Why Your Documentation Matters More Than You Think
The economy is getting stranger, and funding is getting tighter. That means MedTech startups face unprecedented scrutiny from investors who have become more selective with their capital.
Many founders are surprised to discover that exceptional technology alone isn't enough to secure investment. The harsh reality? Not getting funding is usually about documentation gaps that signal risk to potential investors. (In other words, it's not about flawed tech.)
In our experience, 95% of startups fail, and 50% of projects never reach completion. And with margins for error that narrow, every aspect of your presentation to investors matters—including your technical documentation.
Translation: strategic documentation isn't just regulatory busywork or a checkbox exercise. It's a powerful tool that builds investor confidence and unlocks capital. So in this article, we'll explore how documentation reveals your understanding of the market, demonstrates your risk management capabilities, and ultimately makes the difference between securing funding and watching your innovation stall.
The 5-Minute Rule: Where Documentation Goes to Die
When investors review your documentation, they're following what I call the "5-minute rule"—it typically takes experienced investors or their technical advisors just five minutes to identify when a founder doesn't know what they're doing. They're reading between the lines, seeking answers to questions they may never ask you directly: Do you truly understand the development process? Have you identified potential risks? Can you execute on your vision methodically?
Consider the questions investors are typically asking when they review your files:
"How did you document your requirements, and who did you check with to confirm them?" This reveals whether you've done proper stakeholder engagement or are building based on assumptions.
"How many clinicians agree with your approach?" This tests the breadth of your market validation beyond a single enthusiastic champion.
"Does the value analysis committee care about your mission to reduce costs?" This examines whether you understand purchasing decisions in healthcare institutions.
"Where are the low-level details for our engineering due diligence team to review?" This probes the depth of your technical planning.
After the funding bubble in recent years, investors have become more discriminating, conducting deeper technical due diligence before they commit resources. Many MedTech startups that got initial meetings based on promising technology have seen their deals collapse — mostly during due diligence when their documentation failed to demonstrate risk management or regulatory planning.
When funding is tight, investors look for reasons to say no, and disorganized documentation provides an easy reason to pass on technology that might have been promising.
Be Hard on Your Documentation
Many founders make the mistake of focusing on efficacy data when they approach investors. Efficacy is important, but sophisticated investors want to see how it connects to market demand, user requirements, and to a viable commercial product. Your documentation needs to demonstrate this path.
Start by connecting user needs to technical requirements. Each user need should match specific design requirements, which should then link to features and testing protocols. This traceability demonstrates that you understand why your tech's capabilities matter to users.
For example, if clinicians need a device that reduces procedure time by 30%, your documentation should show how this need translates into specific design requirements (e.g., single-handed operation, automated calibration), which then become features that were verified through specific tests.
But you also need to show stakeholder engagement. Document conversations with clinicians, patients, and administrators, capturing their needs and the context behind them. How many clinicians did you speak with? What specialties? What settings? This level of detail demonstrates you understand your market.
Ask yourself these questions:
Does our documentation show why we're building these specific features and how they connect to market needs?
Have we documented input from a diverse sample of users?
Can someone follow the logical progression from user needs to technical requirements to implemented features?
Does our testing strategy validate that we've met the original user needs?
Have we documented our understanding of the purchasing decision process for our technology?
By thinking critically about your documentation, you demonstrate to investors that you understand the journey from innovation to market success, which increases their confidence in your ability to bring your technology to market.
Documentation Can be a Differentiator
Documentation that is just “good enough” puts you at a disadvantage. While regulatory compliance is a minimum requirement, strategic documentation sets you apart from investors looking for breakthrough opportunities.
More and more, funding decisions are based on the potential of a “unicorn” opportunity. Investors have limited interest in “me too” products with minimal growth opportunities. Even if you’ve got revenue in an adjacent market, investors may view this as less important than your ability to disrupt major markets with platform technology.
Your documentation should reflect this big vision. Instead of documenting a single product in isolation, show how your current innovation is the foundation for a broader platform. Show how the architecture of your technology enables future applications, adjacent markets, or expanded functionality. This turns your documentation from compliance-focused to strategy-focused.
Documentation also provides an opportunity to showcase your unique approach and differentiation. While your pitch deck makes claims about your competitive advantages, your technical documentation provides the proof. Use your documentation to highlight:
Novel ways of solving technical problems
Proprietary methods or algorithms
Unique combinations of technologies
Specialized expertise reflected in your design decisions
You'll also want to show how identified risks directly inform your testing protocols, and how user requirements drive your risk assessment.
Finally, showing that you understand regulatory pathways is another area where documentation can set you apart. By documenting your regulatory strategy and how your technical development supports that strategy, you show foresight about one of the biggest risks of bringing a medical device to market. Investors know that regulatory surprises can blow timelines and budgets, so this should be a critical part of your documentation package.
The Takeaway
Strategic documentation is a competitive edge that can make the difference between getting funded and watching your innovation die. By treating documentation as a strategic asset, not a regulatory burden, you show investors you understand the entire journey to market.
The best MedTech startups use documentation to tell a story about their technology, market understanding, risk management, and strategic vision. This narrative builds investor confidence in ways a pitch deck can’t.
Ready to strengthen your documentation and position yourself for funding success? Book a call with Justin to review your approach and identify ways to turn your technical files into a competitive advantage. Investors are looking for reasons to say no — let's give them reasons to say yes.
Justin Bushko
President, Concise Engineering
Next Steps
We hope you find this newsletter valuable and insightful.
If you have any questions, if you have feedback or would like to explore any specific topics further, please feel free to reach out to us.
Please email me at jbushko@concise-engineering.com or to book a call with me, click this link.
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