For Accredited Investors

Invest in Healthcare With People
Who Know It

Limelight Health Capital builds funds around leading professional associations — LPs evaluate the companies they invest in, not just review a manager's picks.

Express Interest Review the Model

Limelight Health Capital · Healthcare Spotlight Funds · A Spotlight Funds Platform

The Problem

The Healthcare Seed Funding Gap

Institutional venture capital has retreated from seed-stage healthcare, and angel capital alone cannot fill the void. The result: a structural funding gap that leaves exceptional companies stranded before they can prove their value.

$3–5M
Seed-stage funding gap per company at the critical early stage
18 mo
Runway required to reach milestones meaningful to Series A investors
70%
Of promising healthcare companies fail to raise a Series A round
1–5%
Of accredited investors at industry events actually write a check
$25K
Median angel check size — too small to move the needle alone
18 wks
Average decision cycle for traditional angel groups — too slow for founders
Institutional healthcare VC funds have grown in size over the past two decades — the average fund is now well over $500M. At that scale, writing a $2–3M seed check represents a rounding error in portfolio construction and demands disproportionate management time. Institutional GPs rationally focus on Series B and beyond, where they can deploy meaningful capital into a single company. The result is a structural gap: exceptional early-stage healthcare companies with real clinical traction and a credible path to regulatory approval struggle to raise the capital they need to get to the next milestone.
Individual angel checks are typically $10K–$50K — too small to anchor a round. Coordinating a syndicate of angels is time-consuming, and most angel groups operate on long decision cycles that don't match the pace healthcare companies need. More critically, individual angels typically lack the domain depth — clinical knowledge, regulatory experience, reimbursement insight — to evaluate healthcare companies with confidence. The result is either slow decisions, low check sizes, or capital that flows to the most promotable companies rather than the most promising ones.
Spotlight Funds are structured around professional associations — the organizations that convene the surgeons, executives, and practitioners who actually use, buy, and champion healthcare products. By partnering with these associations, each fund gains access to a curated pipeline of companies that have already cleared an initial filter: they're presenting in front of the most knowledgeable buyers in their market. LPs in a Spotlight Fund are themselves industry professionals who score and evaluate companies — converting passive capital into an active, informed investment process. The result is faster deployment, better deal flow, and a fund community where LPs have genuine domain conviction in what they own.
The Association Advantage

Deal Flow That Starts With Domain Knowledge

Most venture funds identify companies through pitch decks, warm introductions, and competitive intelligence. Spotlight Funds work differently: deal flow originates inside the professional associations where the market actually lives.

Companies presenting at association events have already earned a seat in front of the most informed audience they'll ever face — the practitioners who prescribe, purchase, and advocate for products in that specialty. These are not passive financial investors. They are the market.

When these same practitioners become LPs in a Spotlight Fund, the evaluation process shifts from financial modeling to domain judgment. An LP who has performed thousands of the relevant procedures understands clinical utility, competitive differentiation, and adoption barriers in ways no spreadsheet can capture.

"The people writing the check understand the product. That changes everything about how companies get evaluated."

1,000+
Senior executives and clinicians across association event networks
200+
Vetted companies evaluated per fund cohort cycle
Domain
Sophisticated LP investors with direct market expertise
Deep
Strategic relationships across the ecosystem — payers, providers, acquirers
Regional
Regional Association Events
Smaller-format gatherings that build deep relationships between companies and regional clinical leaders. Earlier-stage companies get meaningful exposure to practitioners in their target markets.
National
National Specialty Conferences
The major annual events where the full community convenes. Companies presenting here gain visibility across the specialty's most influential practitioners, executives, and KOLs simultaneously.
International
International Forums
Global events that bring cross-border clinical perspective and expose portfolio companies to international market opportunity — increasingly relevant as regulatory pathways globalize.
Fund Structure

A Curated Index Approach to Healthcare Venture

Rather than concentrating capital in one or two bets, each Spotlight Fund builds a diversified basket of the highest-rated companies from an association cohort — managed conviction at scale.

01
Diversified Basket
Each cohort fund invests across 14–20 companies, spanning device, diagnostic, digital health, and therapeutic categories within the specialty.
14–20 companies per cohort
Device · Diagnostic · Digital · Therapeutic
Managed concentration limits per company
Consistent check sizes across portfolio
02
Industry-Standard Terms
All investments use standardized convertible note structures — fair to founders, transparent for LPs, and efficient to close.
Convertible notes — fast, founder-friendly
20% discount rate on conversion
7% annual simple interest
18-month maturity window
03
LP Participation Rights
LPs retain the right to follow on into portfolio companies at the fund level — preserving optionality without forcing pro-rata obligations.
Follow-on rights retained by the fund
LPs may co-invest alongside fund
No forced pro-rata participation
MFN clause across all portfolio notes
Investment Mechanics

Standard Terms, Structured for Alignment

Every investment in a Spotlight Fund portfolio uses the same note structure — giving founders predictability and LPs a clear, consistent framework.

