Rheumatologists earned an average annual salary of $234,000 in 2015, according to the Medscape Physician Compensation Report 2016.1 And although rheumatologists might not make the same salaries as surgical specialists (i.e., orthopedics), many have the means to entertain investments in riskier ventures.
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Well, before you plunk down a sizable sum on a shiny new medical product venture or agree to bankroll your intern’s can’t-miss Web app opportunity (she plans to sell it as “the Uber for patient care”), know that investing in startup companies can be risky—and isn’t for everyone. In fact, only two-thirds of businesses survive two years in business, according to the U.S. Department of Labor. Only a third survive 10 years, and the figures don’t vary much by sector, whether it be healthcare, manufacturing, retail or technology.2
Scary facts aside, investment opportunities are plentiful in both the U.S. and abroad and can be rewarding on a number of fronts—financial, personal, humanitarian, etc. A new business might be the perfect vehicle for rheumatologists looking to make a little more than the traditional target fund offers or seeking an escape from the rigors of daily practice. And healthcare just might be one of the last startup frontiers.
“In general, two major opportunities out there, from a technology standpoint, are health and education. Those two sectors, historically, have not been exciting sectors. With the development of social [media], mobile [technology] and data in general, we have all the infrastructure in place now,” says Adam Cegielski, a biochemist and founder/CEO of Eyecarrot, a startup tech firm that provides customized vision therapy via a mobile application. “I think for quality projects and for companies in disruptive markets that are still growing … there is always money for great opportunities that have, sort of, de-risked their projects.”
Before you jump on the proverbial startup bandwagon, keep in mind these five tips culled from various entrepreneurial and investment strategy resources:
1. Do Your Research
It probably goes without saying, but doing your homework is vital. Investing in a startup is not the same as buying a car or shares of Coca-Cola. Investigate the track record of the founder(s) of the company. Have they been successful previously? Are they familiar with the market, or is it new to them? What value do they bring to the table?
At minimum, rheumatologists should understand the size of the market and competitors.
“And not just competitors in the sector, but also those in adjacencies,” says Dain Currie, senior vice president of Corporate Strategy at Eyecarrot. “It’s really easy these days to get information on what people are doing in various spaces. It doesn’t have to be reams and reams of information, but they should have a distilled understanding of what it is going to compete [against] in the market space. What is going to differentiate your value and your offering against what is available today?”