#Valuation Certificate for Startup

[startupfinosworld]

Discover the true worth of your business with StartupFino's Valuation Certificate. Our expert valuation services provide accurate assessments, ensuring transparency and reliability in business valuation.

[vimalkumar]

Step-by-Step Guide to Patent Registration in Andhra Pradesh

Patent Registration for Startups in Andhra Pradesh: A Comprehensive Guide

Introduction

Intellectual property (IP) plays a critical role in establishing a competitive edge in the dynamic ecosystem of startups. Patents, a crucial component of IP, offer protection for novel inventions, preventing others from using, making, or selling them without permission. For startups in Andhra Pradesh, understanding the patent registration process is essential for safeguarding their innovations and fostering business growth. This guide will walk you through the importance, process, and benefits of patent registration in Andhra Pradesh.

Importance of Patent Registration for Startups

Protection of Innovation: Patents protect unique inventions from being copied or used without authorization, providing the inventor with legal protection and exclusive rights.

Competitive Advantage: Patents give startups an edge by preventing competitors from exploiting their innovations.

Attracting Investors: A robust patent portfolio can attract investors by showcasing the startup's innovative capabilities and long-term potential.

Monetization Opportunities: Patents can be monetized through licensing agreements or sales, creating additional revenue streams for startups.

Types of Patents in India

Utility Patents: Protect new and valuable inventions or discoveries.

Design Patents: Protect the ornamental design of a functional item.

Plant Patents: Protect new varieties of plants that can be asexually reproduced.

Steps to Register a Patent in Andhra Pradesh

Conduct a Patent Search: Conduct a thorough search before filing for a patent to ensure that the invention is novel and has not been patented before. This can be done through the Indian Patent Office's online database.

Draft a Patent Application: Prepare a detailed description of the invention, including its utility, uniqueness, and application. The application should include:

Title of the invention

Background and summary of the invention

Detailed description and drawings (if any)

Claims defining the scope of the invention

File the Patent Application: Submit the patent application to the Indian Patent Office. This can be done online through the official website or physically at the patent office in Chennai, which has jurisdiction over Andhra Pradesh.

Publication of the Patent Application: The patent application is published in the official journal 18 months after filing. An early publication request can expedite this process.

Request for Examination: Within 48 months of the filing date, a request for examination must be filed. The patent examiner will scrutinize the application to ensure it meets all legal requirements.

Response to Examination Report: Address any objections or issues raised by the patent examiner. This may involve amending the claims or providing additional information.

Grant of Patent: Once all objections are resolved, the patent is granted, and a certificate of patent is issued. The patent is then published in the official patent journal.

Maintenance of Patent: Pay the annual maintenance fees to keep the patent in force. Please do so to avoid the patent being deemed lapsed.

Benefits of Patent Registration for Startups in Andhra Pradesh

Legal Protection: Secures legal rights to the invention, preventing unauthorized use or replication.

Market Exclusivity: Provides a competitive advantage by ensuring market exclusivity for the patented technology or process.

Increased Valuation: Enhances the startup's valuation, making it more attractive to investors and partners.

Revenue Generation: Opens up opportunities for licensing or selling the patent, generating additional revenue.

Strategic Partnerships: Facilitates collaborations and partnerships with other companies, leveraging the patented technology.

Conclusion

Patent registration in Andhra Pradesh is a critical step for startups to protect their innovations, gain a competitive edge, and drive business growth. By understanding the process and benefits of patent registration, startups can navigate the complexities of IP protection and build a strong foundation for their innovative endeavors. Investing in patent registration safeguards their inventions and paves the way for future success and sustainability in the competitive startup ecosystem.

[osscertificationsposts]

 ISO Certification is a must to get investors interested in Indian businesses. Come with me as I explore the merits of certification and share some success stories from the real world.​

[acquisory]

ANGEL TAX ABOLISHED – PARTIAL RELIEF FOR START UPS

DIPP in its recently issued notification, which is effective 11th April 2018, does not require start-ups to be incorporated on or after 1 April 2016 for the purpose of exclusion from angel tax provisions. The notification has introduced procedural guidelines to be followed to avail a tax holiday and seek exclusion from angel tax by start-ups. In the context of exclusion of start-ups from fair valuation rules for issue of shares, DIPP has notified twofold conditions to be fulfilled for obtaining IMB approval.

