Last week on Closing Time we talked about M&A in digital health, how we saw 23% YoY dip in 2023, and what’s in store for 2024. Today we’re going to talk about another type of ending for a company, and that’s a wind down.

The majority of startups fail, but we don’t talk enough about how to conduct an orderly wind-down. In this episode, we tackle the challenging decision of when and how a founder should wind down their startup (yes— there’s a right way to do it). 

We delve into legal responsibilities under Delaware and California law, key strategies for an orderly wind-down, and setting yourself up for success next time.

In 2023, digital health M&A was down 23% YoY. How did this compare to the tech sector? What are digital health acquirers looking for today? And what will 2024 have in store for us? We dive into all these questions and more in this episode about M&A.

Here is the link to the blog post Selling Your Healthcare Startup that is mentioned in this episode.

In this episode, founder Jenna Xu pitches her vision for massively more accessible mental healthcare, starting with sleep. Docbotic uses clinically-proven therapy bots available over SMS and WhatsApp. Their first product is Sleepbot, a 4-week text messaging program that is “monumentally helpful to having the most meaningful night's rest”.

In this episode, ALS patient Brian Wallach and his caregiver wife Sandra Abrevaya pitch their virtual clinic for neurodegenerative diseases, Synapticure. Led by neurologists, behavioral health providers, and care coordinators, Synapticure has served over 1,500 patients since launching 18 months ago.

In this episode, serial entrepreneur (3x exited) Dr. Giovanni Colella pitches his fifth healthcare startup — and this time it’s personal. Vanna Health is reimagining care and community for people with serious mental illness.

Focused on the most vulnerable and overlooked patients, Giovanni believes in the psychosocial rehabilitation model bringing together community inclusion and the social dimension of care. But how does this scale? And what’s the end goal?

Towards the end of the episode, we also discuss actionable advice for founders on taking funding from strategics, including the scoop on warrants. Here’s the list of healthcare CVCs Halle shared.

In Part II of our series on term sheets, Closing Time co-hosts Halle Tecco and Michael Esquivel unpack "clean” and “dirty” terms in startup financing. 

With the pressure to maintain high headline valuation numbers, investors often grant founders their desired valuations while sneaking in terms that our resident lawyer Michael does not like. 

The episode breaks down the nuances of terms like liquidation preference, liquidation multiples, cumulative dividend structures, anti-dilution provisions—and the trade-offs founders must consider between valuation and terms. 

In Part I of our series on term sheets, Closing Time hosts Halle Tecco and Michael Esquivel tackle the reverberations from the term sheets of yesteryear. With the generous valuations and optimistic multiples of 2021—many startups now find themselves struggling to justify these figures in the current economic climate. 

The hosts delve into the nuanced reality of flat and down rounds, dissecting their implications for founders and investors alike. They posit that while no one truly wins in a down round, it's a shared and necessary hurdle in the long race of business growth. Addressing the trend that "flat is the new up," they emphasize the importance of clean terms during down rounds, and suggest strategies to minimize the impact on employee morale and equity.

After her own mental health crisis, founder Sophia Pages set out to create culturally centered care options for Latine patients struggling with moderate to severe mental illness. With her startup Charla House, she now offers a virtual intensive mental health program for this population. 

Sophia is early in the journey and looking for a co-founder. Listen in to hear why guest investor Cheryl Cheng of Vive Collective thinks she should skip the VC funding, and what Sophia should do instead.

Visit the Closing Time website for more.

After a career dedicated to health access for vulnerable populations, from communities in Appalachia to Kenya, this year Peter Park decided to co-found Alchemy Health. Alchemy builds and operates in-house pharmacies for safety net providers leveraging the 340B program. In just a few months, they’ve onboarded one clinic and have six more in the works. 

Our guest investor in this episode is Elana Berkowitz, a Managing Partner at Springbank Collective. Disclosure: Elana and Halle are both investors in Alchemy.

Visit the Closing Time website for more.

A two-time digital health founder, Pelu Tran is on a mission to use AI to reduce the impact of medical errors, modernize quality improvement, and improve patient outcomes. His company, Ferrum Health, works directly with hospitals and clinics, serving as a middleware layer that everyone seems to be missing. With over 60 AI vendors, and a number of leading health systems on board, he aims to build the Plaid for healthcare AI.

Our guest investor in this episode is Jeff Hammerbacher, long time angel investor, data scientist, and a Board Member at DataVant, PerkinElmer, and Emids.

Visit the Closing Time website for more.