How venture capitalists decide which new medical technologies come to exist

To encourage the commercial translation of biomedical discoveries, public policies increasingly seek to stimulate the venture capital industry. Very little is known, however, about the way venture capitalists assess the likely benefits new technologies may bring to clinical practice and healthcare systems. Drawing on a five-year fieldwork conducted in Quebec (Canada), which included in-depth interviews and document analysis, we explore why capital investors choose to invest in certain health technology-based ventures and how they influence the innovation process. Our findings clarify how capital investors: first, use market-oriented valuations when they pick and ‘coach’ technology entrepreneurs; second, act to transform and protect their investments; and finally, exert their authority along the technology development process. Current innovation policies should be carefully examined because capital investors’ understanding of the world in which they operate largely determines which health technologies make their way into healthcare systems and which may never come into existence.