The recent development by DIPP has finally given some relief to Indian Startups. The relaxation has been given to a contentious tax rule and allowed startups set up after April 1, 2016 to qualify for tax exemptions if their total funding is less than Rs. 10 crore and their revenue is less than Rs 25 crore. The Government has also put in place a mechanism for such companies to secure exemption from the ‘angel tax’ with retrospective effect and avail tax incentives under its startup policy. Startups are of great significance for any economy as they are collectively a major emerging source of revenue and employment. Many governments from across the world have been going out of their way to facilitate entrepreneurial dreams. India took initiative to support startups by means of its flagship ‘Make in India’ programme. A plethora of other schemes viz ‘Startup India’ has been launched, but the “Angel tax” haunts startups and angel investors. The issue took a serious turn last year when several startups faced scrutiny from Income Tax department with regard to capital raised at very high valuations.

“ Department of Industrial Policy and Promotion has announced “waiver conditions” for “Angel tax”. Start-ups from now on may avail of the tax concession only if total investment, including funding from angel investors (those who make the initial equity investment) does not exceed Rs.10 crores.”

What is Angel Tax?

Background In 2016, the Central Board of Direct Taxes (CBDT) issued circulars to exempt eligible startups from angel taxes, even if the funding raised by a startup was in excess of fair market value. But this was not as lucrative as it seemed to be. Whether a startup is innovative or not, currently depends on a certification by the Department of Industrial Policy and Promotion (DIPP). This has led to several companies not being incubated inside government registered incubators or eligible for government grants. To be recognized as startup, as per government norms, it must not be older than seven years and must have an annual turnover that does not exceed INR 25 Crore. Most of the startups still had to pay angel taxes as most were not officially recognised as startups.

DIPP’s move- Boom for startups which are born after April, 2016

Department of Industrial Policy and Promotion vide notification G.S.R.364(E) dated 11th April, 2018 superceeding notification no. G.S.R. 501(E) has specified conditions for availing the “Angel tax” exemption on shares issued by start-ups over the fair market value. The notification has set out major relief to the start-ups following the stickling conditions to be recognised as “Start-up”. DIPP has also constituted a broad-based inter-ministerial board to look into the applications for claiming the tax exemptions.

Who will be qualify as a “Startup”?

An entity shall be considered as a Startup: i. if it is incorporated as a- a. private limited company (as defined under Companies Act, 2013); b. registered as a partnership firm (registered under section 59 of the Partnership Act, 1932); c. incorporated as Limited Liability Partnership (under the Limited Liability Partnership Act, 2008); ii. seven years has not elapsed since the date of its incorporation or registration (in case of biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration); iii. turnover of the entity for any financial year since incorporation/ registration has not exceeded INR 25 crores; iv. entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. Provided that an entity formed by…

Read more: https://www.acquisory.com/ArticleDetails/72/Angel-Tax-Abolished-%E2%80%93-Partial-Relief-for-Start-Ups

[rohans18]

Exploring Innovations and Developments in the Biodegradable Lids Industry in coming years

In 2022, the global Biodegradable Lids Industry is positioned to achieve a substantial valuation of US$ 241.6 million. Looking forward, the market is on a trajectory of significant growth, characterized by an anticipated compound annual growth rate (CAGR) of 5.6% throughout the forecast period from 2022 to 2032. This growth is expected to culminate in a market valuation of US$ 416.6 million by the conclusion of 2032.

The demand for biodegradable lids is poised to experience a substantial boost, with the top three countries forecasted to collectively capture a significant market share, accounting for approximately 25-30% by the end of 2022. These insights emphasize the growing significance of biodegradable lids in the packaging industry, particularly in the context of sustainability and environmental responsibility, and the market's potential for expansion and competitiveness.

Request Sample Copy of the Report: https://www.futuremarketinsights.com/reports/sample/rep-gb-15769

The biodegradable lids industry is experiencing significant growth and transformation as it aligns with the global push for sustainable and eco-friendly packaging solutions. Here's an analysis of the industry:

Market Overview:

The biodegradable lids industry focuses on the production of lids for various containers and packaging that are designed to be eco-friendly and break down naturally.

