Savana’s Fundraising Reality Check: Why VC Timelines Don’t Match Healthcare Innovation

Savana’s Fundraising Reality Check: Why VC Timelines Don’t Match Healthcare Innovation

Savana has raised $44 million. By venture capital standards, that’s a successful funding story. But in a recent episode of Category Visionaries, Ignacio Medrano, Founder and Chief Medical Officer of Savana, offered a warning that cuts against the typical fundraising narrative: traditional VCs and healthcare innovation timelines are fundamentally misaligned.

For healthcare tech founders, this isn’t just about managing investor expectations. It’s about recognizing that the standard venture capital model—built for software companies that can scale in three to four years—breaks when applied to an industry where validation takes a decade.

The Math That Doesn’t Work

The tension isn’t subtle. It’s basic arithmetic that doesn’t add up.

“Maybe so that I can give something more specific that many other people from other sectors could talk about with regards to fundraising. I can talk about healthcare fundraising,” Ignacio begins. “And what I mean by that is that the pace is lower so it’s very regulated. Cultural change needs time. And even if your tool is great, it’s going to need time.”

Traditional venture capital operates on a specific timeline: invest in Year 1, see rapid growth in Years 2-3, achieve returns by Years 4-5 through an exit or continued growth. This model works beautifully for SaaS companies selling to enterprises where the main friction is sales execution, not market readiness.

Healthcare doesn’t work that way. “It’s what happens with drugs, right? We have incredible new drugs that would save lives. And even when that’s the case and it’s lives of people, what is at stake, it takes 10 years to validate them through the proper workflow circuitry.”

Ten years. Not for a slow, inefficient process that could be optimized. Ten years for the proper validation that healthcare requires even when lives are literally at stake. If drug development—where the incentives are maximally aligned toward speed—takes a decade, why would healthcare software be faster?

The Mismatch Nobody Talks About

Ignacio is careful not to criticize the VCs who invested in Savana. “These people, normally they need return in three years, four years, and I mean, they have great intentions, they always want to help, they love healthcare and we got really good help from our VCs. I have nothing against them, nothing to complain about them.”

But good intentions don’t solve structural misalignment. “But thinking about how they can feel about us, you know, at the end of the day, for us and for any company in healthcare, it’s very difficult to give returns. And in that amount of time you normally, you need longer.”

This is the quiet tension in healthcare venture capital: investors who genuinely want to help but are trapped in a fund structure that demands returns faster than the industry can deliver them. The result isn’t malicious pressure—it’s structural frustration on both sides.

VCs invested in healthcare companies watch their portfolio companies progress technically, achieve regulatory milestones, and build impressive technology. But the hockey stick growth they’re looking for in Year 3 or 4 hasn’t materialized yet because the market infrastructure for rapid adoption simply doesn’t exist yet.

Why Healthcare Is Structurally Slower

The timeline mismatch isn’t about execution—it’s about how healthcare fundamentally works.

Regulation creates mandatory delays. Even when technology works perfectly, regulatory approval processes take years. Clinical validation requires trials. Privacy compliance requires extensive infrastructure. These aren’t inefficiencies to be disrupted—they’re safeguards that exist because healthcare failures kill people.

Cultural change requires generational turnover. Ignacio’s insight about cultural evolution isn’t metaphorical. “The pace is lower so it’s very regulated. Cultural change needs time.” Healthcare professionals spend years in training that reinforces specific practices and epistemologies. Changing those practices doesn’t happen because a startup proves their software works—it happens when a new generation of professionals enters the field who were trained differently.

Organizational infrastructure takes years to build. As Savana learned painfully, you can’t sell software to buyers who don’t exist yet. When you’re creating a new category in healthcare, you’re not just selling software—you’re waiting for organizations to create new roles, new budget lines, new decision-making processes. That’s not a sales cycle problem. It’s an organizational evolution problem.

Scientific validation operates on research timelines. The machine learning algorithms Savana builds today won’t be truly validated for another five years. “The machine learning AI algorithms that we’ve been creating for five, 10 years, five years from now, will be finally validated with clinical trials and everything,” Ignacio predicts. “Something that we don’t have today, but we’ll have it in five years.”

You can’t accelerate scientific validation through better execution. Clinical trials take the time they take. Peer review operates on academic timelines. Healthcare doesn’t trust promising results—it trusts validated results.

The Strategic Question

This timeline reality creates a strategic question that every healthcare founder must answer before raising venture capital: “So that’s something that you may want to think about before fundraising.”

The question isn’t whether you can raise money. If you have promising technology and early traction, you probably can. The question is whether the expectations embedded in that capital match the timeline reality of your market.

Traditional VCs aren’t wrong to expect returns in three to four years—that’s how their fund structures work. They have Limited Partners who expect specific timelines. They have portfolio construction strategies that assume certain failure rates and certain success timelines.

But healthcare companies that need seven to ten years to reach their full potential will inevitably disappoint investors expecting returns in four. That disappointment creates pressure: pressure to pivot to faster-growing adjacent markets, pressure to oversell near-term progress, pressure to make strategic decisions optimized for short-term metrics rather than long-term market development.

Alternative Funding Strategies

Ignacio doesn’t prescribe a specific alternative, but the implications are clear. Healthcare founders need to either:

Find specialized healthcare VCs who understand these timelines and have structured their funds accordingly. These investors exist—they’re typically former operators who’ve lived through healthcare’s long cycles and have convinced their LPs to accept longer time horizons.

Consider alternative capital structures like revenue-based financing, strategic corporate investors, or grants that don’t carry the same timeline expectations as traditional VC.

Build a business model that generates enough revenue early to sustain the company through the long validation period without requiring additional rounds that mark down valuation or create misaligned expectations.

Be radically transparent with traditional VCs about timeline reality, potentially structuring deals with longer expected holding periods or milestone-based expectations that match healthcare’s actual pace.

The Principle: Match Capital to Market Reality

The deeper lesson extends beyond healthcare. Any market with structural reasons for slower scaling—regulated industries, government contracting, scientific validation requirements—faces this same mismatch.

The principle isn’t “avoid venture capital” or “healthcare is too hard.” It’s “match your capital structure to your market’s actual timeline.”

“For us and for any company in healthcare, it’s very difficult to give returns. And in that amount of time you normally, you need longer. So that’s something that you may want to think about before fundraising,” Ignacio emphasizes.

This isn’t pessimism—it’s realism. And realism about capital-market fit is just as important as realism about product-market fit. You can have breakthrough technology, a massive market opportunity, and incredible execution. But if your capital structure expects returns in four years and your market needs seven, you’ve built in structural tension that will create problems regardless of how well you execute.

Savana raised $44 million and survived the long timeline. But Ignacio’s advice to other healthcare founders is clear: think carefully about whether your investors’ timeline expectations match your market’s reality. Because in healthcare, even when lives are at stake, proper validation takes the time it takes. No amount of capital or execution changes that fundamental truth.