Key Takeaways:
- Talk to users early: Validate assumptions through real customer interviews.
- Regulation sets the pace: Align product timelines with approvals and compliance.
- IP is strategy: Protect innovation thoughtfully and cost-effectively.
- The Nordics are attractive: Smaller population, but high healthcare spend and innovation-friendly systems.
- Team commitment matters: Investors prioritize dedicated leadership and execution capability.
- Plan finances carefully: Milestone-based budgeting builds credibility and prevents costly funding gaps.
- Earn investor trust: Show clear milestones, realistic assumptions, and disciplined capital use.
Many startups believe they understand their target market. What signals tell you that founders actually don’t know their real buyers yet?
Lilian: In many cases, the first red flag is when users, payers and other stakeholders are mixed up. When founders misidentify who pays and who actually uses the product, it’s a clear sign they don’t fully understand their market.
The second signal is when they can’t name their TAM, SAM SOM and the key numbers. If they show no understanding of total addressable market figures and what part of the market is realistically accessible for their solution, it indicates they haven’t done the homework. Of course, market definition and thus the numbers can be somewhat assumption based, therefore subjective, but without a clear concept of market structure, it becomes obvious.
Finally, if they haven’t actually talked to customers, they’re operating only on assumptions. I always ask, “What kind of customer interviews did you conduct so far?” If the answer is none, or ‘my friend who’s a doctor, said…’ that’s a strong indicator they don’t really know their market.
When a healthtech startup wants to enter a new region like the Nordics, what are the biggest assumptions founders usually get wrong?
Lilian: The biggest assumption founders make when entering the Nordics is that the market isn’t fragmented, so it’s only one step. It actually is fragmented, though in a sense it is not as much because the “rules of the game” are fairly consistent across the region, and trust plays a huge role. If you get credentials in Sweden, the probability of acquiring a customer in Finland is very high, and vice versa.
Another misconception is that the Nordics aren’t a significant market. People often underestimate it because the population is smaller than in countries like Germany. But if you look at how much of the GDP is spent on healthcare, you realize it’s a good target. Unlike in other countries, hospitals and public healthcare are reliable payers and there’s a strong openness to innovation through test beds and innovation-friendlier procurement processes. That makes the Nordics attractive despite perceptions that it’s a lot of work.
A final assumption to watch out for is that any company, including non-EU companies, can easily enter. Geopolitical tensions have changed that. I believe, after the Trump administration’s actions around Greenland and Denmark, Nordic governments will now prioritize European and even more Nordic solutions over non-EU or UK alternatives when similar offerings exist. This is an important reality to communicate to potential entrants.
Founders often treat IP as a legal exercise. From a business perspective, what should they really be thinking about early on?
Lilian: Yeah, a couple of things. The most important point is that IP is strategy. It’s key for defensibility. Whenever investors analyze a deep tech business, like health tech or med tech, they look not only at the roadmap and the team but also at how defensible the technology is. Know-how alone can be good, but if it’s reverse-engineerable, it may not enough to attract investment. Strong IP, including patents, trademarks, copyright and design protections, provides the layers of defense necessary. A medical device often has six or seven layers of IP. Without this defensibility, any tech giant could replicate your work quickly, so IP is your leverage to protect your position in the market.
Timing is also critical. Teams and accelerators often pressure founders to patent early, but early patenting is rarely best strategy in medtech. Patents become public after 18 months, which means anyone could start working on a workaround. The goal is to align the patent publication with product launch and regulatory approvals like the CE mark or FDA clearance. Otherwise, you could disclose your product details before you’re able to sell.
Finally, cost is a major consideration. Maintaining multiple patents is expensive each patent lifecycle in medtech can cost around $250K. Early patenting often leads to follow-ups to cover forgotten features, and a portfolio of five to eight patents can strain a startup’s resources. Some VCs may like a large portfolio as it looks good, but they also need to evaluate whether it’s financially sustainable. So, the strategy is to file thoughtfully, prioritize what truly matters, and align it with your product and market timing.
AI is now everywhere in healthtech conversations. Where do you see it genuinely creating value, and where is it mostly hype?
Lilian: AI is capable of genuinely create value everywhere. The real question isn’t where it can create value, but where regulation already allows that value to be realized. In many areas, the technology is ahead of the regulatory environment. That’s why medical imaging is often highlighted. AI tools are already relatively common there, and they’ve proven both clinically and financially that they add value. Because of that, they’ve gained a level of acceptance within healthcare systems.
There are many other areas where AI could be extremely useful, for example, planning personalized cancer therapies or identifying optimal combination treatments. Technically, AI is already capable of supporting this kind of work. However, medications are approved for specific use cases, diseases, and diagnoses, which means you can’t simply give a patient a treatment combination suggested by an AI system.
So, when we assess the real value of AI in healthcare, the limiting factor is rarely the technology itself. I strongly believe that well-governed AI can create value across the entire healthcare system. The real question is how quickly regulation and legislation will evolve to allow these tools to be integrated into everyday clinical workflows.
In highly regulated sectors like healthcare and pharma, how can startups move fast without ignoring regulatory realities?
Lilian: That’s a very good question. The truth is, in regulated sectors, startups cannot move faster than regulatory timelines. If they appear to, it’s often a sign they’ve overlooked or deliberately misrepresenting something important. Accepting that regulated sectors won’t create super early revenues is the first step towards success.
One approach is to separate lifestyle health applications from hardcore MedTech. Lifestyle apps like food tracking, fitness, or pregnancy tracking staying on the educative side don’t require heavy regulatory work, even if marketed as health-related. Hardcore diagnostics and therapeutics always need regulatory clearance, and product launch timelines are tied to that process. The good news is that specialized MedTech funds understand this. A common challenge rather is dealing with generalist VCs who don’t realize that MedTech startups rarely have early revenue streams; you can’t sell a product before clearance. These VCs may chase shiny trends, but the solution is to focus on investors who understand the sector, even if they’re harder to access.