Environmental Focus:

The primary driver for the industry is the increasing global concern for environmental sustainability. Biodegradable lids are designed to reduce plastic waste and its harmful impact on the environment.

Types of Biodegradable Lids:

The industry offers a range of biodegradable lids, including those for cups, containers, and packaging. These lids are typically made from materials like PLA (polylactic acid), paper, or biodegradable plastics.

End-User Segments:

The biodegradable lids industry serves a wide array of sectors, such as food and beverage, takeaway and fast food, coffee shops, and more.

Consumers and businesses are increasingly adopting biodegradable lids as part of their sustainability efforts.

Material Varieties:

Biodegradable lids can be manufactured from a variety of materials, with some derived from renewable resources like cornstarch.

The choice of material often depends on specific needs and regulations within the industry.

Market Trends:

The industry is marked by a surge in innovative designs and materials to meet the growing demand for sustainable packaging.

Customization and branding opportunities are expanding as companies seek unique and eco-conscious packaging solutions.

Regulations and Certification:

The biodegradable lids industry is subject to regulations and certification standards, ensuring that products meet biodegradability and compostability criteria.

Certifications like "compostable" and "ASTM D6400" are important in assuring the quality and environmental benefits of these lids.

Competitive Landscape:

The industry is competitive, with both established players and startups contributing to the growing market.

Companies that can offer cost-effective and innovative solutions are at an advantage.

Consumer Awareness:

Increasing consumer awareness and education on the environmental impact of plastic waste are driving demand for biodegradable lids.

Future Outlook:

As sustainability continues to gain importance in consumer and corporate agendas, the biodegradable lids industry is poised for sustained growth.

Innovations in materials and manufacturing processes are likely to shape the industry's future.

In conclusion, the biodegradable lids industry is a key player in the global sustainability movement, offering environmentally responsible packaging solutions for a variety of sectors. It responds to the growing demand for sustainable and biodegradable alternatives to traditional plastic packaging, aligning with environmental regulations and consumer preferences.

Top of Form

Read more info: https://www.futuremarketinsights.com/reports/biodegradable-lids-market

[ailtrahq]

Welcome back to Chain Reaction. subscribe here Hello, frens and cheers to the end of September! We’re recovering from Disrupt 2023 and gearing up for the highly anticipated Sam Bankman-Fried trial, which starts on October 3. Keep an eye out for of coverage from us as it all unravels over a six-week period to determine whether the 31-year-old former CEO of FTX is guilty on seven counts of fraud and conspiracy. More to come. As for other news, it’s been an interesting and somewhat slower week for the crypto community. But, black hat hackers struck the industry, yet again. On Sunday, Hong Kong-based crypto company Mixin lost around $200 million to hackers in a breach. The hack on Mixin is the biggest theft in the crypto world in 2023, according to data maintained by Rekt. What was the second largest hack, you’re wondering? I can’t give away, so go read the story below. This week in web3 Worldcoin doubles down on emerging markets amid wider criticism (TC+) Hackers steal $200M from crypto company Mixin Yuga Labs security researcher warns of chilling effect after feds search phone at airport Telegram starts to look like a super app, echoing WeChat Why Solana, Polygon and Aptos expect the enterprise to drive mass adoption (TC+) Katie Haun believes now is a good time to invest in crypto Chris Lehane: The SEC isn’t handling crypto regulation ‘strategically’ (TC+) Akowe wants to fix Africa’s broken certificate system with blockchain The latest pod For this week’s episode, Jacquelyn interviewed Tiago Sada, head of product for Tools for Humanity and core contributor to Worldcoin, at TechCrunch’s Disrupt 2023 in San Francisco. Tools for Humanity, which is the team building Worldcoin, raised $115 million in a Series C round back in May with investors like Blockchain Capital, a16z, Bain Capital Crypto and Distributed Global. In March 2022, Worldcoin raised $100 million at a $3 billion valuation. The project was co-founded by OpenAI CEO Sam Altman with a three-part mission to create a global ID, a global currency and an app that enables payments, purchases and transfers with its token. Worldcoin has been on a world tour since April, hitting major cities like Tokyo, Miami, New York City and San Francisco. It has also set up shop in major cities in countries like Kenya, India and China. We dive into why someone would scan their eyes, alternate options and privacy concerns some skeptics have about the project. We also talked about: The global adoption of Worldcoin Kenya “indefinitely” pausing Worldcoin iris scans The project’s biggest challenges for growth How AI can fit into Worldcoin Future opportunities and roadmaps Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear! Follow the money On-chain leverage trading platform Avantis Labs raises $4 million seed round led by Pantera Capital Privacy-centric blockchain Fhenix raises $7 million in round led by Multicoin Capital Web3 dev platform Alchemy acquired blockchain indexing platform Satsuma Bitmain will invest $54 million in now-bankrupt bitcoin mining firm Core Scientific What else we’re writing Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week. Bootstrapping is cool once again (TC+) The current labor market is a gold mine of talent for startups (TC+) What’s the best way to run a startup in a world full of advice? (TC+) This startup wants to verify your ID without storing your personal data Was tech’s ‘bull run’ simply a temporary surge? (TC+) Source

