Why Done Health Failed: Regulation | Startup Autopsy
$50M
Raised
4y
Time to collapse
// startup autopsy
Done Health
ADHD telehealth startup raised $50M by offering fast online ADHD assessments and stimulant prescriptions—then DOJ and DEA investigations ended its core business model.
Evaluating only Done Health’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. Documented cause: Regulation.
Key Events Timeline
FOUNDING
Done Health founded
REGULATORY ACTION
Regulatory pressure escalates
SHUTDOWN
Sudden Collapse: Done Health ceases operations
Full Analysis
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Documented cause
Done Health was founded in San Francisco in 2019 to streamline ADHD diagnosis and treatment through telemedicine: quick online assessments followed by prescriptions for stimulant medications (Adderall, Ritalin) without the typical multi-session in-person evaluation that traditional psychiatry required. The company raised approximately $50M. During COVID, DEA telemedicine flexibilities allowed controlled substance prescriptions via telehealth without in-person evaluation. Done grew rapidly during this period. In 2023, the DOJ and DEA began investigating Done's prescribing practices, alleging that the company had prescribed stimulants to patients without adequate clinical evaluation. The company ceased prescribing controlled substances and effectively shut down its core business.
Lesson
“Telehealth companies prescribing Schedule II or III controlled substances must have their prescribing protocols reviewed by a DEA compliance attorney before launch. Emergency waivers that permit something do not make that thing legally safe to build a business around—they create a temporary regulatory gap that federal enforcement can close at any time.”