Scaling Up: Essential Steps for SaaS Startups to Prepare for Their Next Investment Round Before Entering the U.S. Market
As the world's largest healthcare market, the USA offers as much potential as it does complexity for startups looking to make their mark.
Simply having an innovative product is not sufficient. Instead, startups must strategically position themselves to attract investment and build a sustainable business.
Preparing for your next investment round involves a multifaceted approach that involves a deep understanding of market dynamics, customer needs, and compliance with healthcare regulations.
The startups that do announce new investment rounds are also run by capable teams that can execute their vision based on a prudent go-to-market strategy.
This article will explore these critical steps in detail and offer tips to help healthcare startups looking to scale in the U.S. market.
Refine Your Business Model
To ensure your product stands out, it’s essential to first refine your business model.
Consider these pointers that build credibility with investors:
Identify your unique value proposition (UVP). What differentiates your product from those of the competition? What unique benefits does it offer? Keep it simple and focus on clarity, not cleverness.
Develop a scalable business model. Is there potential to expand your operations and increase revenue with minimal incremental cost?
Conduct market research. Utilize surveys, focus groups, and industry reports to determine whether there’s demand for your product.
Strengthen Your Financial Foundation
A solid financial foundation is also vital. It not only adds further credibility to the business case but also promotes informed decision-making.
Some core actions to focus on include:
Optimize financial statements and identify trends in revenue growth, expense management, and profitability. Above all, use accounting software to minimize errors and present clear, accurate data.
Develop a financial forecast. Equal parts art and science, a financial forecast demonstrates the growth potential and operational viability. Investors tend to assess unit economics—which measures profit on a per-unit basis—to determine whether a business is economically sustainable.
Prepare for due diligence. Investors will also conduct an exhaustive due diligence process before they commit funds, so ensure that all relevant documents and records are organized in advance.
Build a Strong Team
A strong team has the best chance of turning the founder’s vision into reality.
From the investor's perspective, however, a capable team increases the likelihood of a return on their capital.
To help investors feel confident that you’d make sound decisions with their money, consider these steps:
Address any gaps in the team’s skills and expertise. Early-stage startups can increase their credentials if one employee has previously secured funding or navigated a successful exit.
Hire individuals with industry experience-especially important in the complex healthcare industry.
Be able to demonstrate resilience and cohesion. How did the team overcome obstacles in the past? Do they communicate well and share similar values?
Develop a training program. This equips the team with the skills they need to navigate the market and deal with key business functions such as sales and customer success.
Develop an Extensive Go-to-Market Strategy
A well-defined go-to-market (GTM) strategy is a foundational element of scalability. From market research to marketing campaign execution, the GTM strategy offers a framework for sustainable growth.
The four primary elements of the strategy are as follows:
Ideal customer profile (ICP) and market segment. In healthcare, the latter can be segmented by solution type, deployment model, or end-user.
Unique value proposition (UVP). What makes your start-up special? It could be unique capabilities, specialized equipment, or customer/patient experience delivery.
Distribution channels. How will your ideal customers find you and buy from you?
Marketing mix. This encompasses how you communicate your UVP and persuade the ideal customer to buy. Start with the 5 Ps of marketing— product, price, place, promotion, and people.
Protect Your Intellectual Property
As you prepare for investment and market entry, protection of your intellectual property (IP) becomes essential.
File trademarks, copyrights, and patents online at the United States Patent and Trademark Office, while trade secrets should be protected by non-disclosure agreements (NDAs).
Investors look favorably at start-ups that take early measures to protect their IP. Protection of key assets may help your startup establish a competitive advantage—but it also demonstrates a commitment to innovation and growth.
Ensure U.S. Regulatory Compliance
Compliance with U.S. regulations is non-negotiable for healthcare startups.
Familiarize yourself with the Health Insurance Portability and Accountability Act (HIPAA) for handling health data. If your product falls under the medical device category, it is also important to understand FDA requirements.
Non-compliance can hinder your market entry as well as lead to revenue loss, substantial fines, increased audit costs, and reputational harm.
To avoid these unpleasant scenarios, develop a clear strategy for managing compliance and ensure all employees understand their obligations.
Additional Considerations
Aside from key financial, product, and strategic preparations, there are other factors to consider when preparing for an investment round.
These include:
Network, network, network. Ask for advice from startups who have walked in your shoes or seek out recommendations from a well-connected advisor.
Create a pitch deck. Components include problem statement, solution overview, market analysis, business model, competitive landscape, team overview, GTM strategy, financial projections, and proof of traction (if applicable). Conclude with a funding ask and CTA.
Consider market differences. If your home market is not the United States, consider how differences in time zone, culture, currency, and language may impact your preparation.
Scaling for Success in the U.S. Market
To attract investment and build a sustainable business, startups must refine their business models, strengthen their financials, and ensure compliance with U.S. regulations.
A capable, GTM strategy and protected IP are also crucial to convincing investors that your startup is ready to scale.
When you proactively address these areas, you not only build trust with investors but also increase your odds of success in the world’s largest healthcare market.
Ready to scale and attract new investment? ABIG Health can show you how. Backed by extensive knowledge and expertise, our marketing services help you overcome common barriers to scaling and position your venture for sustainable expansion.
References
https://mercury.com/blog/understanding-unit-economics
https://www.actioniq.com/blog/the-five-ps-for-executing-a-successful-marketing-plan/
https://www.uspto.gov/trademarks/apply