[nextbestexit]

Unveiling the Essence of Business Valuation Services in the USA

In the dynamic landscape of American commerce, understanding the true worth of a business is paramount. Whether you're looking to buy, sell, merge, or simply gain insight into your company's financial health, the importance of accurate business valuation cannot be overstated. In the United States, a robust market for business valuation services has emerged, catering to a diverse range of industries and businesses of all sizes.

The Significance of Business Valuation

Business valuation is the process of determining the economic value of a business or company. It involves a comprehensive analysis of various factors, including financial statements, market trends, industry conditions, and intangible assets. The resulting valuation figure provides invaluable insights for decision-making, investment planning, and strategic development.

Key Drivers of Business Valuation Services in the USA

Mergers and Acquisitions (M&A): The USA has a highly active M&A market, characterized by a continuous flow of transactions across various industries. Accurate valuation is the linchpin of successful M&A deals, enabling both buyers and sellers to negotiate from positions of strength.

Financial Reporting and Compliance: Businesses in the USA are subject to stringent financial reporting requirements. Accurate valuation is crucial for compliance with accounting standards and regulatory frameworks, ensuring transparency and credibility in financial statements.

Estate and Gift Tax Planning: For high-net-worth individuals and families, business ownership is often a significant component of their estate. Precise business valuations are essential for estate planning, gift tax, and wealth transfer purposes.

Litigation and Dispute Resolution: Valuation services play a pivotal role in legal proceedings, such as shareholder disputes, divorce settlements, and intellectual property infringement cases. A well-supported valuation can make or break a case.

Startup and Venture Capital Ecosystem: The thriving startup ecosystem in the USA relies on accurate valuations to secure funding, negotiate equity stakes, and chart a course for growth and scalability.

Choosing the Right Business Valuation Firm

Selecting a reputable valuation firm is crucial for obtaining reliable and unbiased valuation reports. Here are some key considerations:

Expertise and Experience: Look for firms with a track record of providing valuations in your industry or a similar one. Experience brings insights into industry-specific nuances.

Credentials and Certifications: Ensure that the firm's professionals hold relevant certifications, such as Accredited Business Valuator (ABV), Certified Valuation Analyst (CVA), or Chartered Financial Analyst (CFA).

Transparent Methodology: A reliable firm should be willing to explain their valuation methodology in clear, understandable terms. Transparency builds trust.

Client References and Testimonials: Seek feedback from past clients to gauge the firm's reputation and the quality of their services.

Customized Approach: Every business is unique. A reputable valuation firm will tailor their approach to the specific circumstances and objectives of your business.

Conclusion: Navigating the Valuation Landscape

In the ever-evolving landscape of American business, the need for accurate and credible business valuation services in USA is undeniable. Whether you're a seasoned entrepreneur or a budding startup, understanding the worth of your enterprise is a cornerstone of success. By enlisting the services of a reputable valuation firm, you can navigate the complexities of business valuation with confidence, empowering you to make informed decisions that drive your business forward.

[valueteam]

Company Valuation Experts

Company valuation experts are professionals who specialize in determining the worth of a business. They use various methods to assess the company's financial health, market position, competition, and growth potential to arrive at a fair value.

Valuation experts are often called upon to provide guidance in several scenarios, such as mergers and acquisitions, initial public offerings (IPOs), or when a company is seeking financing from investors. Their expertise is critical in ensuring that a fair and reasonable price is agreed upon in these transactions.