Another key point is the VC fund lifecycle, typically 8-12 years. Hardcore MedTech startups often cannot exit within that timeframe. A startup funded in 2026 may only be ready to exit after CE marking or Series B long after the fund started. That’s why in MedTech honest company valuation may matter more than early exits: the portfolio company’s value counts, even without a liquidity event.
So, while the regulatory journey is long, it’s manageable. The key is aligning with the right investors and recognizing that speed is relative to compliance, not just product development. Fear only arises with stakeholders who don’t grasp this reality.
What are the most common red flags investors see in early-stage healthtech companies before deciding not to engage?
Lilian: Commitment is a major one. In early-stage health tech, many people assume the key factor is the technology, but it surprise, it usually isn’t. Investors really look at the team, they have to. If there’s no clear plan for who will take on the key roles particularly the CEO and CTO that’s a major red flag. They also want to see access to senior talent needed early on. If the key personnel aren’t in place and in reality the founders intend to continue focusing mainly on their academic or clinical careers, investors are unlikely to move forward. In that case, the project may be better suited for a venture studio first, rather than raising investment immediately.
** **Are there any common pitfalls you see with MedTech startups seeking funding?
Lilian: Not one, many! One key issue is financial planning. Lately I’ve had the impression that healthtech and MedTech funds often deploy only a very small portion of their total capital initially, leaving a larger portion unused. For example, a €100 million fund might invest only €30 million at first, not calling down 70%. Why? Because many spinout startups are unable to follow their own financial plans and often need top-ups before reaching the next funding round. This means money sits idle, which is inefficient and slows funding for other startups.
The key to getting funded today is having a credible, detailed, milestone-based financial plan. If a VC sees that your plan is realistic, they know you won’t return midway asking for an unexpected €600K. Poor financial planning not only creates delays but also increases legal costs, since the cap table and funding agreements may need renegotiation.
That’s why I offer workshops to help MedTech startups prepare financial plans that VCs can trust. Sometimes this results in a larger initial ask, but it’s far more credible and fundable than a small, unrealistic budget. For example, I’ve seen startups budget just €50K for full CE marking and FDA approval, when realistically, they’ll need at least €300K or even more, depending on the starting point. A solid financial plan helps unlock the funds already available and ensures the startup can scale without repeated top-ups.
If a founder has strong technology but limited business experience, what should they prioritize first to build credibility with partners and investors?
Lilian: The most effective approach is to hire a CEO with a strong network in the relevant area. In rare cases, a researcher or clinician founder may be able to fully transition to represent the company, but usually it’s more practical to bring in someone with the right business skills and network.
** **How important is customer validation in early-stage healthtech startups, and what role should clinicians play in the team?
Lilian: Customer validation is absolutely critical - without it, things just won’t work out. I myself committed this crime back then with one of my own companies: the system worked perfectly, and on paper adoption looked great, but users didn’t want to adopt it because it added a couple of two extra clicks and required a separate authentication gate. Simply put, no adoption. Clinicians in the team are helpful, but it’s rare they can really commit to the company given their other responsibilities. Having clinicians on the board can work well if they provide meaningful guidance at least few times a year, otherwise they are just doctor decorations. The most effective approach is continuous, relenteless customer interviews: literally asking users what their problem is, how they currently solve it, and who actually solves it. Sometimes it’s an assistant, not the doctor that’s what really matters. In short, customers are everything.
Is there anything else you believe healthtech founders should understand early in their journey, but often realize only much later?
Lilian: There are many things, but it’s a process. First, it’s completely normal not to know exactly where you’ll end up eight years later. Innovation is iterative, and iteration is part of the game. Walking into the unknown is not for the faint hearted and definitely not for control freaks.
Some of the most expensive early mistakes come from getting hyperfocused on the tech and not even trying to defining the real life use cases of your product. You could spend hundreds of thousands of euros obtaining regulatory clearance for a use that can’t actually be sold. Early on, the team needs to think like the user: get close to customers, understand what they’re doing, and identify concrete use cases suitable for regulatory approval. Another critical lesson is understanding the status quo. Healthcare is massive and entrenched; a solution that is only slightly better but adoption is costly isn’t enough. Doctors and hospitals have limited time and resources, so any new solution must provide a clear, significant improvement over the current system.
Founders also often confuse R&D with operations. Running a lab is not the same as running a company. Early-stage startups may have a high R&D ratio 60-80% is normal, but eventually, operational efficiency must dominate. Treating a company like a lab and expecting investor funds to behave like academic grants is a common cause of failure. Investor money must be managed as a business, not burned like grant money. Finally, timing matters across all fronts: business strategy, IP strategy, and regulatory strategy need to be aligned. It’s never too early to consider regulatory requirements or set up a quality management system, even before the company officially exists. Misalignment in these areas is one of the most expensive mistakes a startup can make.
R2GConnect: Thank you very much for the insights, Lilian.
If you are building a healthtech startup and want to strengthen your IP, investor readiness, and fundraising strategy and / or plan to enter the Nordics, explore these special offers from Targenta Oy:
- Free Workshop | Build a VC shortlist that can actually invest your case - learn more here
- Validate Nordic Market Demand Before You Expand (Founder-Led Interviews) - learn more here
- Investor Readiness Sprint: Turn Your HealthTech Into a Fundable Case (2–4 Weeks) - learn more here
- IPR Readiness Sprint - learn more here