These factors are decisive for an investment by Heal Capital

Managing Partner Christian Weiss reveals how he selects investments and why classic start-up patterns do not always apply to young companies in the health tech sector.

With Heal Capital, Christian Weiss and his team want to finance companies that will play a key role in shaping the healthcare system of the future as major European health tech platforms. Health-tech is not an easy sector, with many different factors determining an investment and a possible future. But what are they? Five questions for: Christian Weiss, Managing Director at Heal Capital.

Which factor is the most important for you?

Building a large health tech platform is a very special challenge - and requires a corresponding vision to really want to build "something big". In the healthcare system in particular, this is structurally not so obvious at first glance - the system has many niches, myriads of stakeholders and it is all too easy to get bogged down in a small area. At the same time, it is an illusion to want to make a "quick buck". Regulatory challenges, long sales cycles and high demands in technical aspects such as data protection offer many opportunities to throw in the towel (prematurely?). We are therefore particularly reliant on sustainable growth models - in other words, the development of success stories can sometimes take a little longer, but in the end be all the more promising. That's why founders need a strong inner drive and real stamina.

What is the second important factor?

It may sound banal, but it is absolutely crucial: the "personal fit" is of course extremely important to us. The period from initial investment to exit can easily be up to 10 years on average. That could be a very long time if you don't understand each other. It simply has to be a good fit. Of course, this is particularly noticeable in difficult times - and there are such times in the development of every start-up. Nevertheless, it is important to believe in success and work together until the best result is achieved. When founders are driven by the mission of really wanting to change something, they fit in with us. You can just feel that.

As a fund specializing in health tech, we see product and business model as a particular strength of ours.

Christian Weiss, Heal Capital

What is the third decisive factor for an investment?

As a fund specializing in health tech, we see product and business model as a particular strength. The main question is: Can the product scale in a corresponding market? Particularly in the case of foreign companies that want to enter the German market, the question arises as to which business model is the most promising here. In the healthcare sector, it is not easy to see at first glance whether reimbursement via insurance should be the aim, whether an out-of-pocket service would make the most sense as a first step or whether a classic B2B SaaS product would have the best chances.

This brings us to the fourth factor. Which one is that?

Of course, the market and competition are also important factors. However, they are not necessarily in the foreground, but are rather considered in a general relationship. The typical question "What if Google, Apple, Amazon or Facebook did the same thing?" is less relevant. Rather, it is about a general understanding of the market situation and how to react to it. In the end, it's about the team again: we have to trust that we can respond to each situation in the best possible way. In the healthcare sector, this requires the appropriate sensitivity for the various interests - the usual "move fast and break things" approach is often not the method of choice for us.

Last but not least, the structure of the financing round is also important - both from our perspective and that of the founders.

Christian Weiss, Heal Capital

What is the fifth decisive factor?

Last but not least, the structure of the financing round is also important - both from our point of view and that of the founders. For example, we ask ourselves the following questions: Are the founders still sufficiently incentivized after the financing round? Do they ideally hold a clear majority of the shares? Are the interests of the various shareholders and investors aligned? The focus here is on the long term: if something is wrong with these factors, this can have a negative impact on the company's success in the long term, which would not be in our interests. With regard to the company's phase, we are looking for investments that are typically between seed and Series A - i.e. that have a very first proof of concept of their product and now want to really take off with significant institutional financing.

Thank you very much for the interview.