Each venture capital firm has its own due diligence process, usually involving analysis from multiple perspectives — including industry positioning, market trends, financial status, and business models — often supplemented with professional expert opinions.

This article, published by BE Health Ventures, is presented in two parts to provide insights for startup founders.

• Part I explains how investors assess technical due diligence.
• Part II will focus on evaluating the product development process.

Joseph Shen, Senior Medical Affairs Manager, BE Health Ventures

Technical Feasibility

The first step of due diligence is assessing technical feasibility — whether the proposed technology is supported by existing evidence or literature, and whether it truly addresses a defined clinical or operational pain point.

Investors will look into:

• The technological evolution and problem it aims to solve.

• The current development stage and market gap.

• Whether the proposed technology provides a real competitive barrier or differentiation.

The next layer of analysis focuses on engineering feasibility — whether the team possesses sufficient infrastructure and technical capability to realize the technology.
For example, remote healthcare applications may require 5G connectivity, while image-guided surgery systems need established imaging infrastructure.

A viable technology must also be proven in safety and performance.
Medical innovations must demonstrate evidence of safety and effectiveness, often through preclinical testing or verification reports. These data significantly enhance investor confidence.

In addition, investors review risk assessments provided by the company — to confirm that potential risks introduced by the new technology have been comprehensively evaluated and that mitigation strategies are in place to reduce risks to acceptable levels.

Before engaging investors, startups should have a solid understanding of how technical due diligence works.

Strength of Intellectual Property Protection

A core component of technical assessment is IP protection. Investors will examine:

• Whether the technology infringes on any existing patents (via an FTO: Free-to-Operate analysis).

• Whether the startup’s own technology is patented, and if those patents are granted or pending.

• Whether the patent jurisdictions align with the company’s target markets.

Startups should be able to present patent certificates or filing documentation and explain the strategic logic behind their IP portfolio.
A clear and well-aligned patent layout not only strengthens defensibility but also signals maturity and foresight in product planning.

Technical Differentiation and Clinical Value

To evaluate the uniqueness of a technology, investors compare it against competitors’ solutions to understand its advantages and differentiating factors.

Before commercialization, startups should perform predicate comparisons, such as using FDA databases to analyze existing products, their intended uses, indications, and specifications, and then design their own regulatory and verification strategies accordingly.

From a clinical standpoint, even within the same indication, there may be multiple treatment approaches — for instance, medication, embolization, traditional surgery, or minimally invasive procedures can all treat uterine fibroids, each with different costs and outcomes.

The critical question for investors is:

What is the unmet clinical need, and how directly does the startup’s technology address it?

Startups should validate their claims through interviews with physicians, researchers, and industry experts, helping investors quickly grasp the clinical relevance and real-world feasibility of the technology.

Ultimately, the problem your technology solves should clearly translate into tangible value — such as:

• Reducing clinician workload and labor costs.

• Enhancing surgical accuracy and reducing medical errors.

• Improving diagnostic precision and lowering patient mortality rates.

Investors seek technologies that are “must-have”, not just “nice-to-have.”

For more information, please contact: Joseph.Shen@be.tworg.app