“Eighty percent of the conversations I have with Fogarty companies, with the companies whose boards I am on, and at industry conferences are about fundraising,” said Andrew Cleeland, CEO of Fogarty Innovation, kicking off Fogarty’s recent, half-day educational workshop on the topic. “While it’s not our primary purpose—we’re here because we have chosen to develop new therapies and technologies that are going to help people—it is the gas that fuels that journey.” He continued, “Our goal this afternoon is to help young companies get their first capital and position themselves for future success by understanding how decisions they are making today can enhance or impair their ability to achieve larger financings in the future.”
Acknowledging the challenging nature of the fundraising environment, he added, “It is tough out there. But you don’t get into this field without being creative, passionate, and committed. So reframe the narrative. Use the insights and information you learn today to shape your own unique approach.”
- The Funding Landscape
Jon Norris, managing director of HSBC Innovation, opened with an overview of the current healthcare venture market. Focusing on the medical device sector, he shared compelling data and analysis, including the following 2024-25 trends.
- Despite some big deals in the first half of 2024, early-stage medtech investment declined sharply overall. With investors cautious about deploying capital and doing fewer deals, companies struggled to raise Series A, and those seeking Series B funding struggled even more due to the difficulty in attracting new investors—even for companies with venture backing.
- 2025 got off to a strong start with $200M raised over 20 Seed/Series A first financing deals in January and February.
- Analysis of funding sources for first financings in 2024–25 revealed a highly stratified investor environment. “You can’t just have a list of five VCs you want to pitch for your Series A and think you’ve canvassed the market,” Norris emphasized.
- The top 10% of medical device financings attracted 45% of all investment dollars. “Investors would rather raise a large round with lots of syndicate members and have dry powder available to fund another round then have more ownership and take more next-round risk,” Norris said.
- The top clinical areas for investment include neurology, non-invasive monitoring, orthopedics, and cardiovascular. Cardiovascular company financing success predominately reflects later-stage deals, with companies raising to fund PMA trials finding success with venture, crossovers, growth funds, private equity and hedge funds.
- M&A activity for medtech companies remained relatively strong in 2024, with 14 deals over $50M in upfront payments, although the median time to exit increased to nearly 12 years.
- Exit windows: “generally with a PMA, your exit window is with pivotal trial data in hand, or at the time of approval. For 510(k), acquisition usually requires achieving regulatory clearance, raising a commercialization round, and demonstrating a revenue ramp. As a result, the time to exit for 510(k) and PMA products is closer than one might expect.
In closing, Norris remarked, “I feel like we’re in a good situation. The VC folks that are here today have new funds, money to put to work and dry powder to support their existing portfolios. But there are question marks out there, and those lead to conservative investing. That’s the environment we’re navigating now. But we are resilient and will make our way through.”
- A Legal Perspective
“A strong legal framework can help you attract the right investors,” said Fogarty chief alliance officer Allie Gregorian, opening the second panel, which featured Peter Socarras, president of Life Science Angels and former general counsel at Nevro; and Brian Appel and Alex Key, both partners at Wilson, Sonsini, Goodrich & Rosati.
Socarras led off, advising startups to leverage the resource-rich Bay Area ecosystem to find the right early-stage investors for not only funding, but advice and partnership. “Early-stage investors can’t be financially successful without the company being successful,” he said. “The right ones can be your best friends on your cap table – they have been there before and can help you develop a capitalization strategy and think through your milestones.”
The IP story
Socarras advised startups to take the time to truly develop their IP story, because it captures the company’s unique value and how it will be protected. “IP is not a ‘check-the- box’ exercise,” he said. “It’s understanding the commercial difference-maker – the critical component of your product that will drive market adoption.” He offered an example from Nevro, which developed the first spinal cord stimulation product that, rather than masking pain with a ‘white noise’ tingling sensation, was able to simply take the pain away. “All of a sudden you go from a device that constantly made you buzz to a device that made you feel normal. The IP strategy and story was laser-focused on that – it’s what was going to make the product a commercial success,” he said.
Socarras also suggested that, for CEOs interested in angel funding, the key is to know who you are interacting with. “Angels represent a wide range of individuals at different career stages, and entrepreneurs’ experiences vary greatly. Some angels provide not just capital but also valuable connections and advice; others, less so. Use good old-fashioned networking to find active investors in your clinical area who can serve as champions within their groups and focus on those.”
Financing strategies & instruments
Next, Brian Appel discussed early-stage financing instruments like SAFEs (Simple Agreements for Future Equity) and convertible notes that can help a company get off the ground before equity financing. These investment vehicles, which importantly, do not require establishing a valuation for the company, allow angels and early-stage investors to put in money that will convert into equity in a later, priced financing round.
