Leadership Gaps in Life Sciences and Healthcare Portfolio Companies: Findings from 12 Investor Interviews

Healthcare investors have abundant capital but describe a consistent challenge finding leaders who can deploy it effectively. 

Şükran Tümay and Gavin McCartney interviewed 12 private equity investors, venture capitalists, portfolio company CEOs, and healthcare operators across major healthcare markets to understand this gap. The conversations focused on what separates portfolio companies that deliver returns from those that consume capital without scaling.  

All participants spoke on condition of anonymity to encourage open and candid discussion, and identifying details have been deliberately removed or generalised to protect confidentiality.  

The goal of these interviews was to identify patterns in leadership decisions, not to validate any particular hiring approach. 

These conversations took place against a backdrop of record investment activity. Private equity firms invested $115 billion into healthcare in 2024, with five deals exceeding $5 billion each. Healthcare technology deals in Q1 2025 reached $2.91 billion, up 22% from Q1 2024, showing continued momentum.  

Yet conversations with investors and operators surface a recurring observation: portfolio companies often face challenges meeting growth expectations, experience faster-than-anticipated capital deployment, and encounter difficulty scaling beyond approximately $20 million in revenue. 

The constraint described most often is not capital, however. It is leadership that can translate scientific breakthroughs into businesses that create commercial value. 

This leadership gap becomes more visible as exit timelines stretch. Portfolio companies that might have sold in three years now remain in funds for five to nine years. Recent research shows average private equity hold times have reached a record high of 6.7 years, well above the historical average of 5.7 years.  

One experienced biotech investor reflects on the persistence of this challenge:

Nothing has changed in 30 years. We’re still looking at that valley of death after seed stage. When you look at companies in the US versus Europe versus Asia, the talent gap is the same everywhere. The gap between great science and commercial success hasn’t closed. It’s just become more expensive.

The Top Three Questions Facing Life Sciences and Healthcare Portfolio Companies 

1. How Do You Bridge the Science-Business Communication Gap? 

The most persistent challenge described by healthcare investors stems from a communication gap between scientific and commercial thinking. One investor working with early-stage healthcare diagnostics described a portfolio company that had developed a novel technology enabling earlier detection of disease compared with existing approaches. While the scientific advance was widely recognised as meaningful within its field, the founding team initially struggled to translate its importance into a clear commercial narrative for investors. The issue was not the strength of the underlying science, but the ability to frame it in terms of market need, scalability, and value creation. 

I told them that nobody’s investing in the science, but they will invest in a business. So, we need to speak a different language. And it was all there. It was just that I had to draw it out of them and create a story around it.

The company had already generated $6 million in revenue from 20 pharmaceutical relationships, yet these commercial successes were buried in technical presentations focused on molecular mechanisms. The investor continues: “I felt that they were talking about molecules. For deep tech companies like this, being very close to your science and stepping out of that and seeing it in a bigger commercial context is very important.”

This pattern repeats across portfolio companies at different scales. One investor backing scientific innovations observes: “We back scientific innovations, so we tend to work with founders who come from a science background. Many are clinicians and some are PhDs. They often come from clinical or research environments, sometimes linked to universities, and many have limited exposure to commercial skills early on. As a result, they don’t always have a clear sense, particularly at the outset, of how to pitch their businesses with a longer-term perspective in mind.”

The same investor emphasises exit planning from inception: 

It’s really important early on to have your strategy straight. What is your go-to-market approach? But also thinking further ahead: who are you ultimately looking to sell to? And then adapting your strategy accordingly. And many founders don’t have that awareness.

One CEO working with drug discovery services describes this challenge manifesting in team behaviour. After moving someone from technical work into business development, that person reverted to technical work when the market became challenging. “Rather than rolling his sleeves up and saying ‘I need to find 20 leads in the next two months,’ he wanted to go back to the lab,” he said.

The CEO notes this challenge extends to senior management: 

Finding people who have a strategic vision for the company beyond just doing their day job is difficult. People do their day job fine, but where do you want to go? What do you want to be? I always find it really surprising that many founders don’t have that mentality and drive.

This commercial naivety extends into negotiations. One investor describes supporting a British healthcare company expanding in the US: “The founders were very talented, but relatively inexperienced from a commercial and negotiation perspective. At that level, particularly in the US, negotiations can move quickly and are often led by highly seasoned counterparties. Those with deal experience can secure favourable terms, while founders without similar exposure may find themselves agreeing to less advantageous structures. This lack of negotiation experience is fairly common in parts of the life sciences community, where formal deal-making skills are not always developed early.”

A UK investor focused on healthcare AI and medical devices observes this gap most acutely in his home market. “England doesn’t have many founder CEOs with commercial experience. England has brilliant research, but fewer leaders who really understand how to create a business plan that is aligned with market need. Finding leadership that understands business, has a background in science, and can drive a business plan, set KPIs and milestones, and get teams to stick to them is difficult. There is a clear gap,” he said.

