Advantages and Disadvantages of Healthcare Investing

Matt Eitner, as chief executive officer at Laidlaw & Company in New York, has contributed greatly to the expanding healthcare investment landscape. As a part of his initial plan with the company in 2015, Matt Eitner is in step with investments in the evolving health care landscape. Health technology has always been profitable, but today’s healthcare landscape promises investors both advantages and disadvantages.

One notable advantage is the opportunity for companies to focus on research and development. The environment is such that investors can raise more money with many seed- stage investments resembling Series A funds. With more money raised and more focus placed on research and development, venture capitalists can develop relationships and attract more investors.

The appearance of the healthcare start-up has made investing in this sector advantageous as well. With a smaller company, investors have the chance to assess its potential for growth. Moreover, investing in a start-up can be leverage for negotiating commercial deals later.

Certain areas in healthcare are also ripe for investment. For example, immuno-therapy is hot right now, but investing does not come without caveats. Some of the more common obstacles are the expensive price tags and ethical dilemmas related to high deductibles. However, these issues can be addressed if the start-up plans for reimbursements early.

Alternatively, there are a few disadvantages as well. Overvaluation of many start-ups is one of them, which inevitably ends up with the venture shutting down. Finally, another disadvantage is the potential conflicts of interest where commercial rights are concerned if payers and providers take equity funding.