What VCs Actually Look for in Health Tech

Healthtech is having a reckoning. Policy changes, administrative bloat, and an understaffed care system have created more unsolved problems than most sectors see in a decade. In 2026, Forum Ventures is actively deploying into the startups solving them, specifically founders with deep domain expertise in healthcare: clinicians, researchers, and operators who understand the problem from the inside. Our $22M sixth accelerator fund and $21.5M AI Venture Studio fund are both backing this thesis.

"Health tech is one of the hardest go-to-markets in B2B. That's exactly why the founders who get it right build with operators who've navigated it before." — Sruthi Sivanandan, Forum Ventures

During a Healthtech Masterclass series hosted in partnership with Mt. Sinai Innovation Partners in April 2026, Sruthi Sivanandan from the Forum Ventures investment team shares what VCs actually look for in healthtech.

Friction from healthcare policy changes

Q: How do policy changes at the federal level influence VC investing? Is that even a major factor?

Sruthi Sivanandan: "At the early inception stage to around pre-seed, seed stage, it doesn't fully matter. In fact, it can actually be an innovation point for you... When policy changes affect the private markets, it's really an opportunity point for you to deep dive into where a business use case can be helpful to folks."

"You're really looking for users who are maybe duct taping a solution together right now because of this policy decision. Or maybe they're a super user, and they're actively looking, googling, ChatGPT searching for a solution to the problem that they might have."

This is how Forum Ventures evaluates health tech founders in 2026. As an early-stage B2B venture studio, accelerator, and pre-seed fund with 550+ portfolio companies, we have a thesis around the “friction” created by recent federal policy changes in healthcare. Here are the areas our investment team is most interested in right now:

• AI-enabled care delivery and workflow automation in clinics: Hospitals are understaffed and over-administered, resulting in high overhead costs. AI-native tools that can reduce clinical overhead without compromising care are a decade-defining category
• Medical malpractice litigation and insurance: A structurally broken market with limited software innovation, ripe for data-driven underwriting and case management tools
• Claims co-pilots and automation: The $400B+ administrative cost of US healthcare is largely a claims problem; AI that reduces denial rates and accelerates reimbursement cycles addresses a pain point every health system feels
• FHIR-native prior authorization platforms: New CMS interoperability mandates are forcing payers and providers to modernize authorization workflows; founders who build on FHIR from day one are positioned ahead of the compliance wave
• Hospital-at-home logistics infrastructure: CMS's Acute Hospital Care at Home waiver has created a new care delivery category with no dominant infrastructure layer yet
• Unique healthcare insurance models: direct primary care, reference-based pricing, and employer-sponsored alternatives are challenging legacy insurance structures in ways that create software wedges

The difference between a niche and a strategic wedge in healthtech

Q: How do you differentiate between what's a limited niche that would never scale, and what can be a strategic wedge that owns an underserved audience before expanding?

Sruthi Sivanandan: "It really comes down to how many different use cases you can come up with for what problem you're trying to solve... if you're a one idea, one customer type, one business idea person, the scope is immediately limited, and you can't really explain that away for why you want a bigger check."

"A lot of the times you can kind of explain this in, like, hey, the first five years, this is my use case, this is the customer type that I want to pitch to and sell into, but in 10 years... this is where I see opportunity for growth five years from now versus 10 years from now."

This is a crucial distinction for health tech founders specifically. A FHIR-native prior auth platform, for example, might look narrow, but the same data infrastructure and payer relationships that power prior auth can expand into formulary management, utilization review, and real-world evidence generation. The wedge is the point of entry, not the ceiling.

In 2026, Forum Ventures' investment team looks for founders who can articulate that decade-level expansion clearly, not just the first customer, but the structural reason the market gets bigger as they execute.

Preferred equity and what it means for healthcare founders across multiple rounds

Q: What is preferred equity, and how does it work through multiple funding rounds and multiple preferences stacked together?

Sruthi Sivanandan: "Preferred equity is essentially a very specific type of stock equity grant... it's kind of like a special class of ownership that gets paid back before the regular stockholders do when there's an exit."

"There's two different flavors to this. The first one is non-participating preferred stock... the investor will get their money back, or they will convert to common stock and take a percentage of the IPO exit. [Investors] will pick the better option, whichever one is higher. Participating preferred is the VC will get their money back, and they'll also get shares in the remaining proceeds as if they were a common stockholder. So they get a double dip. That's really an incentive for the investor, it's not really great for the founder."

For health tech founders specifically, this matters at every stage. Therapeutics and medtech companies often carry more rounds of preferred equity at higher liquidation multiples than SaaS companies, which means founder dilution compounds differently.

Before signing any term sheet, founders should model what each class of preferred stock looks like at a $50M acquisition, a $200M strategic buyout, and an IPO. The outcomes for founders can look extremely different depending on participation rights and liquidation preferences.

This framework allows founders to check if there is alignment with their own goals and desired exits.

