Is Your Women's Health Business Venture-Backable?

Part one of a three-part founder's guide to financing your women's health startup

Women’s health founders face a double whammy: less than 5% of digital health venture dollars go to women’s health startups, and women-led companies receive just 2% of total venture dollars. Spotlighting these overlapping problems is essential, but the attention has fueled a fundraising-first mindset that may be doing more harm than good.

Too often, women’s health founders over-index on raising venture capital:

→ at the expense of figuring out business fundamentals (like, who will pay)

→ too early, or from investors that are not well-matched to the business

→ for a business that might not even be venture scale

And when a founder in this space struggles to secure venture funding, the narrative often centers on sexism while business fundamentals go unexamined. Yes, bias and double standards are still, sadly, real and persistent—but they’re not the sole reason for the funding gap. Overlooking whether a business is genuinely venture-scale does a disservice to founders and funders alike. Both things can be true and need to be named to move the women’s health category forward.

This framework is built on our own hard-earned lessons

We are two founders, investors, and advisors to top venture-backed companies in women’s health, including Maven, Tia, Origin, and Conceive. This topic is personal; we’ve experienced the pitfalls of this fundraising-first mindset, and see other early-stage founders fall into the same trap. For every 10 emails we get asking for fundraising help or VC intros, one or two seek assistance building the business. For women’s health to succeed, this dynamic must flip. So we’ve come together to share what we wish every early-stage women’s health founder knew in those formative days—starting with reflections from our journeys.

“As a women’s health founder, female founder, and first-time founder, I had three strikes against me that made raising capital challenging. So, I became obsessed with breaking through—and I did just that. But in hindsight, I raised too early, which was costly when I pivoted from a digital women’s health app to a tech-enabled services business with physical walls and doctors. If I knew then what I know now, I would have built and capitalized Tia very differently.”

— Carolyn

“I founded a startup and raised capital (and am still an operator at heart), and have spent a decade investing, so I’ve been on both sides of the table. Right now, I see too many companies focused on a narrow slice of the market without a clear path to profitability or a problem space too small for venture to fund. Fundraising is time and soul sucking, and every minute you spend chasing the wrong money is a minute wasted versus running your business.”

— Leslie

From these hard-earned lessons, we’ve created a three-part guide for women’s health founders to navigate early-stage financing. We aim to debunk the myth that there is one right way to finance or build your company, and help you ask questions to determine what’s right for your business.

Here’s how this series breaks down:

• Part I: Is your women’s health startup venture-backable?

• Part II: Questions every women’s health founder should ask before raising venture capital (when, how much, from whom?)

• Part III: Building your women’s health business without venture capital

(Spoiler alert: Venture capital is not the only—or best—path for many companies!)

We’ll drop new editions on Tuesdays for the next two weeks, so hang tight. In the meantime, forward this to a founder friend so they can follow along, and get your questions and notes ready for us.

Part I: Is my idea venture-backable?

Too many founders skip over this essential question. As a first principle, a women’s health business is venture-backable if and only if it has the potential to drive venture-scale returns. In short, the investor math has to work.

So, what is “investor math,” exactly? 🤔

Depending on the fund size and stage, VCs must hit a high return on a single “outlier” investment to return money to their investors. Yes, investors have investors, too; they’re called “LPs” or Limited Partners. Early-stage VCs are targeting a 20-100X return (or more). Growth stage is more like 3-5X. These outlier—or winning—investments must compensate for the others in their portfolio that didn't pan out.

To have a shot at those returns, investors need to get a meaningful ownership stake—at least 10-15% at seed—and strive to maintain it through pro rata investments in subsequent rounds to counter dilution. While there is no single formula, most early-stage VCs need to believe that your company can reach a minimum of $100M in revenue and $1B+ in enterprise value.

Put simply, your idea must be a big swing. It has to be large and disruptive enough to shake the “niche” label that plagues many women’s health businesses. A personal connection may help attract angels, but pulling at heartstrings won’t get an institutional VC to write a big check. Demonstrating market opportunity—and solid business fundamentals—does. That means showcasing how your business can materially improve margins, revenue, and outcomes (ideally, all three), and do so with meaningful scale.

Timing also matters. Deeply. Consumer demand, tech innovation, policy, payment, and capital markets must all align to make this the right time for your business to exist.

As Deena Shakir, General Partner at Lux Capital and proud investor in companies like Maven, Alfie, and Adyn, puts it:

“There's nothing fundamentally unique about women's health in the VC math equation. The comps are indeed more limited—though frankly, that's true across much of health tech. This creates an even higher bar to prove your big swing can truly be a category creator. Investors need to see that your vision isn't just solving a problem, but creating an entirely new market segment. And sometimes, that's as much about timing as it is about having the right team.

Your business needs to demonstrate not just passion and purpose, but how it can materially improve margins, revenue, and outcomes at a scale that makes institutional VCs see beyond any "niche" label. Remember: they're looking for that outlier that returns their entire fund!”

— Deena

The investor math isn’t personal—it’s portfolio strategy. So if you’re considering raising venture, go in with eyes wide open and develop your own conviction: can your business be the one that returns the fund?

