What are health tech investors looking for these days? Thes VC experts weigh in. Photo via Getty Images

It's been a tumultuous year for health technology — and venture capital investment activity has definitely been affected. Looking toward the future, a group of panelists discussed how they are investing — and what they are looking for.

The panel, which was presented in partnership with the Houston Angel Network and Cooley for Houston Tech Rodeo, featured three investors:

  • Dennis McWilliams, partner at Santé
  • Terri Burke, venture partner at Epidarex Capital
  • Farzad Soleimani, health care partner at 1984 Ventures
Here's what these professionals consider when evaluating a potential deal.

A unique idea

The idea and solution of the med tech device or digital health company is of course of high importance for the investors.

"We really look for that unmet need. What is the innovative technology or med tech that's doing something different?" Burke says. "We try to find things that are breakthrough or disruptive that aren't one of six going after the same thing."

In light of COVID-19, the panelists discussed the advancement of remote care and telehealth. Another concern amid population growth is access to primary care doctors.

"Five years from now, we're going to be short like 60,000 to 70,000 primary care doctors," Soleimani says. "The only way we can close the gap is either to turn regular doctors into super doctors, and that's going to be driven by AI and data. ... Or, enabling other providers to act more like primary care doctors."

This type of innovation is top of mind for investors. What technology can help experts like pharmacists to provide care of this sort?

"We've seen a lot of investment going into enabling other providers to act as primary care doctors," Soleimani says. "They have the training."

A strong team

Much like startups, the people power the product growth. The panelists emphasized the importance of the potential team they'd be investing in, and it's something you learn over the diligence process.

​"You want to work with people you enjoy working with, so finding the right mix of people — whether we build it ourselves and help scale up a new company or a seasoned teams comes to us," Burke says.

For Soleimani, he is specific about making sure companies have someone in the CTO role — not just a part-time developer or contract worker.

"You need to have somebody who can build the technology — I cannot stress that enough," he says. "The process is arduous, and you're not going to get there overnight."

IP and regulatory process

Investors are looking to support protected technology, the panelists say, and most of the times they want an entrepreneur to start that process earlier than you might think.

"Investors actually care and care a lot and go pretty deep to make sure that something in the idea is protectable," Burke says.

The panelists also say they want a team that understands the regulatory process that will get the technology to scale. And investors aren't scared of investing in companies going down these paths.

"The regulatory process is often times misinterpreted — it can be your ally," Soleimani says. "Just because something needs to go through the regulatory process doesn't mean it is less attractive. It just has to be the right process for it."

McWilliams says a few years ago, maybe the process was more confusing, but nowadays companies are familiar with their options.

"For the most part, most devices know what the pathway is going to be," he explains. "If a team is telling you they don't really know what their regulatory strategy is, they probably don't know what they are doing or they don't want to tell you."

The panelists acknowledged that these regulatory processes can be costly, so factoring that into the equation is important. It's also a space where surrounding yourself with the right people is important.

"I think it's important to not only know your pathway, but also what it will take to prove that out," Burke says. "That's where physician advisers can be really valuable, as well as regulatory consultants."

The right valuation

Valuation is another factor investors consider — both valuations that are too high and too low.

"There's always this question of valuation and there's always this desire to maximize your pre-money valuation on a deal, and I would say that this can often times get you in really big trouble," McWilliams says.

Consider the market and where your company capitalization stands, McWilliams adds, and make sure there's always room on either side.

Ultimately, it depends on the investor

The panelists left the audience with advice for entrepreneurs to do their homework when reaching out to potential investors. Both what kind of companies investors fund as well as what stage they contribute to.

"It's important to know what type of investor you're speaking to," Burke says.

Starting those relationships with plenty of time is also important.

"It's hard to build a meaningful, lasting relationship with an investor if you're running of cash in two months and need a decision right away," McWilliams says.

