I think having a longer runway is particularly relevant in digital health where capital is required to persevere through a) regulatory challenges and b) evidence generation for value-based care. But, there is no getting away from the fact that within each early-stage company, there will be extra money for teams to say "Hey, you know that product feature or special project we never had the money to spend time on? Well now we do." More capital increases the number of experiments, but it also enables bigger, more ambitious experiments. And, the graph you shared shows that the size of fundraising rounds are increasing faster than the total number of deals, reflecting the increase in growth rounds. Venture-backed companies that show evidence of 'product-market fit' and go on to raise big rounds will likely be encouraged to focus on growth. As you mentioned Nikhil, money may flow into sales & marketing, but critically some should also flow into product & engineering aka research & development. “The oversupply of capital tends to be a good thing for innovation. Running larger experiments + cash to survive long enough to provide evidence My thoughts + original post here.Īnswers were split about 50-50 into good or bad with most people saying it’s complicated. Here are some of my favorite answers from my question on whether there was too much money going into digital health too quickly.
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