To raise or not to raise capital?

Jose A. Vidal
Published in
4 min readApr 29, 2024


The healthcare industry, in any of its facets: pharmaceutical companies, biotechnology, healthcare technology, medical services, predictive and preventive models, the entire ecosystem is in an incredibly interesting, fluid global moment, where uncertainty rules, and where everything changes and evolves rapidly.

The decision to raise capital is crucial for any emerging or growing company, especially in the healthcare industry. There are strong arguments both for and against this strategy, and to make the best decision, it is essential to understand the pros and cons.

Raising capital can provide a company with the financial resources necessary to grow rapidly. In the healthcare industry, where innovation and expansion are crucial, access to capital can make the difference between success and failure.

The raised capital can be allocated to research and development (R&D), allowing the company to develop new products and services, be competitive, and adapt to healthcare sector regulation. According to a Deloitte report, biotechnology companies invested an average of 21.6% of their revenue in R&D in the last year, with a total of over $107 billion invested in research and development worldwide.

Having additional capital can help the company attract and retain quality talent and acquire cutting-edge technology. This is especially important in a sector where technological innovation can make the difference.

Similarly, raising capital can allow a company to expand internationally, reaching new markets and increasing its potential customer base. Doctolib, an online medical appointment management platform, raised 85 million euros in a funding round months before the pandemic. This capital allowed them to expand beyond their local market in France and become European leaders in their segment.

But let’s look at the negative aspects that raising capital could have, founders may lose part or most of the control over the company. Investors may impose conditions and decisions that are not aligned with the company’s original vision. This can lead to conflicts of interest and a lack of flexibility in making strategic decisions.

Investors often expect a quick return on their investment, which can put excessive pressure on the company to deliver short-term results. In the healthcare industry, where product development cycles are often long and results may take time to materialize, this pressure can be especially detrimental

Raising capital often involves indebting the company and committing to repay that capital with interest in the future. If the company fails to meet its growth targets or generate enough revenue to cover its expenses, it may face serious financial problems or even bankruptcy. It is important for founders to carefully consider these factors and seek professional advice before making a decision.

A prominent example of the risks of raising capital in the healthcare industry is the case of Theranos. The company, which promised to revolutionize the blood testing industry with innovative technology, raised over a billion dollars in venture capital. However, its technology turned out to be faulty, and the company was embroiled in a fraud scandal, leading to its bankruptcy and the indictment of its founder, Elizabeth Holmes, for criminal fraud.

From my personal experience, after analyzing the pros and cons of raising capital, often essential for scaling, there is always a question, applicable also to other areas of your life…

By whom?

Javi López started this conversation on X about accelerators, some months ago, and it sparked a very interesting conversation, which partly has a lot to do with this process.

The correct choice of an investor, group of investors, or accelerators, can cause the perfect alignment between founders and investors, or, on the contrary, you may find yourself faced with conditions imposed by the last ones, leading to a gradual breakdown of trust and the total deviation and loss of focus on the business, causing chaos in the medium to long term.

So, regardless whether we do it or not, if you are starting a business and thinking about scaling, pay close attention to who you raise capital with, research, delve deep, audit, and know the track record of those investors well before it’s too late.

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Jose A. Vidal