One executive in corporate development for a life sciences instrumentation company identifies where this becomes critical: “We interact with a lot of companies with $5 to $10 million in revenue. They’re spinoffs from research institutes, so the founders are very research oriented. They’ve been able to take the company to $5 or $10 million in revenue. But moving forward, going from $10 to $20 million requires more industrial experience and commercial experience, which they lack. We see that in how they structure their commercial organisation versus other life sciences tools companies.”

2. When Should You Use Fractional Executives? 

Early-stage healthcare companies are increasingly turning to fractional executives: experienced operators who work part-time across multiple portfolio companies rather than taking full-time roles. The model has gained momentum globally, driven by funding constraints and the need for specialised expertise without full-time overhead. One early-stage investor identifies this as what’s missing: 

The real problem is access to the resources that bring in the required expertise and human capital. These companies don’t need full-time people; they need part-time people on a fractional basis, but people who are genuinely involved with the company, who understand the business, and with whom you can build a close, trusted relationship. Bringing people into the inner circle for strategic decisions on a part-time basis is difficult, but it matters most when you are shaping your go-to-market approach and getting early feedback from the market.

The fractional model addresses three problems at once: 

• Early-stage companies cannot afford or justify full-time C-suite executives. A company generating $5 million in annual revenue does not need a full-time CFO handling routine bookkeeping. It needs financial guidance for fundraising, financial modelling, and investor relations. A fractional CFO working 10 hours per week provides the necessary expertise at a fraction of the cost. Research shows fractional C-suite hires help biotechs save between 25 and 40% of the cost of a traditional C-suite hire. 
• Regulatory pathways in healthcare often require specialised expertise that varies by product category and geography. A fractional CMO who has guided FDA clearance for similar devices multiple times brings immediate value. Their experience accelerates what otherwise becomes an expensive learning process.
• Experienced executives increasingly prefer portfolio careers over full-time commitments to single early-stage companies. Nearly three-quarters of fractional professionals bring 15 or more years of hands-on experience to every engagement, and more than half generate six-figure annual incomes through their fractional work. Working across three to five companies provides intellectual variety, reduces single-company risk, and often generates comparable or superior compensation. 

One investor notes senior leaders increasingly view fractional roles as second-career opportunities: 

What I hear and see much more is companies bringing in a fractional CFO or fractional CMO; somebody who can step in and do two or three days a week. Partly because they can’t afford to hire them full-time and partly because they may not fit. It’s actually quite a safe way to start off. You can get experienced executives who see this as a second career and start helping smaller companies at earlier stages with the invaluable experience they bring.

The investor elaborates: “They’ve acquired a whole lot of knowledge, experience, and a network. A good network. They know that if they move into a smaller company where they can leave their fingerprints and their legacy, that’s attractive. So, that may be something that’s missing on the market: how do you find good fractional talent and expertise?”

Demand for fractional leadership continues to grow, particularly for CMOs, CFOs, and CTOs. However, fractional arrangements present challenges. Quality fractional executives with relevant healthcare experience remain rare. Finding someone who has worked specifically in your therapeutic area, understands your regulatory pathway, and has operated at your company stage proves difficult too. For this reason, some investors describe maintaining curated networks of proven fractional operators as a competitive advantage. 

Integration also requires deliberate management. A fractional CFO working 10 hours weekly across four companies needs clear priorities and strong working relationships with full-time team members. Companies that treat fractional executives as consultants rather than integrated team members generally see worse results. 

3. Should Founders or Professional CEOs Lead? 

Conversations with healthcare investors reveal no consensus about optimal CEO profiles at different stages. Views diverge sharply based on investment thesis, company stage, and geographic context. 

One investor working with biotech companies in synthetic biology identifies a contradiction in investor expectations: 

Raising money can be difficult because investor expectations are not always consistent. We want founders who are highly motivated and properly incentivised, but we also see situations where founders are leading companies before they have built the operational experience investors later expect. At the same time, investors often express concern when a business is not founder-led. If that tension isn’t addressed early, it can become a challenge as the company grows.

Another investor focused on psychiatry and mental health technologies believes strongly in founder leadership: 

I believe in founder-run businesses. I don’t believe in hiring external CEOs for at least the first 10 years. Nobody treats a business as their baby unless they’re the one who passionately thought about the idea and remortgaged their house to make it happen. I wouldn’t trust a hired CEO who sits across the table negotiating a compensation package to build a company the same way.

An opposing perspective comes from investors working in private equity settings: 

In a private equity setting, it may be better to work with a professional CEO. Founders are so embedded in what they’ve built. Not every founder can successfully make that transition and look at their business unemotionally. If M&A is going to be a key part of the growth agenda, professional CEOs are better.

This same investor witnessed the challenge firsthand: “The private equity fund promoted a CFO to be the head of the business, which didn’t work out well. Finding that talent at the very top with the right technical knowledge is not easy. Someone who has very strong pharma experience was promoted, but she wasn’t able to handle being a CEO.”

