Venture Financing
Due Diligence

Whether for a merger with an existing organization or the founding of a start-up, the legal due diligence needed for financing in healthcare is substantially more complex than for financing in most other business sectors because the industry is so highly regulated. The Innovators Law Firm can help navigate this process for either the organization being merged or acquired or the private equity (PE) or venture capital (VC) seeking to invest in the business.

As with any substantial capital outlay, lenders, venture capitalists or private equity companies want to minimize their exposure, and often insist on all potential risks being addressed. By the same token, any healthcare company seeking financing needs expertise in managing due diligence. During the due diligence process, we examine the new or to-to-be-acquired entity’s structure, compliance with healthcare regulations, any contractual arrangements, and past funding. We address any legal issues, find solutions to complete the due diligence process, and communicate effectively with the financing organization’s legal counsel or executives regarding any questions and concerns. Our due diligence checklist includes the following:

• corporate law and operational concerns and potential liabilities—everything from business and provider licensing compliance to healthcare real-estate issues such as certificate of needs, and other matters such as technology data privacy and security.
• contractual and intellectual-property rights and obligations, and consumer protection laws and issues
• social media marketing compliance and review
• current litigation, media reports, and any external advisors or consultant agreements
• entity compliance with the healthcare laws and regulations in states of operation.
• any provider arrangements with referral sources, actual or envisioned, to ensure flawless compliance with the Stark Law and anti-kickbacks (AKS) laws and avoid problems with governmental regulators (HHS, CMS, OIG or DOJ)
• claims processing system and controls to ensure that there are no regulatory issues waiting to be discovered by the Centers for Medicare and Medicaid Services contractors or by enforcement agencies.

As an expert in healthcare regulatory compliance, we know what venture capital, private equity, or investment banking firms seek in funding potential or expanding healthcare businesses. On the reverse, we also work with venture capital and private equity firms to provide due diligence for their portfolio companies. Whether you are buying a healthcare company, selling one, or setting one up, our law firm makes sure your transaction is completed with each party’s goals in mind.