There are several types of company valuation experts, including:

Business appraisers - These professionals specialize in determining the fair market value of a business. They use several methods, such as asset-based valuation, market comparables, and discounted cash flow analysis, to arrive at a value. Business appraisers are often called upon in situations such as mergers and acquisitions, divorce proceedings, or when a company is seeking financing.

Investment bankers - These professionals specialize in corporate finance and advise companies on mergers, acquisitions, and financing transactions. They often work with company management to determine the best course of action and then help execute the transaction. Investment bankers also provide valuation advice to their clients.

Chartered accountants - These professionals are trained in accounting and financial analysis and often provide valuation services to clients. They use a variety of methods to determine a company's value, including discounted cash flow analysis and market comparables. Chartered accountants are often called upon to provide valuation advice in situations such as mergers and acquisitions or when a company is seeking financing.

Management consultants - These professionals specialize in advising companies on strategy, operations, and finance. They often provide valuation services to their clients as part of a broader consulting engagement. Management consultants are often called upon in situations such as mergers and acquisitions or when a company is seeking financing.

When choosing a company valuation expert, it is important to consider several factors, including:

Experience - Look for an expert who has experience in valuing companies similar to yours. For example, if you are a technology startup, look for an expert who has experience valuing other technology startups.

Credentials - Look for an expert who holds relevant credentials such as a Chartered Financial Analyst (CFA) or Accredited in Business Valuation (ABV) certification.

Reputation - Look for an expert who has a good reputation in the industry. Check for references and reviews from past clients.

Communication skills - Look for an expert who can explain the valuation process and findings in simple terms that you can understand.

Cost - Consider the cost of the valuation services and ensure that it is reasonable and within your budget.

In conclusion, company valuation experts play a crucial role in helping businesses determine their worth in the market. They use various methods to arrive at a fair value, and their expertise is critical in ensuring fair and successful transactions between companies and investors. When choosing a company valuation expert, it is important to consider factors such as experience, credentials, reputation, communication skills, and cost.

[isfeed]

Volocopter raises $182M to bring air taxi closer to certification

Volocopter raises $182M to bring air taxi closer to certification

Volocopter, a German startup building electric vertical takeoff and landing (eVTOL) vehicles, has secured $182 million for the second signing of its Series E round. That’s on top of the $170 million Volocopter raised for the same round in March at a $1.87 billion post-money valuation. Volocopter is currently in full swing testing its two-seater VoloCity air taxi based on the requirements set by…

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Five Key Things to Know About 409A Valuation

As per its technical definition, “section 409A valuation is an independent appraisal of the fair market value (FMV) of a private company's common stock by a third-party appraiser”. 409A valuation is a critical process that should be undertaken by privately held companies, especially startups that want to compensate their employees via stock options. 

409A valuation may be a complex process for some companies. The five key things to know about it are:

1. Who should do it?

Any privately held company that plans to issue stock option needs to undertake 409A valuation. It is usually done after a new funding round by the company.

2.What is the data required to do a 409A valuation?

The main information are:

Certificate of incorporation

Capitalization table of the company

Financial statements – historical and forecasted

Business plan 

Details of recent transactions and stock purchase agreement

3. What is the safe harbor method?

Employed in the final section of 409A valuation, it entails valuing stock options. The IRS will presume it to be correct and has the burden to prove that the company was grossly unreasonable in determining the FMV of the security if it wants to penalize the company. There are three types of safe harbor methods:

Qualified independent appraiser method

The illiquid start-up method

Non-lapse restriction valuation method

4. Can 409A valuation be done in-house?

While companies have the option to conduct 409A valuation in-house, the burden to prove that the stock options are not undervalued is then with the company. An independent appraiser will transfer the onus of proof on the IRS. 

5. What is the risk of non-compliance?

Non-compliance with 409A valuation can be very harmful for the company.

If a company is non-compliant with IRC section 409A, it can result in adverse tax consequences for the recipient of the tax option. There would also be additional penalties and interest charges to the company.

Compliance with 409A valuation is a part of the due diligence checklist of every investor and acquirer. Hence, any investment or M&A process can get derailed due to non-compliance. 

