How to pick the right backers, according to investors from Sanofi Ventures, Canaan Partners, and GE. A high amount of VC investing is often seen as an indicator of the health of the digital health space. But while investors agree theres a lot of opportunity in the space, some investors think there may be a little too much money.Theres a lot more money, Risa Stack, general manager for new business creation at GE Ventures, said in a panel discussion at Health 2.0’s Fall Conference in Santa Clara, California this week. Theres more incubators, so theres more series A funders, but theres also more groups coming in at the later stage. So youre getting more companies being funded through these incubators, but then there is some later stage capital thats a little less price-sensitive than some of the traditional VCs. So thats kind of whats driving the frothiness of the market. I do believe theres too much money.Stack took the stage with Canaan Partners General Partner Wende Hutton and Ruchita Sinha, senior director of investments at Sanofi Ventures in a panel moderated by independent investor Emma Cartmell.Too much money isnt a problem in and of itself, Hutton said. The problem comes when new investors enter the space who dont understand the realities of healthcare timelines, which can lead to good companies failing.What I think is going to be interesting to see with the flood of money thats come in is our expectations, she said. Is the new money aligned with a model thats feasible in healthcare? Funding companies with high valuations with big rounds, sometimes I think lots of money cant boil the ocean fast enough because it cant drive adoption in a provider budget when youre trying to squeeze out every penny. What I worry about overfunding into these companies is when theres disappointment because you cant drive markets this fast. Good ideas that got pushed too far and couldnt develop into the market appropriately.

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