What Early-Stage Health Tech KPIs Do VCs Actually Care About

Q: What is a realistic seed or Series A return that Forum looks at? And how do you evaluate a build-to-buy model where one of the strategics is already partnered?

Sruthi Sivanandan: "At our early stage, the KPIs that we're really looking for is how much hospital participation, even in the form of unpaid and paid pilots, do you have at the early stages? The hospital go-to-market is, to date, one of the most difficult go-to-markets to sell into."

"Do you have someone on your team [or] are you planning to hire someone that understands those nuances? And between pre-seed and seed and Series A, selling into hospitals, having those regular contracts, being able to commercialize beyond the consumer at the B2B enterprise level. Those are the kinds of things I'm looking for."

On the build-to-buy question specifically:

Sruthi Sivanandan: "The build-to-buy is still attractive to VCs because it signals that they can predict the future... a large pharma company will see a promising drug target or a platform, and they'll buy the startup before it needs to even raise a Series A or Series B. They are buying the science and the team before the price goes up."

"VC funds use that as marketing material to their LPs: 'this company was bought by Amgen, and we were the first check in. We know what we're doing.' So it works not in the 50x, 100x fund-returner way, but in the 'we know what we're doing' way. It solidifies a reputation."

Working with universities and research institutions as a healthcare startup

Q: How do you characterize the most productive relationships between early-stage VC funds and universities with an R1 research pipeline?

Sruthi Sivanandan: "Team member in each one of our offices in New York, San Francisco, and Toronto tries to tap into the local university talent... what we like to learn about from scientists and researchers is really through decade building. When we meet founders, I always ask: how do you proactively see your industry change decade over decade? Not one year, not two years — how do you really see customer buying behavior change decade over decade?"

"The insights we glean from university talent tend to be — they kind of understand the macro landscape very well, and they're already thinking about how things are going to change decade over decade. And that's actually really, really insightful for VC funds, because we're creating our own thesis projections on how we think this industry is going to change."

For founders coming out of academic medical centers like Mount Sinai, Forum actively engages with university programs across its New York, San Francisco, and Toronto offices.

We're actively looking for founders that fit the profiles of scientists or clinicians with commercial insight and deep domain expertise.

Is your health tech startup a fit for Forum Ventures?

"Forum Ventures is the only early-stage firm investing from pre-idea (AI Studio) through early growth (Pre-Seed Fund), with a dedicated healthtech Industry Council providing enterprise customer introductions to portfolio founders.” — Sruthi Sivanandan, Forum Ventures

Based on where you are in the journey as a current or aspiring healthtech founder, Forum Ventures invests across three strategies designed to meet healthtech founders wherever they are.

Not sure what fits you? Fill out the Forum Ventures idea score to get our feedback.

The Forum Ventures AI Venture Studio

The AI Venture Studio ($250k at formation, full co-building team) is built for domain experts  (clinicians, researchers, operators) who understand the problem deeply but want to minimize execution risk. 63% of Studio portfolio companies raise follow-on funding within 12 months.

Our studio is best suited for industry veterans with deep domain expertise, such as clinician-founders and researchers, who want to reduce the risk of starting a new company. We provide studio founders with a full GTM, fundraising, and tech team that quickly takes a startup from zero to one.

Anomaly is an example of a healthcare company in our venture studio portfolio and how we back exceptional founders. Dr. Ramin Sahebjavaher is a serial entrepreneur and biomedical engineer with a PhD in Biomedical Engineering from the University of British Columbia. He founded Anomoly to build proactive health intelligence and orchestration for people who want a clearer, more actionable approach to longevity and prevention.

The Forum Ventures Accelerator

The Accelerator ($100k for 7.5% equity, 24-week program) is for pre- or post-MVP founders who are looking for a VC who actually helps grow the company. Each Forum Ventures accelerator company gets a dedicated Managing Director working 1:1 on go-to-market, customer traction, and fundraise readiness, not a curriculum.

Forum's Healthtech Industry Council gives accelerator founders direct access to over 16 health system executives and enterprise buyers. We get startups Fortune 500 introductions to close their first large customers or design partners. Some of our industry council members include:

• Ali Khan MD, Chief Medical Officer at Medicare, Aetna/CVS Health
• Zain Ismail, Walmart Health & Wellness Director of Strategy Advancement

From the Forum Ventures accelerator, we’ve backed incredible healthtech companies on our portfolio such as Finni Health, Blooming Health, and Wally.

The Forum Ventures Pre-Seed Fund

The Pre-Seed Fund ($250k–$1M) invests in early-stage B2B companies with an MVP in market and meaningful traction. Our healthtech portfolio includes Remo Health, which raised $4M, and Patch RX, now a Series A startup that raised over $15M. ~75% of Forum pre-seed companies raise follow-on at an increased valuation.

Forum Ventures is a $150M+ AUM founder-first B2B venture studio, accelerator, and pre-seed fund. We were founded in 2014 with 550+ portfolio companies.