Healthcare products generally take longer to move from concept to the marketplace than do those in other industries. That requires more funding for startups to survive until they reach greater maturity. So many accelerators are beginning to put in six-figure investments to give their companies a larger financial cushion while they wait to become viable businesses.
The report counts 87 accelerators in the U.S., predominantly in California and New York, with Massachusetts and Texas lagging behind. The vast majority of those accelerators, the report said, are new themselves. They are focusing primarily on digital health, that is, the provision of healthcare services through software.
But despite the strong growth in the number of accelerators, many interviewees quoted in the report expressed skepticism about the effect of the accelerators. Basically, there is too much money chasing after viable new healthcare tech ideas, which means money is being thrown at concepts that have little chance of reaching fruition.
“There is an oversupply of programs with few real successes,” one interviewee said. Two other interviewees criticized accelerators for producing firms that have “too many redundant ideas.” As such, one of them said that accelerators dilute “talent and bandwidth and capital.”
The report suggested accelerators should focus on specific areas—such as specific conditions, like cancer—within the broad world of digital health. The entrepreneurs best-served by accelerators, the report says, are those that are outsiders to the healthcare system, or those that have a definite prototype or proof-of-concept, but don't necessarily have connections or funding.
Follow Darius Tahir on Twitter: @dariustahir