Chris Johnson

The Signal Every Investor Should Pay Attention To When leading Silicon Valley investors like Vijay Pande (formerly of a16z Bio + Health) and Zack Werner launch a new firm—VZVC—focused exclusively on AI in healthcare, it’s not a coincidence. It’s a signal. A signal that elite capital is doubling down on healthcare AI in 2025, that the market sees real scalability at the intersection of automation, intelligence, and patient impact, and that the next generation of value creation in healthcare will come from AI-enabled efficiency and insight. Mission 3A HealthTech sits precisely at this intersection — where technical innovation meets real-world execution. We believe there is no better investment opportunity than healthcare AI. The sector combines long-term demand stability with massive efficiency gaps — and AI is finally capable of bridging them. As investors chase the next wave, we’re already ahead of it: identifying, validating and investing in these cutting edge companies. We are partnering with surgeons and health systems, and commercializing solutions that drive measurable impact. #HealthcareAI #VentureCapital #Mission3A #DigitalHealth #AI #MedTech #Startups #HealthcareAI #DigitalHealth #MedTech #Mission3A #VentureCapital #AIHealthTech #HealthTechInvesting #ArtificialIntelligence #StartupFunding #FutureOfHealthcare Tempus AI insitro Freenome Stryker PathAI Apple Butterfly Network, Inc. Lyten Medtronic Orthofix Treace Medical Concepts, Inc. Forma.ai Smith+Nephew Vizai Engineering OWKIN Kevin Cordell Trey M. Matt Hostetler Greg Berlet Patrick Fisher https://lnkd.in/eSmCCf_E

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DCVC is thrilled to be partnering with the founders of Proxima, Zach Carpenter and Luca Naef, as well as Zak Kanter and the whole team at the company, to make biomolecular interactions programmable. DCVC led the $80M Series Seed financing at Proxima, our largest TechBio investment to date for any investment through Series A, along with NVIDIA NVentures as well as Magnetic Ventures, who both partnered with DCVC previously at Relation.

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From the outside, venture looks like a game of picking “winners”. From the inside, it’s a game of returning the fund. I put together a short overview of the 3 numbers that actually matter for LPs: flop rate, DPI, and why one company must be able to pay back the whole fund.

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Some quick and candid / not just bullish observations on AI in digital health, especially given the enormous level of noise at #JPM2026. Last (5th) post in the 5-on-5 series, opening 2026 with 5 different pieces with 5 observations each on the market for digital health founders. We are passed the hype phase. I actually think 2026 will be the year when saying 'AI' or 'Agentic' will raise more questions than applause. Too many pilots are not scaling, too many promises are yet to be fulfilled. When building a product takes less time, the path to commoditization also takes less time. Scribes, chart summarizations, etc. which leads IMO to NRR being much more important than ARR (show you are resilient to price pressure and churn) Most real impact of AI is on the back end of new companies. This is massive and hence any budget that looks similar to 2023 / 2024 or even 2025 budgets should render a very serious question As a byproduct, and unlike 2021, increased head count becomes a negative signal if the company is indeed AI-centered (proxy to inefficiency) And another key difference from 2021: raising a lot of money (with a big valuation) while the public market is at best open for high 9-digit revenue, is really playing very aggressive poker. For additional color, see this interview with CTech by Calcalist (first comment)

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10 Key Factors for HealthTech and MedTech founders to consider in today's M&A market environment (Part 2) 6. Alignment with Value-Based Care (VBC) 🤝 Healthcare is shifting from fee-for-service to VBC. Companies that enable this transition (e.g., remote patient monitoring, population health, chronic disease management) are strategically valuable to payers and providers. Founder Focus: Frame your solution in terms of how it reduces costs and improves patient outcomes, directly supporting a VBC model. 7. Scalable Processes and Management Team Depth 👥 Buyers assess "key person risk." Over-reliance on the founder for key client relationships or daily operations raises concerns about post-acquisition sustainability. Founder Focus: Build a strong second-tier management team and document repeatable Standard Operating Procedures (SOPs). Prove the company can run and scale without the founders' constant involvement. 8. Interoperability and Data Monetization Strategy 🔗 The ability to seamlessly integrate with Electronic Health Records (EHRs) and other systems (interoperability) is crucial. Companies with clean, actionable data that can be ethically leveraged (monetization) command higher multiples. Founder Focus: Prioritise API development and integration capabilities. Demonstrate a clear, compliant strategy for how your data creates additional value. 9. Customer Concentration and Acquisition Costs (CAC) 🎯 High customer concentration (revenue dependent on one or two clients) signals a major risk to a buyer. Low Customer Acquisition Costs (CACs) are a key profitability driver. Founder Focus: Diversify your customer base to reduce concentration risk. Optimize your sales and marketing process to prove an efficient, scalable, and low CAC model. 10. Understanding Alternative Deal Structures 💰 To bridge valuation gaps between buyers and sellers, alternative structures are becoming common. These include earn-outs (additional payments based on future performance) and royalty/licensing agreements. Founder Focus: Be prepared to negotiate a portion of your deal value into an earn-out structure, especially if a buyer is cautious about future revenue projections. This shows confidence in your team and product's future performance. To discuss how Nelson Advisors can help your HealthTech or MedTech company, please email lloyd@nelsonadvisors.co.uk

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