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Houston startup raises $6M to scale home-based healthcare platform

fresh funding

As healthcare systems race to expand care beyond hospitals and into the home, investors are placing bigger bets on the infrastructure needed to make that shift possible.

This month, Rosarium Health announced it has raised $6 million in seed funding led by Kalos Ventures, with participation from ResilienceVC, Rock Health Capital, Symphonic Capital, Black Tech Nations Ventures and others.

The investment will help the Houston-based startup continue to build its platform, which features a national network of 800-plus clinicians and 3,000-plus contractors to coordinate home accessibility upgrades and modifications for seniors and people living with disabilities.

For founder and CEO Cameron Carter, the company’s mission grew out of firsthand caregiving experiences.

“From my own personal caregiving experiences, I realized that the benefits exist on paper, but not in reality,” Carter said in a news release. “Families are being left to figure out the paperwork and installations all on their own, which shouldn’t be how this works.”

While Medicare Advantage and Medicaid plans have expanded coverage for home-based services and accessibility modifications, the logistics behind delivering those services often remain fragmented.

Rosarium’s platform coordinates the entire process, from clinical assessments and referrals to contractor management, documentation, reimbursement and installation.

“A clinician can document that a home isn’t safe and a plan can approve a benefit, but there’s no one that’s responsible for making sure the work actually gets done,” Carter says. “We built the missing piece.”

The company was founded in 2021 as Rose Health and was a 2023 participant in the Texas Medical Center’s Accelerator for HealthTech program. It has scaled quickly, building a network of more than 800 clinicians and 3,000 contractors across 34 states.

Rosarium is currently in-network for 1.2 million Medicare and Medicaid lives, with projected coverage expected to reach nearly 4 million by the end of the year, according to the release.

“We’re excited to back Cameron because he and the team at Rosarium are building the infrastructure healthcare needs right now to make the home a safe and comfortable place of care,” Kate Ballinger, investor at Kalos Ventures, added in the release.

As part of the recent investment, Ballinger will join Rosarium’s board of directors.

With eyes on the future, Rosarium plans to grow its partnerships with Medicaid and Medicare Advantage plans, including CalViva and Community Health Plan of Imperial Valley, strengthening its presence in California while expanding access to underserved communities.

Additionally, Carter predicts that home-based healthcare will be part of a broader transformation happening across the industry.

“There’s a growing recognition that health outcomes are shaped by what happens in the home,” he said in the release. “The future of healthcare isn’t just treating people after something goes wrong. It’s creating environments that help prevent those problems in the first place.”

Houston business mogul Tilman Fertitta acquires Caesars in $17.6B deal

Money Moves

Houston billionaire Tilman Fertitta may currently be serving as America’s ambassador to Italy, but his company is as busy as ever. Fresh off its move to revive the Houston Comets WNBA franchise, his company, Fertitta Entertainment, has announced a $17.6 billion deal to acquire Caesars Entertainment, Inc.

Speculation about the deal has been circulating since at least March, according to various media reports. The deal combines Fertitta’s well-known Golden Nugget casino brand with all of the properties in the Caesars’ portfolio, including Las Vegas hotels Caesars Palace, Harrah's, Paris Las Vegas, Planet Hollywood, Horseshoe, The LINQ Hotel, Flamingo, and The Cromwell.

Overall, the combined company will include 60 domestic casino resorts and gaming facilities; online gaming including sports betting, iCasino, and Caesar’s online poker platform; retail sports betting at over 200 third-party locations through the William Hill brand; and over 550 Fertitta Entertainment outlets, including more than 450 Landry's full-service restaurants across America. The companies will combine their loyalty programs, Caesars Rewards, Golden Nugget's 24 Karat Select Club, and Landry's Select Club.

The terms will see Caesars’ shareholders receive $31 per share. Fertitta Entertainment will also acquire approximately $11.9 billion of Caesars' outstanding debt.

The transaction will be financed through a combination of equity contributed by Fertitta Entertainment, assumed Caesars' debt, and new committed debt financing arranged by a group consisting of 10 banks. It is subject to approval by Caesars’ shareholders and government regulators.

