Part II: Game Planning Your Women’s Health Venture Raise

When to raise? How much? From whom?

This post is Part II 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.

ICYMI, Part I covers the foundational question: Is your business venture-backable? We break down what VCs look for, why “investor math” matters, and how to pressure-test your business model against those expectations.

And if you’re not an XX Factor subscriber yet, now would be a great time to sign up!

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Welcome to Part II of our women’s health capitalization series.

If you read Part I and said, “Yes, my business is venture scale,” it’s time to plan your raise.

In an ideal world, every founder would answer these questions—when to raise, how much, and from whom—in sequential order. In practice, however, raising money is more circular than linear.

Fundraising is a “dance,” and the push-and-pull between founders and funders shifts dramatically depending on the market and macro dynamics at play. For example, right now, a tariff-induced downturn causes turmoil up and down the chain—from LPs to VCs to late-stage companies awaiting an IPO and early-stage founders, too.

Regardless of macroeconomic factors or whether you’re chasing capital or capital is chasing you, internal clarity is your greatest advantage. The more thoughtful you are about what you need and when you need it, the better positioned you’ll be to find the right investor-founder-business match. Remember, it’s a marriage!

#1: When should I raise?

Generally, we’re biased towards waiting to raise an institutional round (aka a priced round led by a VC firm) for as long as possible. This may seem counterintuitive, but it’s usually in your best interest as a founder.

Why wait?

• More proof = more leverage. More traction (paying customers, engagement data, early product-market fit) gives you more negotiating power regarding valuation, board construct, and other deal terms.

• Pivoting early is advantageous. Some of the most successful businesses in the world went through major pivots. But pivots can be challenging and expensive with a bloated cap table. It’s easier to course-correct early with a small budget and then raise more money to scale with conviction.

• Clarity drives capital efficiency. The more you’ve proven out, the clearer your next milestone becomes, which helps you target the right raise and investors that will help you get you where you need to go.

But, beware of the “proof trap.”

In our experience, women’s health founders are often held to a higher bar for evidence and traction. This can lead to oversharing data, which can paradoxically work against you. Investors don’t want to see the sausage being made—they want to see a clear, compelling, investable story. Raise when you can show traction and a clear trend line, not activity.

What qualifies as enough proof?

• Strong early engagement or retention

• Demonstrated willingness to pay; this can be an LOI for a B2B contract, or CAC tests for D2C plays

• Clinical validation or expert endorsements

Exceptions to the “wait” rule:

• You’re first to a space, and speed is your moat

• You’re seizing a hot-off-the-press, structural tailwind—like a new reimbursement opportunity or a regulatory shift

• You’re a second-time or very seasoned founder with a clear GTM plan

Convertible Notes/SAFEs can be a useful stepping stone

If you’re a firm “yes” to the venture-scale question, but aren’t ready for a priced round, a Convertible Note or SAFE (Simple Agreement for Future Equity) is a useful tool. These financing instruments let you raise capital from both early-stage VCs and angels, while deferring valuation discussions until later, when you (ideally) have more traction and leverage. Using a SAFE also minimizes legal overhead and cost by using standard, off-the-shelf documents like Y Combinator’s SAFE financing documents.

SAFEs are a great way to get early believers on your cap table, including women’s health-focused funds who may be highly aligned with your thesis but don’t have the fund size to lead a priced round.

Our recommendation: Don’t get hung up on exotic terms, and avoid stacking multiple SAFEs with different terms, which can complicate a future priced round. All investors should get the same terms. This route aims to get quick capital from early believers so you can stay focused on building, not cap table gymnastics.

#2: How much?

Raise enough to reach your next milestone with some buffer, but not so much that it pressures you into premature scaling. A good rule of thumb: aim for 18-24 months of runway + ~20% cushion for the inevitable unknowns (the product hiccup, regulatory surprise, or bad hire).

Common mistakes to avoid:

• Raising too much, too soon, and overspending ahead of product-market fit. This often leads to “shiny object problems” that can distract you from the laser focus needed to prove the most important things in the early days of a business.

• Raising too little and running out of money just as you start figuring things out. This can result in dilutive bridge financings or the increasingly common “second seed” round.

In short, don’t focus on raising the biggest number possible, hoping for a TechCrunch feature. Instead, raise the right-sized round for your business—enough to fund meaningful progress, but not so much that it forces you into premature scaling or making short-sided business decisions to grow into sky-high valuation expectations (see: 23andMe for a cautionary tale).

