest is in tools that can make the hospital experience less upsetting for children. For example, MRIs can be really scary for kids.
“Anything in this space that enables a child’s experience to be less traumatic and inviting into an institution that wants to help and not hurt is what we’re really trying to focus on in funding and our collaborative approaches,” she said.