Appel explained that notes, which vary significantly in structure and term, are structured as loans that carry interest and have a maturity date which may be extended if triggered before a priced equity round. SAFEs are similar but more standardized. They have fewer negotiable terms, with the valuation cap (the maximum valuation at which the instrument can convert to equity) being most significant. Appel cautioned that while investors prefer a lower valuation cap, CEOs must be mindful that future investors will scrutinize this figure, potentially interpreting it as a reflection of lower company value at the next priced round.
He also addressed key equity financing terms, including the differences between preferred and common stock, the role of option pools, the importance of starting the financing process early, and strategic negotiation tactics — for instance, framing unfavorable terms as potential disincentives for company leaders and their teams.
Next, Alex Key discussed legal considerations in negotiating strategic partnerships. From his vantage point of having worked on commercial contracts ranging from day-to-day agreements through bet-the-company partnering and M&A deals, he offered important advice including:
- Understand and align your strategies as a company from a corporate, IP and transactional perspective.
- Ensure you have sufficient freedom-to-operate including proper IP assignment and licensing terms.
- Be mindful of encumbrances in contracts that could impact a future transaction. Sometimes the best deal is no deal at all.
- For companies spinning out from universities, be thoughtful about timing, given the unknowns and costs of licensing. Consider an option as a first step.
- Medtech Venture Capital
Andrew Cleeland moderated this panel, which featured Chris Shen, MD, partner, Novo Holdings, US; Susan Stimson, managing director, KCK Medtech, and Cynthia Yee, partner, Vensana Capital. Emphasizing the importance of getting to know the investors you pitch as people, he led the panelists through their origin stories – Shen interned at a VC company during business school, Stimson, a biomedical engineer by training, transitioned to venture from an operating background; and Yee got her start in finance, ultimately making her way to healthcare VC driven by personal experience and a desire to contribute to better patient solutions.
Cleeland then walked the panelists through the fundraising process, asking questions about their decision-making process each step of the way. Some highlights:
How VC’s learn about new companies
The panelists agreed that a personal referral from a trusted connection or key opinion leader in the space is “hands-down” the best. If the introduction has to be cold, make sure the materials you send are succinct and engaging.
Criteria to get a first meeting
“The most important factor is fit with our fund in terms of sector, strategy, and financing stage,” said Yee. “If these things are not aligned, I don’t want to waste either party’s time.”
While all three panelists agreed with this premise, there are occasional exceptions. Shen noted that Novo Holdings typically invests in late-stage clinical to early commercial companies, with check sizes ranging from $30–$60 million per round. However, he occasionally meets with high-potential, earlier-stage companies with an eye to possibly investing in the future.
One good clue to determining fund fit – check the portfolio companies on the fund’s website.
What CEOs should cover in a first meeting
“First and foremost, I want to understand the market and the technology,” said Yee. “Educate us. Prepare an agenda but ask if there is anything the VC would like you to explore deeper, so that you can use your time most effectively. Because as hard as it is to get the first meeting, it can be even more difficult to get a second one.”
She continued, “If it’s a new market vs. launching a product into an existing market, how are you going to be positioning yourselves differently? I also want to understand the reimbursement and clinical trial strategy, and how you think about an exit,” said Yee. “How can we make money together?”
Stimson added another perspective. “We tend to lean in and provide a lot of resources for our companies, so we pay a lot of attention to team dynamics. We’re looking for collaborators – can they accept feedback and build on ideas? Do they get defensive when we ask tough questions? Does one person dominate the conversation?”
Collaboration potential is a throughline for KCK. “One of the best second meetings I recall turned into a dynamic brainstorming session,” recalled Stimson. “We had offered a few suggestions in our first meeting and preceded the second with a number of challenges to their strategy. They addressed some of our challenges with valid rationale and embraced others, and we spent the call batting around ideas. We got off that call and all commented on how much we’d love to work with this team. It made us dig into diligence that much harder.”
Closing the deal
“With every firm, there’s this tipping point where a VC moves from skeptic to internal champion,” said Shen. “And this is important because when you see that flip, the relationship becomes quite different and the two of you should be working in concert to get the deal over the finish line.”
He added that, when the deal has reached the point of diligence, the company needs to be open and voluntarily share all information in order to help the VC firm complete the process. “When companies try to control how much information they share, it suggests there is something to hide, and that can be non-starter,” he said.
Additional advice
The panelists stressed the value of listening carefully and acting on what you hear in investor meetings. “As a mentor once told me – the market is always right,” said Shen. “So, if you are hearing from multiple investors that they have issues with something or they think you should do something differently – pay attention. And if you are having difficulty raising money, it likely means that your strategy or concept needs additional refinement.”
