The Regulatory Readiness Checklist for AI Startups

What Does Regulatory Readiness Really Mean?

Let’s be clear: you don’t need FDA clearance tomorrow or a 400-page HIPAA compliance binder.

Regulatory readiness means you can walk into a buyer or investor meeting and confidently answer these questions:

• What data do you handle, and how is it secured?
• Is your product regulated, and how are you addressing that?
• What’s your clinical validation plan?
• Can your solution be reimbursed—or at least justified?

For AI startups, the stakes are higher. You’re dealing with dynamic models, sensitive health data, and medical workflows. That means more risk—and more scrutiny.

HIPAA & Privacy Compliance

Ask yourself:

• Are we collecting or storing PHI?
• Are we encrypting data in transit and at rest?
• Are we using HIPAA-compliant infrastructure (e.g., AWS/GCP with a signed BAA)?
• Have we implemented access controls by job role or clinical necessity?
• Are we logging user activity and data access
• Have we documented consent processes and de-identification policies?

Reality check: If you’re checking fewer than 4 boxes here, you’re not HIPAA-ready—and that’s a nonstarter for most health system partnerships.

FDA & Clinical Validation Readiness

Does your AI…

• Impact clinical decision-making in any way?
• Use real-time patient or EMR data?
• Fit the definition of Software as a Medical Device (SaMD)?
• Have a clearly defined use case (e.g., triage, prioritization, screening)?
• Use representative training and testing data from real-world care settings?
• Track metrics like sensitivity, specificity, or AUC?
• Include plans for model monitoring, human oversight, and drift detection?

What we tell founders: If you’re influencing clinical workflows and don’t have a regulatory strategy yet—start now.

CMS & Reimbursement Alignment

Have you…

• Identified whether your tool aligns with value-based care models or risk contracts?
• Explored potential CPT codes or new tech reimbursement channels?
• Mapped your solution’s impact to quality or performance metrics?
• Created messaging that speaks to ROI (e.g., time savings, throughput gains, fewer adverse events)?
• Developed a reimbursement narrative—even if you’re pre-revenue?

Health systems won’t adopt what they can’t justify. If your story stops at “we save time,” you’ll need to go deeper.

Red Zone™ Readiness: What Buyers and Investors Expect

This is what we call Red Zone™ territory—the point where decisions get made.

Here’s what stakeholders want to see:

From Health Systems:

• A clear compliance position
• A realistic validation plan
• Transparent documentation and data use policies

From Investors:

• No surprises in diligence
• A startup that understands risk—and how to manage it
• A team that’s thinking ahead, not playing catch-up

We’ve worked with dozens of startups in this exact stage. And we can tell you: regulatory readiness isn’t just a legal conversation. It’s a go-to-market differentiator.

Ready to See Where You Stand?

Want to evaluate your startup’s regulatory posture right now?

Request a 1:1 Compliance Consult

We’ll walk through your current state and give you a tactical plan for closing the gaps—before they cost you deals.