#3: From whom?

All money is not created equal. In our view, who you raise money from matters as much, if not more, than valuation. Investors become part owners of your company; they’ll shape your board and cap table, influence strategy and future hires, impact subsequent fundraising rounds, and sometimes have the power to fire you. Choose wisely.

What to suss out:

• Domain expertise: Do they understand the intricacies of your business? Tactically, how can they help you progress towards your next business milestones—whether that’s closing new enterprise deals, navigating regulatory complexity, or building an executive team?

• Stage fit + fund dynamics: Do they usually invest at your stage, or is this a “toe-dip” or tracking check? What’s their fund size and expectations? Do they have dry powder to support you in later rounds or a downturn?

  • Smaller funds may be more patient, but still need to return 10x+ over 7–10 years

  • Larger funds often require $1B+ outcomes on a 5–7 year horizon, and may prioritize speed and scale

• Style: Are they hands-on or off? Collaborative or directive? Do they coach, challenge, or micromanage? There’s no single “right” style here, but alignment on approach and expectations matters—especially with your lead investor.

Do your own diligence!

• Talk to founders they’ve backed—especially those whose companies didn’t work out

• Ask how they support founders beyond capital—and be clear about the support you are seeking

• Probe into how they’ve shown up on a founder’s worst day, not just their best

Key considerations and watch-outs:

Capital intensity

It’s important to consider the long-term capitalization needs of your business, even in the early days, as it can impact the dilution calculation for both you and your investors and the whole “who, what, when” equation described above. For example, a software-only business typically requires far less capital than a services business with four walls, large clinical teams, and equipment costs. The type of investors best suited for a pure tech play vs. a brick-and-mortar play are pretty different, too.

We spoke to Aike Ho, partner at ACME Ventures, about this, who has backed both virtual and hybrid care delivery businesses (including Tia), and shared:

“One reason brick-and-mortar and care delivery startups are tough for venture to fund is that they need a lot more capital than software-only plays. The more subsequent capital a company needs, the more it dilutes my ownership stake. For example, if I expect to be diluted 50% in future rounds for a typical software company, that number is often much higher for businesses operating in the real world.”

— Aike Ho

While it’s difficult to perfectly estimate how much outside capital you’ll need to scale your business as an early-stage startup, it’s a worthwhile exercise to invest in a long-range capitalization plan (e.g. 5+ years)—especially if you’re building in capital-intensive categories like clinics, hardware, or those requiring lengthy regulatory approval.

As a best practice, revisit your long-term capital plan annually and before every fundraise. Cap table math aside, it can be a valuable tool for you as a founder to lift your head from the day-to-day grind and ask yourself:

• How much more capital will I need?

• What will that capital unlock?

• And what will it cost me—in dilution, control, and pressure to scale?

The party round

It sounds like a good time, but trust us—it’s not. A party round is when several funds contribute equivalent amounts, with no lead investor that sets the terms. Sometimes, it happens because no one fund can write a big enough check since many of the funds that invest early on in women’s health are on the smaller side. Ultimately, however, it leads to a dynamic where no one has enough skin in the game. Best practice (unless there is no other way to keep the lights on) is to have a true lead that takes 50% or more of a round and a second or third major investor at most, or co-leads who each have a 10% ownership to make it worth their while.

The optics of your cap table

We wish we didn’t have to say this, but here it is; all-female cap tables and boards are powerful—we’ve been a part of them. But sometimes, they can work against women founders. As Leslie covered in a previous piece, female-backed female founders can struggle to raise later-stage funds from new investors, as a homogenous cap table can (incorrectly) signal that the investment was based on gender instead of merit.

Vice clauses

Some funds (especially those backed by religious or sovereign wealth LPs) can’t invest in specific sectors; sometimes sexual wellness and more specifically contraception and abortion can get lumped in here (don’t ask us how many times we’ve had to explain the difference between Plan B and medication abortion). If your company touches these areas, ask directly up front. These “vice clauses” are often buried in fund documents and can derail a deal late in the game.

Finding the right “yes”

Raising capital isn’t just about getting to “yes”—it’s about getting the right “yes,” at the right time, on the right terms from the right investors. The more clarity you have around when to raise, how much, and from whom, the better positioned you’ll be to build something enduring—not just fundable.

But what if venture isn’t the right capitalization path for you, today or maybe ever?

In Part III (dropping next Tuesday), we’ll explore alternative paths to building and scaling without VC—from bootstrapping to grants, angel rounds, and accelerators.

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