The macroeconomic environment has seriously transformed the fundraising landscape for healthtech, just as it has for other sectors.
Throughout most of 2023, we observed healthtech venture capital firms shifting their focus. They deprioritised the least performing and mediocre companies in their portfolios, concentrating instead on the top performers.
The mid-and post-COVID-19 investment boom for the health industry has subsided, leading to a market correction that makes fundraising harder for founders:
- Valuations got smaller
- The rounds became longer
- Flat and down rounds have become commonplace
- The number of deals has stayed flat across 2023
- Zero IPO activity in healthtech so far
- Alternative funding sources, bridge funds, and M&A deals became the norm
The current trend indicates that as the pool of startups seeking funding expands, venture capitalists look for better ways to filter through the overwhelming number of applicants; some pre-seed pitch decks, for instance, don’t even get opened.
Is it all doom and gloom, then? Not quite. As we segway into 2024, there’s a noticeable resurgence in investor activity in healthtech, with several startups we’ve worked with securing impressive funding rounds. Founders who know what buttons to push and what mistakes to avoid will be able to stand out in this harsh fundraising market.
During the past year, we at Waveup helped 12 healthtech startups secure over US$150M in funding. Here’s what we learned.
The most problematic mistakes in healthtech pitch decks
Overly technical language
You can always tell a medical and other life sciences deck from decks in other industries: nine times out of 10, it will be impossible to understand without Googling the terms. Founders, mistaken that investors are on the same level of understanding the subject matter, inundate their presentations with language that needs decoding.
The problem is that investors won’t spend a single extra minute decoding the unfamiliar terminology; they’ll simply skip it. This can be a big problem if the information they skipped is vital for understanding the value and motivating them to give you the money.
How to fix it:
- Explain uncommon abbreviations and acronyms. When using terms that are less common knowledge than the FDA, NHS, BMI, and the like, spell them out.
- Avoid unnecessary jargon. Yes, the use of jargon sometimes is unavoidable in this field. But it’s your job to tone it down to an understandable level or to further explain obscure terms without expecting investors to do all the heavy lifting for you (they won’t).
Features over value
Here is a problem most founders—but particularly those in life sciences and high tech—suffer from: they can talk about their solution for hours without saying why it matters. They think that investors will understand the intrinsic value of a particular feature and be blown away by default, which is not the case.
How to fix it:
- Make sure every feature you mention communicates your value proposition and shows how it helps you solve the problem you stated in the beginning.
Convoluted visualisations
Abstruse imagery ridden with illustrations of biological processes and confusing charts are typical for healthtech decks we review. It’s as if founders make them for scientists, not investors.
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As a result, instead of simplifying the information and further engaging the reader, founders achieve the opposite effect and confuse investors even more.
How to fix it:
- Before including graphs or charts in your deck, run them by people without medical background: can they understand them? If not, simplify or remove.
Lack of a strategic angle and exit opportunities
Regardless of your stage, investors buy the potential. The current product serves merely as proof that this potential is achievable, but the focus is always on the future cash-in. A half-baked strategy and a lack of long-term vision for the business make investors doubt you have this potential.
How to fix:
- Clarify your exit opportunities, e.g., through M&A, commercialisation, etc. Then, explain how you will get there by providing a go-to-market roadmap of the next steps, distribution channels, and a rough timeline.
Weak journey to date
Lack of traction is a major red flag for investors, and we see it all the time in healthtech presentations. Founders often think they have nothing worthwhile to show for themselves (which is seldom true) or don’t know how to do that. Either way, missing traction diminishes your chances of attracting investor’s attention.
How to fix it:
- Your traction is the biggest de-risk factor for investors, so highlight it in every way possible. There is always traction you can show to prove you can move the project forward, which we discuss further.
Walls of text
Your technology might be complicated, but you can’t afford to stretch your explanations of it to a mini-book. Walls of text won’t make your solution clearer for VCs, as they just won’t read them.
How to fix it:
- Keep it short. Don’t try to cram every detail you deem necessary; rather, focus on the high-level breakdown of the solution and its applications.