7 questions to ask yourself before you raise venture:

1. Market size | Are you going after a market in the billions (not millions)?

Yes, women control 80% of the U.S. healthcare dollars, but what share of those dollars are you realistically going after? No one will believe you can capture 75% of the market, so going after a piece (closer to 5-10%) of a huge market matters.

Example: the U.S. menopause market is projected to reach $24B by 2030 (this is enticing). By comparison, the postpartum nutrition market is ~$500M (this is “niche”).

2. Growth potential | How fast can you grow revenue?

Growth looks different in SaaS, services, and medical devices—but velocity matters in all models. A substantial year-over-year increase in revenue signals strong product-market fit and scale potential.

Example: A company growing from $1M → $3M → $9M ARR over three years has a compelling “venture-style” growth story. A business flat at $1.5M ARR for two years—even with strong retention—may raise concerns about market ceiling or pricing power.

3. Scalability | Can you grow without costs increasingly linearly?

A common trap in digital health is building models that work well at small scale but become resource-intensive when expanded. VCs are looking for leverage: can you grow revenue significantly without growing headcount, infrastructure, or cost of care at the same pace?

Example: An AI-enabled virtual care model that allows each clinician to serve 10–20x more patients has a clear path to scale with limited incremental cost. In contrast, a clinic-based model may deliver high-quality care and drive strong outcomes, but typically demands more time and capital to scale at venture pace.

4. Tech leverage | Does tech meaningfully improve your margins (not just your product)?

In today’s market, it’s not enough for technology to enable your business; it needs to drive real operating leverage that is visible in your P&L.

Example: An AI-powered diagnostics platform that reduces clinician time by 80% and drives software-like gross margins >70% is meaningful tech leverage that’s exciting to VCs. A sexy app that improves the patient experience but adds no real margin won’t earn you many points.

5. Payment | Who pays for your product? And how much?

These are the most fundamental and non-obvious questions every healthcare founder needs to answer—and especially those building in women’s health given the notoriously low reimbursement rates for women’s health providers and services. You can read more on the dismal reimbursement rates in Leslie’s previous piece on Second Opinion.

Whether your customer is a consumer, payor, employer or health system, your answer to “who pays and how much” impacts your margin, but also your go-to-market motion, scalability, regulatory complexity and more.

Example: An at-home hormone testing company selling directly to consumers for $199 per kit may benefit from faster early adoption, stronger brand affinity, and cleaner unit economics—but must build trust, manage CAC, and navigate consumer price sensitivity. Contrast that with an insurance-based model where the same test is reimbursed at $50–$75—offering broader access and repeat testing potential, but often requiring complex coding, preauthorization, and integration into clinical workflows. Both paths are viable, but come with very different trade-offs.

6. Differentiation | How is your approach and product fundamentally different from what’s out there?

Venture capital is designed to fund outliers—not slight variations on existing ideas. Are you creating a new market? Leveraging a new technology? Offering a dramatically more scalable, accessible, or affordable solution than what’s in the market today?

Example: A company using AI to deliver personalized PCOS treatment plans across 50 states with virtual care, remote monitoring, and insurance coverage has venture-scale potential. A local PCOS nutrition coaching practice with 1:1 sessions—even if clinically excellent—is not venture-scale. The difference lies in distribution, scalability, and defensibility.

7. Timing & Founder Fit | Why now—and why you?

The best businesses seize tailwinds, often on the precipice of mega technological, cultural, or policy shake-ups. What has changed in the world that makes this idea viable now? And why are you the person uniquely positioned to bring it to life?

Example: Startups that launched virtual care platforms in early 2020 rode the telehealth reimbursement wave from Covid and wouldn’t have been viable two years prior.

Answering these questions isn’t just key to a successful raise—it’s key to building a successful business. If you somehow raise venture capital without pressure-testing your idea against these criteria, only to realize your business isn’t venture-scale, you’re in for a world of hurt. Trust us—you want to avoid that scenario.

Okay, now what?

If working through these questions leads you to a clear yes, my women’s health business is venture-scale!…
👉 You’re ready for Part II, where we’ll deep dive into planning your raise, tackling when to raise, how much, and from whom. That post drops next Tuesday, so stay tuned!

If you’re leaning toward no—or you’re not sure yet…
👉 That’s ok! That’s not a red flag. It might mean you’re building a great business that simply isn’t a fit for the venture model right now (or maybe ever). That’s okay. In Part III, we’ll discuss alternative ways to fund and grow your company without VC.

Remember, venture capital is one fuel—not the only one. What matters most is aligning your capitalization strategy to your business, goals, and mission.

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This post is Part I of a three-part series by Carolyn Witte and Leslie Schrock co-published on Second Opinion and The XX Factor to help women’s health founders raise money in the rapidly growing but still nascent women’s health category. Our goal is to offer a practical, founder-first framework to help you decide if, when, and how to raise venture—and what to do if that’s not the best path for you.

If you found this guide useful, click the ❤️ or 🔄 button so more people can discover it on Substack. Even better, drop a comment and let us know what resonated, what questions came up, and what else you’re looking to learn.