The Shift Has Already Happened
A couple years ago, you could raise a funding round with a slick deck, a pilot or two, and some good storytelling. Given the current economic environment, exits are harder to come by.. What we’re seeing more and more — from both venture capital firms and private equity folks — is a reset in how they evaluate digital health.
They’re not just asking what problem you solve. They want to know how you sell, how you get paid, and whether the system is already using you in a real, operational way. The appetite for big, beautiful vision hasn’t gone away. But it’s become second priority. First, they want signals that show your solution fits into the actual way healthcare works — messy workflows, CPT codes, budgeting cycles, stakeholder misalignment and all.
This is where most decks fall apart. Not because the idea isn’t strong — but because the story skips over the parts investors actually use to score you. You might think your pitch is about the product, the patient, or the promise. But what investors are really scanning for is proof. Proof that you can sell. That you can scale. And that your solution fits the way healthcare really works.
Here are five questions digital health investors are asking in 2025.
1. Do You Have Proof of Commercialization?
If you’re still talking about pilots and logos, you’re not quite there yet. What investors want to see is revenue. Paid deployments, repeatable sales, anything that shows your solution has already made the leap from “interesting” to “purchased.”
A signed pilot that renews into a longer-term agreement? That matters. Better still, show net new revenue tied to care delivery activities — especially those that produce billable CPT codes or close care gaps.
For example, if your solution supported Transitional Care Management services, and billing data shows CPT 99495 activity going up post-implementation, now you’re talking real-world traction.
If you’ve been deployed across multiple facilities or business units — and it didn’t require heroics each time — that’s another signal that you’ve moved from custom projects to a repeatable offering.
2. What’s Your Solution’s Billing and Reimbursement Pathway?
This one’s big, especially for clinical tech. If you’re saying your solution “saves time” or “improves outcomes” without showing how that translates to revenue, you’re leaving money — and credibility — on the table.
You need to show how the solution gets paid for. That could mean CPT codes, risk-based contracts, budget carveouts, or inclusion in a broader value-based care program. If you’re relying on CPT codes, name them. Show frequency of billing. Be honest about any barriers to adoption, like documentation burden or time thresholds.
Let’s say your solution enables Chronic Care Management. Can your customers bill 99490 or 99491? Are they doing it? If yes, how much revenue is generated per enrolled patient, and how many providers are actively billing today?
If the model is value-based, you’ll want to tie usage to quality measures or cost avoidance metrics. Show how your intervention improves patient satisfaction (HCAHPS), reduces hospital readmissions (HRRP), or contributes to shared savings under ACO REACH.
3. Does Your Solution Fit Into Healthcare Workflows?
You might think healthcare needs your solution. But the question investors ask is: does it actually fit?
That means:
- Where does it live today?
- What staff use it?
- What part of the workflow is now faster, cheaper, or less prone to error?
Here’s a way to frame it:
“Our tool is used by discharge nurses to run a standardized medication reconciliation, embedded in Epic, between 2:30 and 4:30 p.m. on weekdays.”
That tells me exactly who, when, and how it’s used.
Vague answers like “care teams can use it to coordinate follow-up” don’t help. That sounds like a maybe. What you want is a “this already happens.” Especially if you’ve removed friction — clicks, screens, steps, manual outreach. That’s what makes people believe in scalability.
4. What’s Your Go-To-Market Motion?
Here’s the real question: once the warm intros dry up, who’s buying? How do they buy? And why do they keep buying?
Investors want to know whether you understand your ideal customer profile — not just who the champion is, but who signs, who funds, and who expands it.
If your model relies on landing one site, then growing to five or ten through operational rollout, show it. How long does it take to go from first demo to signature? From implementation to billing? What’s your current land-to-expand ratio?
You’ll want to reference any channel partners, embedded marketplaces, or sales leverage points you already have. If Redox, Salesforce, or a major GPO is starting to route opportunities your way, say it. That’s what tells the investor you’re not just a founder with hustle — you’ve built GTM leverage.
5. Has Your Solution Been Validated?
Last piece — and a big one. You need someone besides you saying this thing works. I don’t mean media buzz or awards. I mean buyer-facing signals of legitimacy.
If KLAS Research has included you in a category report, that carries weight. If Redox, Health Gorilla, or another integration partner is vouching for you in deals, that counts. And if you’re already listed in a major EHR marketplace like Epic’s App Orchard or Cerner’s code platform, mention it.
All of these create what I call halo credibility. They give the investor permission to believe you might be one of the winners.
This whole section isn’t just a checklist. It’s your new readiness framework. If you’ve got gaps, better to know now than mid-diligence. If you’ve got signals, then tighten them and lead with them. That’s what’s helping founders close in 2025.
What This Means for Founders and Operators
You can’t just position yourself as a vision-led innovator. You need to show how your solution makes money. Not someday. Now. And not just in a hypothetical case study — but in real workflows with real providers who are getting paid because of your work.
You don’t need to have everything figured out. But you do need to stop hiding behind the story.
If you’re on the operator side — product marketing, revenue, implementation — you have even more influence than you think. Your job is to de-risk the story for whoever’s funding it. Help the founder show where the billing data lives. Document what happens in week one of a go-live. Show screenshots. Quote users.
When in doubt, start with workflow and reimbursement. If you can’t explain how the solution fits and how it gets paid for, that’s where most diligence dies.
Digital Health Investor Shortlist: VCs That Care About This Stuff
If you’re raising or supporting a raise, it helps to know which firms are asking these questions. Here are five that consistently do.
- a16z Bio + Health — In 2024, a16z was the most active U.S. digital health investor with 26 deals. Their Bio + Health fund exceeds $3 billion and backs teams at the intersection of AI, biology, and infrastructure. Founders tackling scientific and commercial complexity often find strong alignment here.
- General Catalyst — GC completed 25 U.S. digital health deals in 2024 and closed a $750M Health Assurance Fund II. They’re deeply embedded in health systems like HCA and Jefferson and prefer startups that fit clinical workflows and can scale system-wide.
- Define Ventures — With over $800 million under management, Define has backed early-stage companies like Hims & Hers, Cohere Health, and Unite Us. They bring go-to-market rigor and have helped place senior talent across two-thirds of their portfolio.
- Optum Ventures — With a portfolio of over 70 companies and $2 billion under management, Optum Ventures helps startups plug into the UHG ecosystem. Their bets often reflect a deep understanding of payer-provider alignment.
- Transformation Capital — Focused on post-pilot growth, Transformation has backed companies like Sword Health and Capital Rx. Their $800M+ AUM supports teams with operational traction and GTM clarity.
To go deeper, check out the full writeup on our blog: Digital Health Investors 2025.
Final Thought: The Story Now Is Execution
The question isn’t “What are you selling?” — it’s “Where is it already working?” If your solution is live in workflows, enabling billing, and creating repeatable wins, then you’re no longer selling a story. You’re showing a business.
So if you’re prepping a raise, spend less time polishing your pitch and more time surfacing your proof points. Where does the product sit? Who is billing through it? What part of the revenue engine does it touch — net new reimbursement, retention, efficiency?
That’s the story investors lean into: not flashy, but fundable.