Term Detail
Instrument Convertible Promissory Note
Check Size Standardized per fund cohort; consistent across all portfolio companies
Discount Rate 20% discount on conversion to equity
Interest Rate 7% per annum, simple interest, accruing from close
Maturity 18 months from note issuance
Qualified Financing Threshold $1M minimum qualifying round to trigger automatic conversion
Valuation Cap Negotiated per company; disclosed in fund materials
Participation Rights Fund retains pro-rata participation rights in subsequent qualified rounds
Most Favored Nation (MFN) MFN clause included; fund receives benefit of any improved terms offered to later note holders
Reporting Quarterly portfolio updates to LPs; audited annual financials
Board Rights Observer rights retained on request for fund GP; no board seat required
Founder-Aligned
  • Convertible notes close faster than priced rounds — founders can get back to building within days of term agreement
  • No board seat requirement removes governance overhead at a stage when operational flexibility matters most
  • Standardized terms reduce negotiation friction, lowering legal costs for early-stage companies
  • 18-month maturity gives founders enough runway to reach meaningful milestones before conversion pressure
LP-Aligned
  • 20% discount protects LP economics on conversion relative to the next qualified round's valuation
  • 7% interest accrual ensures LPs are compensated for time value if conversion takes longer than expected
  • MFN clause ensures LPs never receive worse terms than later-arriving capital in the same company
  • Pro-rata participation rights let the fund double down on breakout companies in subsequent rounds
Selection Process

Three Lenses. One Curated Portfolio.

The companies that enter a Spotlight Fund portfolio pass through three distinct evaluation filters — combining the wisdom of the crowd, structured LP scoring, and GP judgment.

01
Wisdom of the Room
Companies present at live association events in front of a room full of practitioners and industry executives. Market reception — attention, engagement, follow-up conversations — provides an unfiltered signal that no pitch deck review can replicate.
Live Evaluation
02
Expert LP Scoring
LP investors formally rate each company on a common evaluation framework before any capital is deployed. Scores aggregate clinical utility, market size, team quality, and competitive moat — producing a data-driven ranking that reflects collective domain expertise.
Structured Scoring
03
GP Judgment
Final portfolio selection is made by GPs with deep sector operating experience. GP conviction — informed by LP scores, founder diligence, and fund construction principles — determines the final cohort and term allocation across companies.
GP Conviction
Who Should Invest

Built for Investors With Healthcare in Their DNA

Spotlight Funds are most powerful when LPs bring domain conviction — a genuine understanding of the specialty, its clinical dynamics, and the companies that serve it.

Healthcare Practitioners
Surgeons, physicians, and clinical executives who want to deploy capital in markets they understand intimately — and participate directly in evaluating the companies they back.
Family Offices with a Healthcare Thesis
Multi-generational family offices that have built wealth in healthcare-adjacent sectors and want diversified access to early-stage deal flow without building a full venture infrastructure.
Operators and Founders
Executives who have built and sold healthcare companies and want to convert operating experience into investment edge — backing the next generation in the same market they mastered.
Accredited Investors Seeking Differentiated Access
Industry-agnostic accredited investors who want exposure to early-stage healthcare venture but lack a personal network into the deal flow — gaining access through the association ecosystem.
The Team

GPs Who've Operated in the Market They Fund

Each Spotlight Fund is led by a GP team with direct operating experience in the target specialty — not generalist investors learning the market from the outside.

Lead GP
Fund Management
Operations, LP Relations & Portfolio Construction
Institutional fund management background spanning venture fund operations, LP relations, legal structuring, and portfolio construction. Responsible for fund mechanics, reporting, and LP experience across the platform.
Healthcare GP
Clinical & Commercial
Sector Expert · Former Operator or Practitioner
Deep clinical and commercial expertise in the fund's target specialty. Former operator, founder, or senior executive in the healthcare sector — bringing the kind of domain knowledge that changes how companies are evaluated and supported.
Additional GPs
By Fund Vertical
Varies by specialty and cohort
Each Spotlight Fund vertical may include additional GPs with specific expertise relevant to the specialty. Full GP team disclosed in fund-specific materials upon expression of interest.
How It Works

From Interest to Invested — Five Steps

The LP journey is straightforward: express interest, review materials, commit capital, participate in the evaluation cycle, and watch capital deploy into the highest-rated companies from the cohort.

1
Express Interest
Complete a brief interest form. Tell us about your background and investment focus.
2
Review Materials
Access the fund deck, term summary, and current cohort company overview.
3
Commit
Execute LP agreement and standard fund documents. Accreditation verification required.
4
Evaluate
Attend or remotely review the association evaluation cycle. Score companies on the common LP framework.
5
Deploy
Capital deployed into the highest-rated companies from the cohort. Receive quarterly updates.
Ready to Learn More?

Join the Next Cohort

Express interest to receive fund materials, including the deck, terms summary, and current cohort overview. There is no obligation and no pressure — just the information you need to decide.

Express Interest info@spotlightfunds.com