It is always recommended to get 409A valuation done by a third-party appraiser who has the relevant expertise. A professional team will determine the FMV by examining the company’s financial statements, cash flows, assets, etc. It may also conduct comparisons against companies of similar size in the same kind of industry. Therefore, 409A valuation is necessary to determine the option price being offered to employees.

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[kristinsimmons]

The Catalyst @ Health 2.0/Wipfli State of Digital Health Survey

By MATTHEW HOLT & ELIZABETH BROWN

Last year was a remarkable time for digital health. Obviously it was pretty unusual and tragic for the world in general as the COVID-19 pandemic continued to wreak havoc. We mourn those lost, and we praise our front line health workers and scientists. But for digital health companies, in almost no time 2020 changed from fear of a market collapse to what became a massive funding boom.

But no-one has reported from the ground what this means for digital health companies, of which there are perhaps 10-15,000 worldwide with maybe 6-8,000 based in the United States. Despite the headlines, most are not pulling down $200m funding rounds or SPACing out. So working with professional services firm Wipfli, we at Catalyst @ Health 2.0 decided to find out what digital health companies experienced in this most extraordinary year. 

Between Thanksgiving 2020 and mid-March 2021, we surveyed more than 300 members of the digital health ecosystem, focusing on leaders from more than 180 private (and a few public) digital health companies. We asked them about their market, their experience during COVID-19, and what they thought of the environment. We also asked them about the mechanics of running their businesses. The results are pretty interesting.

The Key Message: COVID-19 was very good for digital health companies–on average. Most are very optimistic but, despite the massive increase in funding since the brief (but real) post-lockdown crash, most digital health companies remain small and struggling for funding, revenue, and customers.

We also heard from investors, and a bigger group we called “users” (mostly payers, providers, pharma, non-healthcare tech companies, e-patients & consultants). While these “users” also saw a big trend towards the use of (and, to a lesser extent, paying for) digital health tools and services, they were not as gung-ho as were digital health companies or investors, who were even more optimistic.

The summary deck containing the key findings is below and there is more analysis and commentary below the jump.

The Catalyst @ Health 2.0/Wipfli Survey on the State of Digital Health Results Presentation from health2dev

The Demographics: Most digital health companies are small startups. Given the ease of starting a company and the difficulty in selling to larger incumbents or getting a large number of consumers as users, that is not a surprise. In our sample, 49% of digital health companies had fewer than 20 employees, and 20% had fewer than 5. While we asked several objective questions about size, revenue & funding, we also asked companies to self-select as to their “scale”, in a way that matches our classification of startups. The five stages are:

It is only when companies are “Actively Scaling” that they start to really grow their employee base, with more than 50% of companies in this stage having more than 100 employees. Even so, a substantial portion (30%) of “Mature” companies still have between 50-99 employees

Customers & Products: Most digital health companies are targeting more than one type of customer. 60% were targeting providers with 57% targeting payers. Substantial minorities (33% & 34%) were selling to consumers and employers, respectively. And, of course, there are several commonalities–of the companies who said they were targeting employers, 75% also targeted payers. When looking at the products and service offerings companies are providing, almost all (86%) were selling software, with over half (55%) selling services–in fact more than half of those selling software were also selling services.

Revenue: We also asked explicitly about revenue–which, not surprisingly, irked some respondents! As you would expect in 2019, a majority of companies had either no revenue (33%) or less than $500K (21%) in revenue. But they had high expectations, with only 25% expecting to be below $500K in revenue by 2021 (this year!). In fact, while only 10% of companies had revenue over $30m in 2019, 16% expected to be at that level in 2021.

As you might expect the biggest changes were expected by those who described themselves as “Just Beginning to Scale” or “Actively Scaling”. 75% of the the “Just Beginning” group were at $2m or below in revenue in 2019 (in fact most were below $500K), whereas 65% expect to be above $2m in 2021. Only 14% of the “Actively Scaling” group were above $30m in 2019 but a full 48% think they’ll be there in 2021.

COVID-19’s Impact on Revenue: We tried to understand the impact of COVID-19 by asking about how companies’ actual revenue in 2020 compared to plan or expectation. 41% said that they were above expectation, with 29% saying they were slightly above (15-50% greater) and 12% saying they were significantly higher (50+%) than plan. Only 5% (50+%) were significantly below plan. Given how optimistic the startup forecasts I see tend to be, I think this shows that COVID-19 did boost revenue dramatically. Again, it was the companies who were “Just Beginning to Scale” or “Actively Scaling” who saw the most unexpected upside.

