Some of the country’s leading healthcare-focused equity capital companies are banding together to form an advisory council with the technology security accreditation service provider HITRUST to create best practices for information security for start-ups developing digital health technologies.
The conversations, spearheaded by the Nashville-based, healthcare-focused investment fund Frist Cressey, were designed to accelerate the adoption of digital innovations throughout the health care industry by developing best-practices around data security that large healthcare companies demand prior to embracing a new service.
” Our service or our software application want to be taken nationwide and everyone tingles and that’s when you get in front of the chief security officer’s workplace and they ask if you’re HITRUST-certified,” states Frist Cressey partner Chris Booker.
” It makes [startups] more valuable or more practical,” states Daniel Nutkis, the president of HITRUST. “Organizations tend to be hesitant to work with startups … [Our certification] provided equity capital firms a level of comfort and we saw it as a chance. Chris approached us to much better establish a program more targeted at early-stage companies … so that this becomes a much easier program and can make it more wide-scale.”
Up until now financiers Ascension Ventures, Bain Capital Ventures, Echo Health Ventures, Frist Cressey Ventures, Heritage Group, New Business Associates and 7wire Ventures have all signed on to the equity capital advisory council.
For the firms, it’s merely a matter of safeguarding what is an increasing percentage of capital dedications. Financiers have actually put $50 billion into healthcare startups, according to information pulled from CB Insights, and almost $16 billion of those financial investments were in digital health business. On the other hand, early-stage start-ups are increasingly susceptible to information breaches and lax security practices– failures of oversight that can mean the difference between life and death for early-stage startups.
” Data breaches and personal privacy offenses … these things can destroy a business,” says Booker.