Another investor observes that younger founders bring specific advantages: “A lot of founders tend to be younger. With that comes all the traits you might expect. Very exuberant, high energy, super flexible, willing to do what we need. As part of our strategy for life sciences, we back companies that will quickly go to the US and get FDA clearance. With younger founders, they are far more prepared to do that.”

Geographic differences shape these preferences too. US venture capital institutions “will more readily back a younger team” in the Y Combinator model, while European investors remain “more conservative” and prefer “a well-grounded, experienced founder-CEO type individual.” The investor notes one company installed a CEO in his 60s this year: “That goes down well in Europe. There’s a view about overhyping. In America it’s about hype. Whereas in European markets, there’s definitely a greater level of conservatism.”

Another perspective sees the transition as stage-dependent: 

In the early days it makes more sense to have the founders. They’ve developed the IP and they’re passionate about getting it to market. It’s about making sure they’re surrounded by people with commercial experience and expertise. Later on, yes, bring in seasoned leadership. I’ve seen first-time CEOs get out of their depth fairly quickly, and then you have to bring in more experienced people, sometimes from the US.

What These Questions Suggest 

Healthcare portfolio companies face long timelines, regulatory hurdles, and scientific uncertainty. Technical merit matters, but investors say it’s not enough. Companies need leadership that can connect science with commercial execution, build partnerships early, and move with urgency. 

The $115 billion in 2024 healthcare PE deal value means intense competition for the right talent. One early-stage investor explains what’s at stake for portfolio companies: 

A misstep can kill them at any time because there’s always a cash runway that runs out. It’s about not losing face and investor confidence while you go through that discovery process.

Thematic analysis of the anonymised interview data reveals several recurring themes that help explain why leadership, rather than capital or science, most often limits growth in healthcare and life sciences portfolio companies: 

• Commercial capability is frequently underweighted during early decision-making. While scientific and technical diligence is rigorous, interviewees repeatedly noted that commercial execution and leadership readiness receive less scrutiny. Yet many of the challenges investors later face stem from gaps in market understanding, go-to-market strategy, and commercial leadership rather than deficiencies in the underlying science. 
• Leadership effectiveness is highly context dependent. 
  Experience that proves valuable in one setting does not always translate to another. Interviewees emphasised that geography, company stage, therapeutic area, regulatory environment, and growth strategy all shape what “good leadership” looks like. As a result, searching for a generic healthcare executive often leads to poor fit. 
• Full-time executive roles are not always the optimal solution at early stages. 
  Many early-stage companies require targeted expertise rather than permanent C-suite appointments. Fractional executives with relevant regulatory, commercial, or operational experience were frequently cited as an effective way to access senior capability without the cost or rigidity of full-time hires.
• Leadership structures need to change as companies grow. 
  Founders play an important role in early innovation and development, but interviewees consistently observed that leadership requirements change as companies scale. Organisations that recognise this early and supplement founder strengths with complementary experience are better positioned for later growth phases. 

Taken together, these themes point to leadership choice and timing as decisive factors in whether healthcare and life sciences companies successfully convert innovation and funding into sustained growth. 

In this context, leadership outcomes improve when executive capability is matched deliberately to company stage, regulatory environment, and commercial ambition. Stanton Chase works with healthcare investors and portfolio companies to support these decisions by identifying executives suited to specific situations, whether that involves appointing a permanent CEO for a growth-stage business, engaging a CMO with relevant device or regulatory experience at seed stage, or building a commercial team capable of executing partnership and market-entry strategies. The interviews suggest that both talent and capital are available. What ultimately differentiates outcomes is how deliberately organisations decide who leads, in what role, and at what point in the company’s development. 

About the Authors

Şükran Tümay is a Managing Partner at Stanton Chase London, specialising in senior leadership appointments across the Life Sciences and Healthcare sector. Her work spans pharmaceuticals, biotechnology, medtech, diagnostics, and healthcare services, with a strong focus on regulatory complexity, scientific innovation, and the leadership capabilities required to drive progress in highly regulated environments. She brings more than two decades of cross‑border executive search experience across Europe, the Middle East, and Central Asia, advising global organisations on mission‑critical leadership decisions.

Her approach is grounded in deep sector knowledge and a nuanced understanding of the talent landscape across R&D, clinical development, regulatory affairs, market access, commercial strategy, and operational leadership. She partners closely with boards and executive teams to identify leaders who can navigate scientific, regulatory, and commercial challenges while shaping sustainable growth. 

Gavin McCartney, a Partner at Stanton Chase London, serves as the Global Sector Leader for the Health and MedTech sector. He brings over two decades of extensive experience managing executive search assignments for clients at global, regional, and local levels, conducting searches across Europe, US, Africa, the Middle East, and Latin America. Gavin’s international executive search expertise includes working with executive teams across the Life Sciences and Healthcare industry, handling mandates for C-suite/executive leadership and board positions, closely partnering to help onboard leadership strength and drive commercial advantage.

In addition to international corporate organisations, Gavin brings specific knowledge and expertise to support early-mid venture startups and scale-ups, as well as long-standing relationships with PE backed portfolio businesses.