- Keep the language simple and your phrases concise. If possible, think of ways to use images to systemise the information.
Creating a healthtech pitch deck that drives investor interest: 15 must-have slides with tips and examples
Medical and science pitch decks differ from other decks in how you structure them, deliver information, and defend your statements. Therefore, having reference points is crucial for the success of your fundraiser.
To make it more illustrative, I pulled some examples of must-have slides from healthtech startups that gained traction with venture capitalists, along with recommendations to them.
Slide 1: Set the stage by explaining the massive opportunity
Most startups traditionally open their decks with a problem. From what we witness daily, this approach progressively loses its efficiency among investors, inundated with same-ish decks.
The beginning of a deck must get investors excited and grab their attention. Nothing does it better than opening with a bold promise that they have a massive opportunity on their hands.
To do this, start with a powerful statement that sums up your grand vision. Show investors that your solution’s long-term impact on the world is worth their while.
Source: Birdie pitch deck.
Slide 2: State the problem
In most cases, the problem slide is the opener for the story that must pull investors in, so it should be right on the money. Here is how to make it count:
- Be brief and aim to explain the problem in a couple of sentences
- Always use statistics and facts to support your statements and highlight the magnitude of the problem
- Aim to stress the problem’s size/scope to show a promising market opportunity
- Use strong language or analogies to drive your point home
- Keep this slide simple; don’t overwhelm investors with information from the get-go
Problem slide example. Souce: Waveup Series B deck.
Slide 3: Explain why existing solutions don’t work
Before presenting your solution, you must first explain to investors how existing medical/health solutions fail to solve the problem or why their way of solving it is flawed. Addressing the real downsides of the existing alternatives that investors likely are not aware of will further highlight your competitive edge and the solution’s market potential.
Here’s how to do that:
- Open the slide with a powerful statement on how the existing solutions are problematic
- List all the solutions and their key downsides
- Make it simple and illustrative
Source: Clearing pitch deck
Slide 4: Demonstrate the solution
It’s important that your solution slide serves as an answer to the problem slide and can be easily connected to it. Instead of inundating investors with complicated technology that doesn’t say much to them, make the inner workings of your solution understandable for everyone:
- Explain your solution in a way that is easy to understand for someone without a medical or science background
- Keep the focus on the use cases; when explaining features, connect them to the value they bring and the problems they solve
- Use simple language and illustrations that non-medical people can understand.
Solution slide example. Source: Examedi pitch deck.
Also Read: What telemedicine and Health Tech holds across SEA amidst COVID-19
Slide 5: Dive into your features and technology
After you’ve explained your solution’s value for the customers in high-level terms, you need to break down how the tech works and explain your technological moat, aka what makes it unique and competitive.
- List all your stand-out features
- Explain what sets your technology apart from that of the existing solutions
- Be specific; this slide is meant for you to dive into the nitty-gritty of your product
Source: Apricity pitch deck
Slide 6: Explain your value proposition
Suppose your solution slide should explain how your solution operates to help solve the problem. In that case, your value proposition slide must emphasize the specific value the primary beneficiaries will get.
- Speak about the direct and indirect benefits of your solution for your customers
- Use comparisons with traditional and existing treatment methods to highlight the value point and how you stand out
- If possible, pull up numbers and metrics resulting from using your solution.
Value proposition slide example. Source: Ada pitch deck.
Slide 7: Demonstrate your clinical pipeline
The clinical pipeline slide might not be relevant for all healthtech companies. If your product doesn’t require clinical trials, or you are past this point, skip it. But if your solution requires extensive clinical testing and regulatory approval, it is a must to include.
Here’s how to demonstrate your clinical growth roadmap to investors:
- Show all the core therapeutic areas, clinical trial status/phases, and indications
- Include any partnerships you might have established
- Include your KPIs and the expected timeline of market adoption
Clinical pipeline slide example. Source: HMNC Brain Health pitch deck.
Slide 8: Show your product development vision
You might be focused on solving a specific problem now, but do you have the potential to expand your market in the future? Investors want to know that, even if you start small, your product has the potential for a wider application, compounding the TAM without much additional funding and resources.