- Lessons From the Trenches: The Entrepreneurs
Fogarty CFO Gayle Kuokka led the final panel of the day, sharing lessons from four outstanding Fogarty CEOs who have learned fundraising by doing it: Gabriel Sanchez, CEO of Enspectra Health; Amy Degenkolb, CEO and co-founder of Novocuff; Iris Wedeking, CEO and founder of iDentical, and Tracy MacNeal, CEO of Materna Medical. Here are some of their top tips:
Making initial contact
The panel agreed that there is no substitute for networking and warm introductions to get you inside a circle of trust.
MacNeal has a karmic approach to networking, focusing on ‘what can I do for you?’ rather ‘what can you do for me?’. “I think if you live your life like that, you will have a lot of people who are very happy to help the one time you need something,” she said. “So I always try to pay it forward – if people need something, I make time for that. It’s part of being in this ecosystem.”
Wedeking emphasized the need to be opportunistic and open-minded and make the effort to attend events even if the value is uncertain. She also builds relationships by taking the time to circle back. “Any time someone makes an introduction for me, once I have a call with that person, I reach back out, thank them, and tell them how the connection went,” she said.
Family offices
Noting that family offices are becoming more prominent as early-stage investors, but remain under the radar as businesses, Kuokka asked the panelists to share their own learnings and experiences.
Sanchez, who has a family office as one of Enspectra’s biggest backers, observed that not only are they kind of mysterious and hard to find, but that they operate a little differently. “They are a little more impact-focused and a little less sensitive in terms of the timing of the investment and the return, which can be beneficial,” he said.
Wedeking, who recently attended a family office club event, added that she was one of the few medtech startups there, which helped her stand out, and that many of the people she met had a personal connection to her story.
MacNeal, who also has a family office on the board of Materna, confirmed the benefits of working with these groups. “When you make the right connection, it can be a rewarding long-term relationship,” she said. “But these days, medtech companies face stiff competition for capital from other sectors offering faster or lower-risk returns,” she said. “It’s a tough sell.”
Sizing rounds
Kuokka asked the panelists how they position rounds of multiple sizes, and how they close rounds that don’t match their initial targets.
“I struggled with this initially,” said MacNeal. “I think in the end, it’s best if you have a good sense of what milestones are ahead of you and what you can achieve with different amounts of funding, then consolidate all the scenarios into a single pitch deck to avoid conflicting messages.”
“Everyone says this – it takes longer and more money than you expect,” said Wedeking. After raising a $2M seed round, she hired her first employee, who quickly pointed out that she needed to raise more just to develop the product. She ended up keeping the round open and raising more than double her initial target.
When the funding falls short of the target amount, options include raising more non-dilutive funding through grants or finding a way to do more with less.
On selling yourself
“How do you convince people to invest in you and your idea?” asked Kuokka.
“I don’t think anyone who gets into startups is a ‘normal’ person,” said Degenkolb. “If we were, we would just get regular jobs with regular paychecks. Once I realized that, I stopped trying to fit into a stereotypical CEO mold.” Degenkolb was in the Ferolyn Fellowship at the time, which focuses on authentic leadership. She decided to bring the full force of her personality to the table, embracing the dedication and passion that drives her and her co-founder to succeed in their work. The decision turned her fundraising around; initially targeting $12 – $14M for Novocuff’s Series A, Degenkolb ultimately closed $26M.
Wedeking underscored the importance of being aware of your own limitations and building a management team that fills in the gaps. “I started the company but I’m not an engineer, I’m not a PhD, and I’m not a dentist,” she said. “So I introduce myself to investors with my career story and then I point out that I have surrounded myself with a team of experienced dental industry and medtech veterans who have the skills to build this company with me.”
Dealing with ‘no’
The panelists stressed that hearing “no” is part of the process and that it should be viewed as an opportunity for learning.
“I think it is worth asking why the fund turned you down —not from a place of trying to convince them—but from a place of ‘what can I learn?’” said MacNeal. “There are two critical aspects of my business that I have changed over the years because I kept getting the same feedback and I listened.”
Sanchez added that early-stage feedback is especially valuable, helping refine how you present your vision. Later-stage CEOs have less flexibility, but honest feedback can still reveal insights that strengthen future pitches.
Several speakers experienced “no for now” verdicts that changed once they had accomplished important milestones. However, they cautioned that “never-ending moving goalposts” usually signal a definitive no. Regardless of the outcome, maintaining good relationships with investors remains crucial, as industry dynamics and investor interests can evolve over time.
The panelists closed with a conversation on emotional resilience, noting that a supportive network of mentors and peers; self-care activities, and friendships with fellow CEOs are invaluable for sustaining the entrepreneurial journey.