A startup can have a strong idea, a real market and a promising product and still discover that its business model cannot legally operate as designed.
This is why regulatory due diligence should happen before building, launching or expanding, not once the first problem appears. Founders need to understand what their activity actually involves from a legal perspective, which rules apply and whether their chosen business model is compatible with them.
Payment: the money flow matters
Payment is not simply a technical integration. If a startup collects money from customers and redistributes it to other parties, the legal structure of that flow becomes important. Who receives the money? Who holds it? Who processes the transaction? Who handles refunds and disputes?
In Tunisia, payment institutions are regulated under a specific legal framework, including Law No. 2016-48 and Central Bank Circular No. 2018-61.
For a marketplace or healthcare platform, for example, the difference between facilitating a payment through a regulated provider and actually providing a payment service can have significant consequences for the business model.
HealthTech: software can become a regulated product
HealthTech founders face another common misconception: “It’s only software.”
Not necessarily. Under the EU Medical Device Regulation, software can qualify as a medical device when it is intended for medical purposes such as diagnosis, monitoring, prediction or treatment.
Consider an AI platform analysing ECGs. A tool designed simply to display information may have a very different regulatory position from software intended to support the diagnosis of a cardiac condition. The technology may be similar, but the intended purpose changes the regulatory requirements.
Health data is a business issue too
The same applies to data. A startup processing patient records, medical images or health information is not dealing with ordinary user data.
In Tunisia, health-data processing is subject to specific provisions under the personal-data framework, including requirements involving professional confidentiality and prior authorisation in certain cases.
The question should therefore be asked before collecting the first patient's data: What are we allowed to collect, why, where can we store it and who can access it?
Regulation can shape the business model
Regulation is not something to check after the business model has been designed. It can influence the way a startup charges customers, structures partnerships, stores data, enters a market and even defines its product.
Sometimes the right answer is not to obtain a new licence, but to work with an already regulated partner. Sometimes a product needs to be redesigned. Sometimes a target market should be reconsidered.
The earlier founders understand these constraints, the more options they have.
Regulatory readiness is investment readiness
Investors do not only evaluate market size, traction and financial projections. They also need to understand whether the business can legally operate and scale.
A regulatory issue discovered during due diligence can delay a transaction, increase risk or force changes to the business model. For startups operating in sectors such as HealthTech, FinTech or other regulated industries, regulatory readiness is therefore part of investment readiness.
At Medsirat Ventures, we believe that building an investable startup means understanding the entire environment in which the business operates not just the opportunity.
Before you build, ask a simple question: can this business legally operate the way we have designed it?
A note from our team: Regulations can be complex and may vary depending on the country, sector and specific business model. We may not always get every detail right. If you spot an inaccuracy, have a different interpretation or want to add context, we’d be happy to hear from you and learn from the discussion.