A few months ago, a well-connected investor sent me a deal for a surgical device with a proprietary safety feature. U.S. Food and Drug Administration (FDA)-cleared. Strong intellectual property. Thousands of units sold. Multiple institutional backers across several rounds. The investor who referred it had taken a company to a NASDAQ initial public offering and was putting in his own money.

On paper, this was exactly the kind of deal most investors would jump at. I passed in 11 days.

A bit of context. I am an internal medicine-trained physician-scientist who spent years publishing research, over 100 peer-reviewed papers including in the New England Journal of Medicine, before transitioning into full-time health care venture capital. Over seven years, I have evaluated hundreds of health care startups and made over 20 investments alongside a network of 200 plus physicians. That experience distilled into three questions that now drive every investment decision I make.

Question 1: Would the end users actually change their behavior?

This is not the same as asking “is there a market?” What I want to know is whether the people who would actually interact with this product, physicians, hospital administrators, or patients, would change what they are currently doing. For physician-facing products, the question is whether the clinician would alter their workflow for it. For hospital-facing products, it is whether administrators feel enough operational pain to navigate procurement. For patient-facing products, it is whether patients would adopt a new behavior and sustain it, especially if they are paying out of pocket. Each stakeholder has a different threshold for change. And the only way to test it is to put the product in front of them.

For that surgical device, I sent the materials to five specialists who perform these procedures daily. The feedback was unanimous, and it was not what the pitch deck suggested. The clinical problem the device addressed was real but overstated. Specialists told me the risk was already manageable with existing technique. One mentioned that his institution had trialed a similar product and ultimately went back to their standard equipment. The company’s growth thesis depended on expanding into adjacent surgical applications. Every specialist independently said there was no realistic clinical pathway to that expansion. The existing operating room ecosystem, where devices, software, and accessories come bundled from a single manufacturer, was too entrenched for a single-feature product to displace.

No financial model would have surfaced this. Five clinicians saw it immediately.

An important distinction here: I am not disparaging this company. The team is doing hard, innovative work to advance surgical care. The product genuinely works. But venture capital is unpredictable, and one of the hardest lessons I have learned is that a good product and a good investment are not the same thing. A device can be clinically valid, technically impressive, and still face an adoption curve that makes it a difficult bet at a given valuation. Physicians are trained to evaluate whether something works. Investors have to evaluate whether it will be adopted widely enough to generate returns. Those are two separate lanes of thinking, and learning to hold both simultaneously is one of the most important skills in health care investing.

Question 2: Will stakeholders validate this with their time or capital?

There is a spectrum of conviction. A physician who says “that sounds interesting” over coffee is offering a polite opinion. A hospital administrator who agrees to a pilot is giving you something more valuable. And a clinician who reviews the deal and writes a personal check, that is the strongest validation signal I have found.

I once evaluated a health tech company building a product for hospital operations and compliance workflows. I took the concept to 17 frontline health care professionals, physicians, nursing managers, chief nursing officers, and supply chain leaders. Every one validated the need. That cross-stakeholder validation, from bedside to back office, told me the adoption path was real. The company went on to land multiple health system contracts.

More recently, I evaluated a therapeutic being developed at a major academic medical center. More than 10 specialists reviewed the opportunity. Six committed their own capital as co-investors. Those physicians did not just validate it, they became embedded in the product’s future adoption pathway. When the people closest to the problem are willing to back it with their time, their reputation, and their money, you have something real.

Question 3: Does the evidence survive rigorous clinical scrutiny?

Most investors evaluate clinical data the way a layperson reads a headline, look at the conclusion, skip the methodology. Physicians are trained to do the opposite. When I review a startup’s evidence, I am asking the same questions I asked as a principal investigator on over 65 research projects:

• What is the study design?
• Is the sample size adequate?
• Are the endpoints clinically meaningful or statistically convenient?
• Would this data survive peer review?

The surgical device I passed on had a published study in a respected journal. The data was technically sound. But the endpoints measured device performance, not clinical adoption. The study showed the product worked. It did not show that surgeons needed it. Again, a valid product, but the evidence did not support the financial thesis.

The critical gates of health care investing

Clinical diligence is gate one. It is not the only gate. These three questions represent the first and most critical gate in evaluating any health care company, the clinical gate. If the people at the point of care do not need it, will not use it, or are not convinced by the evidence, nothing else matters. But clinical validation alone is not sufficient. After clearing the clinical gate, a company faces two more.

The regulatory gate asks whether the product can actually reach the market, navigating FDA pathways for drugs and devices, or hospital information technology security and compliance standards for health tech. Each pathway carries vastly different timelines, costs, and probabilities of success.

The reimbursement gate asks who pays. Is there an existing billing code? Will insurers cover it? Will health systems absorb the cost, or will patients pay out of pocket? A product that clears clinical and regulatory gates but has no viable payment pathway is a technology without a customer.

Every physician already has the training to evaluate gate one. Gates two and three require additional expertise, but the clinical gate is the one most investors skip entirely. And it is the one where physician judgment is irreplaceable. That is not just good investing. It is better medicine.

Harsha Moole is an internal medicine-trained physician-scientist with more than 100 peer-reviewed publications, including work featured in the New England Journal of Medicine. After years of clinical practice and gastroenterology outcomes research, he made an unconventional transition from the bedside to the boardroom by founding PhysicianEstate, a health care-focused venture capital firm.

Over the past seven years, Dr. Moole has made 22 early-stage health care investments across digital health, medical devices, biotech, and therapeutics. He has also built a network of more than 200 physicians from institutions such as Johns Hopkins and Stanford who help source opportunities and provide clinical diligence before capital is deployed. His core thesis is that physician-scientists with firsthand clinical experience are uniquely positioned to identify health care investments that generalist investors often miss.

His research background is reflected in his publication record on Google Scholar, and he shares professional updates on LinkedIn.