Fertitta Entertainment is the Houston-based company behind a diverse array of hospitality businesses, including The Golden Nugget, The Post Oak Hotel, River Oaks District, the Kemah Boardwalk, and Houston’s Downtown Aquarium.

It also operates a number of prominent restaurant brands, including Mastro's Restaurants, Del Frisco's Double Eagle Steakhouse, Morton's The Steakhouse, The Palm, McCormick & Schmick's, Landry's Seafood House, The Oceanaire Seafood Room, and Saltgrass Steak House.

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This article first appeared on CultureMap.com.

4 Houston-area institutions get $8M for cancer research facilities

fighting cancer

Cancer research capabilities in the Houston area just got an $8 million boost.

On Wednesday, May 20, the Cancer Prevention and Research Institute of Texas (CPRIT) awarded $8 million in grants to institutions in Houston and Bryan for the creation or expansion of so-called “core” cancer research facilities.

“Core facilities provide shared access to advanced technology, equipment, and scientific expertise that may not be available at every institution,” CPRIT says. “These core facilities are vital to not only cancer research but also to the study of diseases beyond cancer.”

Houston-area recipients of these $2 million grants are:

  • A facility at the University of Texas Health Science Center for preclinical support of cancer researchers in Texas to evaluate new safe, effective drugs and drug combinations.
  • The Accelerator for Cancer Therapeutics, operated by Houston’s Texas Medical Center Foundation. The accelerator helps researchers and startups move innovative cancer treatments from the lab to clinical trials.
  • Rice University’s Genetic Design & Engineering Center in Houston. The center enables researchers to collaborate on studies of custom DNA for cancer treatment.
  • A facility at the Texas A&M University System’s Health Science Center in Bryan that aims to speed up the development of cancer therapies.

In addition to those grants, the University of Texas M.D. Anderson Cancer Center, Methodist Hospital Research Institute, Baylor College of Medicine, and Rice University shared $21 million to recruit cancer researchers from other institutions.

The largest of those grants—totalling $4 million—went to M.D. Anderson for the recruitment of renowned cancer researcher Andre Nussenzweig from the National Institutes of Health. His research focuses on how DNA damage and faulty DNA repairs lead to cancer.

Here are the totals for the other CPRIT grants awarded in the Houston area:

  • $12.8 million to Houston-based Indapta Therapeutics for the development of an off-the-shelf therapy that naturally kills cancer cells, combined with an immunity-targeting agent for a type of leukemia.
  • $11.1 million to MD Anderson, including $5 million for a statewide platform to improve long-term health outcomes in adolescents and young adults who survived cancer.
  • $8.4 million to Baylor College of Medicine, including $4.8 million for two training programs for cancer researchers.
  • $6.25 million to UT Health Houston, including $4 million for a biomedical informatics and genomics training program for cancer researchers.
  • $4.4 million to the Texas A&M Health Science Center’s Houston campus, including $2.4 million for a cancer therapeutics training program.
  • $2.75 million to Rice, including $250,000 for a study of ovarian cancer.
  • $2 million to Houston-based March Biosciences for the development of a targeted therapy for treating T-cell lymphoma.
  • $1.15 million to the University of Houston, including $900,000 for a platform for detection of lung cancer.
  • $900,000 to Texas A&M in Bryan to conduct clinical drug trials in rural and underserved communities around the state.
  • $800,000 to Houston- and Israel-based Xerient Pharma for the development of an oral form of a cell-protecting drug called amifostine to protect the upper GI tract from radiation damage during pancreatic cancer treatment.
  • $659,000 to Missouri City-based OmniNano Pharmaceuticals for the development of a two-drug combination to treat the most common form of pancreatic cancer.
  • $250,000 to the University of Texas Medical Branch at Galveston for a novel therapeutic to prevent colitis-related colorectal cancer.