These factors decide on 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 significant role in shaping the healthcare system of the future as large European health tech platforms. Health-tech is not an easy area, many different factors decide on 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 of really wanting to build "something big". Especially in the healthcare system, this is not so obvious structurally at first glance - the system has many niches, myriads of stakeholders, and it is all too easy to get bogged down in one small area. At the same time, trying to make "a quick buck" is an illusion. Regulatory challenges, long sales cycles, and high demands in technical aspects such as data protection offer many opportunities to throw in the towel (prematurely?). Therefore, we are particularly dependent on sustainable growth models - in other words, the development of success stories can sometimes take a little longer, but be all the more promising in the end. That's why founders need a strong inner drive and real staying power.

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 get along. Here it simply has to fit. Of course, you notice this especially in difficult times - and there are in the development of every start-up. Still, believing in success and working together until the best outcome is found is important. When founders are driven by the mission to really want to change something, they fit in with us. You can just feel that.

We see product and business model as one of our strengths as a fund specializing in health tech.

Christian Weiss, Heal Capital

What is the third decisive factor for an investment?

We see the product and business model as one of our particular strengths as a fund specializing in health tech. The main question is: Can the product scale in an appropriate market? Especially 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 sought, an out-of-pocket service would make the most sense as a first step, or a classic B2B SaaS product would have the best chances.

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

Important points are of course the market and competition. However, they are not necessarily in the foreground, but rather considered in general proportion. The typical question "What if Google, Apple, Amazon or Facebook did the same?" is less relevant. Rather, it's about a general understanding of the market situation and how it might be responded to. In the end, for us, it's about the team again: we have to trust that the best possible response can be made to each situation. In healthcare, this requires the appropriate sensitivity for the different interests - the often common "move fast and break things" approach is often not the way to go for us.

Last but not least, the structure of the financing round is also important - just as much from our point of view as from 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 - just as much from our point of view as from that of the founders. For example, we ask ourselves the following questions: Are the founders still sufficiently incentivized after the financing round? Ideally, do they 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 not right with these factors, this can have a negative impact on the success of the company in the long term, which in turn would not be in our interest. In terms of the stage of the company, we are looking for investments that are typically between seed and Series A - that is, have a very first proof-of-concept of their product, and now want to really take off with significant institutional funding.

Thank you very much for the interview.