- Show how you can later expand on different therapeutic areas and widen your use cases without much investment in further product development
- Show how you expect your indications to progress short-term and long-term
Opportunities for expansion slide example. Source: ReCode Therapeutics pitch deck.
Slide 9: Market size
- Show the scale of your addressable market through the lens of the existing & potential opportunity
- Use your indications, therapeutic areas, or target geography to demonstrate the logic behind the numbers and sources for assumptions
Market size slide example. Source: Alloy pitch deck.
Slide 10: Strategy and long-term vision
No matter how much of a breakthrough your solution is, at the end of the day, investors only care about their endgame: to make money. To convince them that you will, you must show that you have a long-term vision that makes sense.
What investors expect to see on this slide depends heavily on your sector
- For biotech or new drugs, you need to present a strategy for approval and a road to commercialization and/or exit. Here, you should list your exit options and the horizont: M&A with the names of the potential acquirers and precedents, a roadmap to commercialization, etc.
- In a tech app space, it is more about your GTM motion, distribution channels, business model, etc.
Strategy slide example. Souce: Waveup Series B deck.
Slide 11: Competition
Every investor wants to see how you plan to outcompete other players in the space. The competition slide is where you demonstrate your deep understanding of the competitive landscape, your positioning, and your advantage.
But don’t just compare features—it’s a common mistake, as features are replicable and aren’t enough alone to overtake the competition. Instead, present your competitive moat and strategic positioning, showing how to lead the category.
Competition slide example. Source: Clearing pitch deck.
Also Read: One doctor for every family: Good Doctor wants to make healthcare accessible for all Indonesians
Slide 12: Traction/Journey to date
Show off any milestones you’ve achieved by this point:
- Patents
- Approved clinical trials
- Medical publications
- Raised funds
- Treated patients
- Partnerships, etc.
Traction slide example. Source: Palta pitch deck.
Slide 13: Proof of efficacy/User or customer validation
Just like in any scientific field, your technology must show that it’s working to generate any interest from investors. Burnt by Theranos and the like, VCs now demand more than bold promises about magical cures—they want proof that your technology is effective.
How you do this, again, depends on the type of your product.
For drug and treatment solutions:
- Put your solution against the standard in a specific therapeutic area or geography
- Demonstrate real clinical trials and explain the results in a simple and clear manner
For tech solutions, it’s all about presenting user/customer validation signals:
- Endorsing quotes and testimonials from users and medical experts
- Number of downloads, active users, or subscriptions
- Improved health outcomes in numbers, and so on.
Proof of efficacy slide example. Source: Emocha pitch deck.
Slide 14: Team
The more scientific or technological the field, the heavier the emphasis will be on having a stellar team behind the project. Investors will zoom in on how well each team member understands the intricacies of the field and the value they can bring, so put the members’ expertise and achievements front and centre.
- Highlight your founding team’s key achievements and impressive elements of their background: prestigious universities, logos of their previous companies, successful projects they participated in, etc.
- Include the board of advisors and partnerships
Team slide example. Source: Meliora Therapeutics deck.
Slide 15: The funding ask
Here, investors will want to see how much money you need, how you plan to use it, and what goals you plan to achieve for this round.
- Voice your funding ask
- Include your runway and use of funds breakdown
- Describe key milestones
Funding ask slide example. Source: Waveup Series B deck.
The healthtech fundraising space is getting crowded, so make your pitch deck count
The revival of investor interest in healthtech is promising, but the competition in the space is growing. The number of startups entering the arena seriously outweighs the capital available, raising the bar of investor expectations and transforming their preferences. Magnified by the overall market downturn, longer rounds, and lower valuations, this tendency makes it easier to fall by the wayside than ever.
To not miss your shot, take time to rid your pitch deck of common mistakes and craft a powerful investment story consisting of:
- A clearly communicated value proposition
- A wide range of potential applications
- Proof of concept and market validation signals
- Long-term and short-term strategy
- Strong traction signals
If you take your pitch deck seriously, investors will, too.
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