In our December webcast, an attendee asked us the following: “Healthcare is undergoing incredible change. You have companies that can provide innovative technology, but is that enough or do you also need market traction?”
In normal times, our reply would be that market traction was almost certainly necessary, but these aren’t normal times. With what is going on in the markets right now and with the tremendous disruption that is occurring in healthcare on an almost day by day basis, if there was ever a time to take a minimal or even zero revenue company to market and get an attractive valuation for it, that time is right now.
That said, if you don’t have market traction, you’re going to have to have some other assets to get over the first barrier of consideration—a competitive advantage that you’re bringing to the table, whether that is a strong patent position or a particular partnership or a way that you prove your value even before having market traction. You need something you can hang your hat on when making an approach or being approached.