July 29, 2025
Article
What Every Healthcare Startup Needs to Know About Valuation

Overview
Nell Smircina of Novastone Capital Advisors and Vivian Cervantes of CORE IR explain how founders should approach valuation and why getting it wrong can cost you more than funding.
Your Company’s Valuation Impacts Your Funding, Equity, and Growth
Valuation is more than just a number for healthcare startups. It is a story about the company’s potential to bring a new solution to market, both the risks in getting there and the rewards. Depending on your company’s stage, strategy, and who’s telling its story, valuation can change dramatically.
“Valuation looks different for an early-stage company versus a company that’s more established because in its simplest form, it’s just the price that the market is going to put on the company at this given day,” Nell Smircina, DAOM, Search Fund Principal at Novastone Capital Advisors, told Cure.
Valuations for established companies are based more on the company’s track record than its growth potential. In contrast, valuations for early-stage companies are less about revenue and more about their perceived potential in consideration of your technology, data, team, and vision.
“But with early-stage companies, it’s also going to reflect what founders give for funding and what investors expect on exit,” Smircina said.
Overestimating or underestimating your company’s value can impact funding outcomes, equity stakes, and investor expectations in ways that last far beyond the next round.
Vivian Cervantes, Senior Vice President of Healthcare for Investor Relations at CORE IR, said valuation is composed of two things: qualitative factors and quantitative factors.
For example, qualitative factors include founders’ track record with prior startups, possible intellectual property creation or regulatory strategy. Measurable quantitative factors can be the basis of financial modeling on the company’s potential, such as R&D spend, addressable market size, and clinical trial milestones. A strong management team and geographic exposure can add value, whereas tariff issues with the cost of supplies or tools may decrease value.
“You can add, divide, multiply, subtract, [to] come up with a number, but at the end of the day, you’ve got to wrap some fuzziness around it because it is the combination of the two that creates the total value of a company,” Cervantes told Cure.
10 Factors that Create Value
While valuation may be based on different factors depending on the company’s healthcare subsector or stage, the status of the following 10 factors frequently helps investors know what your company has done and why it’s a worthwhile investment.
Funding, cash on hand, or revenue
Management and scientific teams
Stage of clinical development and quality of data
Peer-reviewed articles and backing by academic institutions
Partnerships with pharmaceutical companies, research institutions, or health systems.
FDA approval strategy
Patents, Duration of IP exclusivity, and freedom to operate
Size of total addressable market
Pricing and reimbursement forecast
Why Does Valuation Matter?
Particularly in healthcare or in biotech, valuation can affect funding before commercialization or revenue.
“If you have a valuation that’s too high on the early end, it can easily backfire. Or if it’s too low, it can unnecessarily dilute things for the founders early on. So then the founders aren’t going to have a meaningful stake as the company continues to grow. Investors are using valuation to underwrite risk and look at future returns,” Smircina said.
Cervantes warned against rushing into valuation. She said to think of it as a combination of art and science.
“I would take the time to study and thoughtfully go about the process. As an investor, note that there is the efficient capital markets theory, where the current share price is considered to reflect available information,” she said. “So, unless you have conviction that there is something missing that could create an opportunity down the line--whether to buy, sell, or hold--I would take the time to do your diligence and get comfortable.”
Startups that grasp valuations can better find opportunities, react quickly, protect their upside, and limit their downside, she added.
“Now, if you are a C-level executive, it’s helpful to have advisors because when you’re looking to value your company, you triangulate around several factors, such as the public markets, transactions, and even private markets, and there is the narrative around those too that is helpful to consider,” Cervantes said.