What healthcare investors actually diligence in 2024

Growth is table stakes

Two years ago, a healthcare company with 200% year-over-year revenue growth could raise almost regardless of margin structure. That door has closed. Diligence in 2024 opens with a payer economics conversation, not a growth chart.

The three questions on every partner's list

Every partner meeting we have observed this year has centered on three questions. What is the real cost to deliver this to one patient? Who pays, and on what schedule? What is the shortest defensible path to expanding that payer relationship?

Founders who can answer these in a single page get to a term sheet in weeks. Founders who cannot get pattern-matched into the 'interesting, not yet' pile.

Clinical evidence as a moat

Peer-reviewed publication is quietly becoming a de facto Series B requirement in categories with clinical claims. Not the abstract. The full paper. Investors are checking.

What to include in the data room

Cohort retention, payer mix over time, cost-of-care baseline, regulatory correspondence, and a candid list of the top five open risks. The last item is the one that closes rounds — investors do not trust founders who present a risk-free plan.

Unit economics under a realistic reimbursement scenario

It is no longer sufficient to model unit economics assuming best-case reimbursement; diligence now routinely stress-tests a startup's model against a scenario where a key code gets reduced or a major payer renegotiates rates downward. Founders who have only ever modeled the optimistic case struggle visibly when asked to walk through a downside scenario in real time.

The founders who diligence well tend to have already run this exercise internally, not as a defensive move but because they understand that reimbursement volatility is a structural feature of the market they operate in, not a tail risk. Presenting a downside-adjusted model unprompted signals a level of operating maturity that is hard to fake in the room.

Customer concentration gets more scrutiny than growth rate

A healthcare startup growing quickly on the back of two or three large health system contracts draws more skeptical questions today than a slower-growing company with a broader, more diversified customer base. The reason is straightforward: healthcare buyers churn slowly but unpredictably, often for budget or leadership reasons entirely unrelated to product satisfaction, and concentrated revenue is fragile in a way that a growth chart alone does not reveal.

Founders should come prepared with a customer-level breakdown of revenue, renewal timing, and champion turnover risk for their largest accounts, because this is now one of the first things a diligence team requests, well before they ask about the broader market opportunity.

How reference calls have changed

Investor reference calls now go well beyond the champion who sponsored the deal, reaching into the operational and clinical staff who actually use the product day to day. A founder who has only cultivated a relationship with a single executive sponsor, without visibility into frontline sentiment, is exposed the moment a diligence team asks to speak with a department head or a nurse manager directly.

The founders who handle this well proactively offer a broader slate of references, including at least one skeptical or lukewarm user, because a uniformly glowing reference list now reads as curated rather than credible to an experienced diligence team.

Building a data room that survives scrutiny

A modern healthcare data room needs more than a pitch deck and a financial model; it needs a clearly organized regulatory status summary, a coding and reimbursement rationale, a clinical evidence summary with study limitations stated plainly, and a customer cohort analysis broken out by contract type. Omitting the limitations of a clinical study, in particular, tends to backfire once a technical diligence partner reads the underlying paper.

Founders should assume that any claim in the deck will be traced back to its source document, and organize the data room accordingly, with each claim linked to the evidence behind it. This level of preparation shortens the diligence cycle meaningfully, because it removes the back-and-forth that otherwise consumes weeks of partner time.