The Value of a Fractional Healthcare Executive

Typically, an early stage healthcare company is founded by one or more entrepreneurs who have a great novel idea for a product or service. After this product or service is initially developed, the founders commonly face a set of critical decisions that will have a significant impact on the future of the business.

Some of these include:

• Defining the “go-to-market” strategy (should it be B2C or B2B?)
• How to measure and articulate the company’s value propositions - and develop “data roadmap”
• Improving the presentations/deck for potential customers
• How to sell to and acquire initial customers?
• Identifying channel partners to increase sales and revenue
• Ensuring that the clinical content and tools are of the highest quality
• Adding experience to the executive team to support fund-raising and business development activities.

A traditional option is to hire a full-time CSO of CMO address these needs. This option is often prohibitively expensive for many growing healthcare businesses. While the economics vary, a typical compensation model for a CSO or CMO is a base salary of $250K to $325K, plus a 30% to 40% bonus, plus equity (the amount varying with the stage of the company - but often in the range of 1% to 3% of overall equity. This level of investment is often not feasible for many early stage companies that need to invest their limited cash reserves in strategic initiatives, operations, and R & D.

A relatively new, and increasingly popular alternative is to engage a “fractional” CSO or CMO. The advantages of this approach are many - with the most significant being the ability to add a highly experienced executive to the leadership team at a fraction of the cost of a full-time hire.

Other advantages include:

• A fractional CSO/CMO immediately brings their broad expertise, strategic insights and connections to the business without a long and expensive search process.
• A fractional CSO/CMO will block out a set number of hours per month that is used to meet the needs of the leadership team and CEO.
• The level of time committment and compensation can easily be adjusted as the company's needs evolve.
• It is possible to engage a fractional executive for several months to see if there is a good fit, and ensure the company derives clear value from the engagement.

For 25+ years, I served as a C-suite executive or Board Member for a variety of innovative healthcare companies - including digital health, medical device, population health, laboratory services, payor, and biotechnology companies. Through my new business, Leider Healthcare Solutions, I can now offer my expertise to help a number smaller healthcare companies accelerate their growth and profitability - within a highly favorable compensation model.

For more information contact me at: [email protected]