COVID-19’s Impact on Product Usage & Personnel Hiring: Revenue is all very nice, but what about actual usage? As you might expect, 65% of companies saw usage of their products or service offerings increase more than expected, with 15% saying it increased dramatically (50%+ above plan). Those with products in the market already, either “Just Beginning to Scale,” “Actively Scaling” or “Mature Offering”, saw the biggest uptake, with 29%, 37% & 27% respectively, saying that usage increased dramatically. This translated somewhat into hiring plans, with 29% of companies hiring more than planned, and, again, that deviation being concentrated in those “Just Beginning to Scale (31%),” “Actively Scaling (37%)” or “Mature Offering (36%)”.

Most companies (66%) added new products and services during COVID-19, as any casual observer could see. In fact, Catalyst @ Health 2.0 built an entire version of our SourceDB database showing all the new COVID-19 products we tracked. But, it is a reasonable conclusion that companies with products in the market mostly did better than companies just coming to market and starting their sales cycles. 

Regulation & Data Security:  Not unrelated to the fact that our sponsors at Wipfli provide business process, regulatory advice and data security certification, we asked a long series of questions about those issues and other business processes. Perhaps the most interesting result was that knowledge about applicable regulations was significantly lower in “Early Stage” companies, with 61% of them either “just getting educated” or having a “fair to medium understanding”. “Mature” companies had either in-house staff (45%) or a “strong level of understanding”. However, while 70% of digital health companies reported being asked about data security by (potential) clients, only 25% had been certified by an outside body like HITRUST–suggesting that more needs to be done.

Dealing with the “New Normal”:  When asked about the actual mechanics of running their businesses during COVID-19, digital health companies were very positive. 45% said that the transition to “Work from home” was smooth sailing, and 24% believe productivity went up, versus only 12% who felt that it diminished.

More importantly, digital health companies are very optimistic about the impact of COVID-19 on their business. 47% said it would be net positive and 40% believed it would dramatically improve their prospects. Not one company said that COVID-19 would overall be a long-term problem for their business. The contrast here to many other sectors of the economy could not be starker. This is despite the fact that more companies saw sales cycles increase (44%) rather than decrease (25%). 

Funding & the Investment Climate: In a time when there are several $100m fundings announced seemingly daily, the first thing worth remembering about early stage companies in general and digital health in particular is that the venture capital spoils are not divided evenly. More than 25% of our sample had raised under $500K and 53% less than $5m. While the mean investor funding amount amongst the survey’s digital health companies was over $40m, the median was less than $4m. Many earlier stage companies felt that the typical VC did not have time or interest in something new or small.

Nonetheless, the mood is overall very optimistic, with 62% saying the investment climate has improved compared with before COVID-19. However, the bigger and later stage the company, the more likely they are to think the climate has improved–those $100m rounds are in general going to companies already scaling very fast! And for what it is worth, ALL the investors we asked thought that the investment climate for digital health companies has improved, and almost all thought their valuations had gone up. But, surprisingly, none of those investors said that the time they needed to make a decision had gone down–presumably they were all operating at lightning speed already? (We are not sure every company desperately wanting a VC to answer their email would agree!)

Some Final Thoughts: There is no question that on basically any measure, digital health companies are in much better shape and much more optimistic than they were pre-COVID-19. Most companies believe that the business and investment climate is much better than it would otherwise have been, and that their revenue and their products’ usage is substantially higher than they expected pre-COVID-19. But, there are clearly going to be headwinds; probably the biggest for most is that sales cycles have actually increased. And for the early stage companies, the huge funding rounds (and the even bigger VC fund raises that are going with them) mean that it can be harder for them to get the relatively small amounts they need to prove themselves before they are ready to scale.

Matthew Holt is the Founder & Publisher of THCB and Co-Chairman at Catalyst @ Health 2.0. Elizabeth brown is a Program Manager at Catalyst @ Health 2.0

The Catalyst @ Health 2.0/Wipfli State of Digital Health Survey published first on https://wittooth.tumblr.com/