How to Raise Early-Stage Health Tech Rounds

Key takeaways from a webinar with Jason Jacobsohn, Partner at Propellant Ventures and Cole Levin, GM of Pilot Consulting

The health tech fundraising game has changed. Rounds take longer. Investors ask harder questions. You need to be smarter.

In a recent webinar, Jason Jacobsohn from Propellant Ventures shared what it takes to win early-stage health tech rounds, joined by Cole Levin from Pilot.

Jacobsohn has 20 years investing in early-stage digital healthcare, fintech, edtech, and supply chain companies. Here's his roadmap for Series A fundraising.

Levin has 12 years in strategy consulting, corporate finance, and early-stage business operations. The Pilot CFO team has closed over 200 fundraises and is currently involved in 35 raises across AI, technology, healthcare, consumer goods and manufacturing.

What Series A Investors Really Look For

Team strength remains paramount, but traction becomes critical at Series A.

"The team is probably the most important at that stage," Jacobsohn explained, while also stressing that traction is what closes rounds. Healthcare industry expertise matters—whether in the CEO, another team member, or advisor.

The Essential Checklist for Series A Readiness

Revenue and Compliance Foundations
Revenue requirements vary, but Jacobsohn expects some monetization or clear path to revenue. For digital healthcare companies, HIPAA compliance is non-negotiable. "There should be some HIPAA compliance for sure in a digital healthcare company at that point," he emphasizes.

Alternative Traction Signals
Companies not generating significant revenue can show viability through:

• Strategic partnerships with hospitals or insurance companies
• Pilot programs with measurable outcomes
• Strong sales pipeline with predictable conversion rates
• Letters of intent from potential customers
• Patent filings or grants for innovative technology

These signals show investors a company is "onto something" beyond just a compelling pitch.

"Obviously the ultimate sign is revenue, but if you have LOIs or a good pipeline, partnerships, pilot customers – that's all very helpful," Jacobsohn added.

Timing Your Fundraise: The Critical Milestones

Jacobsohn identifies three buckets that drive Series A fundraising timing:

1. Product development: Building the commercial-ready software
2. Team scaling: Hiring seasoned sales professionals and moving beyond founder-led sales
3. Compliance and operations: Achieving HIPAA compliance and implementing security protocols

"If you're raising Series A, that's really a scalable time… it's the next level where you can start to sign up a lot of customers," Jacobsohn explains. Plan for 12-18 months of runway with clear milestones.

"We don't want companies just to put a finger in the air and raise some amount because that's what's available… It really should be connected to the investment you need to make over that duration, and how you invest in getting to those next milestones," Levin noted. Thoughtful capital allocation shows discipline and realism.

Business Models That Work in Health Tech

The SaaS foundation
Traditional subscription models remain popular due to predictability and lower customer acquisition costs. Jacobsohn sees evolution in pricing:

• Usage-based pricing: Pay-as-you-use models that generate more revenue over time
• Value-based care alignment: Pricing tied to outcomes rather than flat fees
• Data monetization: Anonymized data as secondary revenue

The service component reality
Many health tech companies begin with significant human-in-the-loop components. This isn't problematic if there's a clear automation roadmap.

"We want to see that they've already started building that software... maybe it's 80/20 software versus services, but over the next year they're making that switch," he said.

Customer Strategy: Focus Before You Scale

Jacobsohn's strongest recommendation: customer focus. Rather than serving providers, payers, and patients simultaneously, dominate one customer type first.

"Go where the pain point is the biggest pain point to start with and it's the low-hanging fruit," he advises. Each customer type has different pain points, buying cycles, and sales processes. "It's three different businesses in one."

"Founders try to do too much in the beginning and they don't do well in anything," he cautioned.

This focused approach lets companies:

• Perfect product-market fit with deep customer understanding
• Develop repeatable sales processes
• Build strong case studies and references
• Allocate limited resources effectively

The Golden Rule: Solve Real Pain Points

Jacobsohn's most important advice: "Make sure there actually is a pain point… Is it nice to have or is it something you need to really kill the pain?" The classic vitamin-versus-aspirin analogy. Investors want aspirin-level urgency, not vitamins.

This requires thorough customer development research and market validation before approaching investors.

Pitch Deck Red Flags to Avoid

Jacobsohn's experience reviewing countless pitches reveals common mistakes:

Content issues:

• Unrealistic revenue projections (he's seen billion-dollar projections for three-year timelines)
• Insufficient market understanding or bottom-up market sizing
• Overly technical language and industry jargon
• Text-heavy content

Presentation quality:

• Spelling and grammar mistakes
• Poor formatting and blurry images
• Unclear value proposition on first slides

"This is your brand," Jacobsohn emphasizes. "You have to take the time... it shows me that you haven't taken enough time to do it right." With AI tools and design resources available, poor presentation quality is inexcusable.

Apply the "Mom Test." If your grandmother or fifth-grader can't understand your solution, it's too complex. Simple communication doesn't diminish technology sophistication—it demonstrates market readiness.

Don't include deal terms like SAFE vs priced rounds in your deck. It can turn investors off before conversations begin.

"We had a customer who showed [revenue projections of] $2 billion over two years without having raised institutional capital. On the flip side, we've seen decks that claim they need $100 million tomorrow. You don't want to shoot yourself in the foot in either direction — investors want stretch goals, but they also want rational models," Cole recalled.

Looking Ahead: Market Realities

Series A to B timelines have extended to around 30 months due to large rounds and stricter revenue requirements. "Companies are waiting longer to look for an exit," Jacobsohn notes. This means investors seek companies with strong fundamentals and clear paths to sustainable growth.

Key Takeaways for Health Tech Founders

• Team and traction both matter—ensure healthcare expertise exists in your organization
• Focus on one customer type before expanding to multiple segments
• Revenue or clear revenue indicators are expected at Series A
• HIPAA compliance is non-negotiable for digital healthcare companies
• Solve real pain points—vitamin solutions rarely get funded
• Present professionally—pitch quality reflects execution capabilities
• Plan 12-18 month runways with clear milestone achievement goals

The health tech funding landscape remains competitive, but companies demonstrating clear value propositions, strong execution capabilities, and genuine market pull continue attracting investment.

Jacobsohn's and Levin's insights provide a practical framework for building investor-ready companies—combining strong fundamentals with clear, compelling communication.

This article is based on insights from a Pilot webinar featuring Jason Jacobsohn from Propellant Ventures. Propellant Ventures invests in early-stage B2B companies across digital healthcare, FinTech, EdTech, supply chain, and future work sectors.