In the medtech world, a “no” from an investor isn’t always what it seems. The decision to pass on a startup often comes down to more than just the technology—it’s a balancing act of risk, timing, and fit. And for the investors themselves, building a smart portfolio means getting comfortable with saying no—a lot.

That’s what the panelists unpacked during Investors That Pass—a candid conversation on how venture capitalists make the tough calls regarding medtech portfolio optimization. Drawing from their personal experience, the panelists pulled back the curtain on why even the most promising companies don’t always get a “yes.”

Saying No: The Rule, Not the Exception

Fernando Pacheco, Senior Investment Director at Endeavour Vision, kicked things off with a truth that set the tone for the conversation: “Ninety-nine percent of the stuff you look at as an investor, you end up passing on.” That number reflects just how critical selectivity is in building a successful medtech portfolio.

The panel included a spectrum of investment mandates, from seed to late-stage, each with its own lens on what defines risk versus reward. Diana Saraceni, Co-Founder and General Partner at Panakes Partners, described her firm’s stage-agnostic approach and its impact on decision-making. Irit Yaniv, Founding Partner and CEO at Almeda Ventures, offered a unique perspective from an evergreen, publicly traded venture fund in Israel. Alexei Mlodinow, former CEO and Co-Founder of SIA, brought the entrepreneur’s view—having pitched and been passed on by multiple panelists before leading his company to a $140M exit.

The Risk-Reward Dance

The heart of the conversation revolved around a common challenge: how do medtech investors decide when a startup is worth the risk?

Diana shared her experience passing on SIA during its Series A round. Despite FDA 510(k) clearance and a ready-to-launch product, she flagged a lack of clinical data and market validation. “It was all unknown,” she said. “Even though the product was approved, the addressable market size was unclear. That was perceived as a big risk.”

But the story didn’t end there. SIA continued raising, eventually securing multiple rounds and commercializing during the COVID-19 pandemic. Looking back, Diana acknowledged the decision wasn’t necessarily wrong, but it missed the nuance. “It wasn’t the billion-dollar exit opportunity, but it also wasn’t the riskiest. It was actually a balanced risk-reward.”

That tension is at the core of medtech portfolio optimization. Go too early, and the risk profile skyrockets. Go too late, and the upside might already be capped.

Strategy, Stage, and Saying No

Beyond product and market, medtech investment decisions are often shaped by firm strategy. Irit explained that Almeda passed on SIA during the seed stage, not because of the idea but because the firm wasn’t ready to back a U.S.-based venture creation play. “At that time, we were focused on Israeli companies and didn’t have the infrastructure to support a startup abroad,” she said. “It was us, not them.”

That honest self-assessment is vital for medtech investors—and it underscores that many rejections are more about fit than failure.

Fernando added that 80% of Endeavour Vision’s passes are due to stage misalignment. As a growth-stage investor focused on later-stage medtech, he often meets companies years before they’re a fit. “On average, we meet a company three to four years before we invest,” he said.

This long lead time means relationships matter. A no today might become a yes tomorrow—if the startup delivers, listens to feedback, and maintains transparency.

Building the Right Mix: A Portfolio Perspective

A critical part of medtech portfolio optimization is thinking beyond individual deals and looking at the portfolio as a whole.

Diana explained that at Panakes, each new deal is considered not just on its own merits but in the context of overall risk exposure. “We monitor total portfolio risk and return expectations. If we’re overweight in early-stage, high-risk bets, we actively look for later-stage companies to balance things out.”

Irit shared a similar challenge—this time through the lens of therapeutic focus. “You can’t just fill your portfolio with cardiology plays, even if they’re all great,” she said. “At some point, you have to diversify by field to reduce concentration risk.”

Both emphasized that sometimes the right company shows up at the wrong time. Whether due to internal bandwidth, geographic constraints, or LP expectations, passing doesn’t always reflect the company’s potential—it reflects the firm’s strategic priorities.

Relationships Over Transactions

While the conversation focused on passes, the thread that tied everything together was trust. “Relationships are more important than money sometimes,” Irit said. “They keep you in the game.”

Feedback, too, is a currency in its own right. The panelists encouraged entrepreneurs to always ask why an investor passed—and to come back later with answers. “We track why we passed,” said Diana. “And the first question we ask when we revisit is whether the company addressed that concern.”

Fernando echoed the importance of that transparency. “As an investor, when someone asks for feedback sincerely, my respect for them grows. It shows maturity, self-awareness, and a willingness to learn.”

Alexei shared how SIA tracked each pass, logging reasons and revisiting them over time. “It’s a numbers game, yes,” he said. “But it’s also about learning and refining. Every rejection gives you a chance to improve.”

Medtech Portfolio Optimization Is a Long Game

Building a medtech portfolio isn’t about chasing every unicorn or avoiding every risk. It’s about managing the complexity—stage, geography, sector exposure, partner bandwidth—and optimizing for a portfolio that performs across cycles.

And for founders, a pass isn’t the end. It’s often the start of a longer journey—a relationship that, if nurtured, could lead to support down the line.

As this panel showed, medtech portfolio optimization isn’t a science. It’s part art, part math, and entirely human.

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