Positioning Yourself For Investment Opportunities Even in COVID Times (Yes, They Are There!)

by | Oct 28, 2020 | Alliances, Thought Leadership

Optimism. It’s a word we may have heard or felt in limited quantities lately, and yet that was the overarching sentiment of the participants at the “Funding the Medtech Startup Journey” presentation, part of the virtual MedTech Strategist Investment & Partnering Summit that Fogarty Innovation is co-organizing. 

Moderated by Fogarty Innovation’s chief innovation officer Mike Regan, the panel featured James Eadie, MD, partner of Santé Ventures; Susan Stimson, executive in residence at KCK Group – Medical Technologies; and Cynthia Yee, principal for Vensana Capital. 

As James said, “If someone had said back in March that here we would be in October, still having virtual conferences and not really seeing anyone, yet markets were at all-time highs and medtech firms were enjoying their best IPOs since the ‘90s, they’d tell that person they were out in left field. And yet, here we are, with all panelists expressing positivity for medtech startups from an investment standpoint.”

Tips for making the most of today’s opportunities

In fact, the first half of 2020 produced the largest two quarter investment total ever for venture-backed healthcare. Although of course no one will dispute that challenges remain, including the uncertainty around COVID cases and when elective procedures will bounce back, opportunities abound. Here are three key pieces of advice the panel shared:

Build a story about your adaptability: Startups have to be more deliberate in thinking through how COVID might impact timelines, particularly when it comes to clinical studies or new product launches. So, it’s important to demonstrate you have contingency plans or are able to adapt your processes, such as figuring out how to do something remotely. Investors want teams that are focused on gaining value now, rather than just treading water.

Bolster your network: Start early and speak to everyone you can, startups are advised. Even if you’re not currently raising money and don’t need capital for a while, it’s always helpful to get introductions and show potential investors that you’ve been executing on plan. Of course, that can be more challenging these days, with everything virtual; after all, no one will bump into anybody in their own kitchens, which is why warm introductions will be more important than ever.

Consider digital technologies, but look at the bigger picture: While “medtech” traditionally indicated devices and diagnostics, now the telehealth and digital segments are growing, and a digital health play or something in AI may have fewer natural barriers to entry. But one panelist cautioned that of less use are digital technologies that focus on collecting vital signs or feedback without a clear picture of how it will be used. That’s because sometimes the last thing a primary care provider wants is more data. Instead, solutions should focus on how to reduce the amount of work or automate a function.

Winter may be coming, but outlook is rosy

The good news for startups is that the need is still there, as panelists shared that the global trends of why they like medical devices remain strong, given the aging population with increasing comorbidities that can only be solved through innovation. When looking at new investments, it still comes down to the same fundamentals for the business, including the strength of the team and the foundation of the company.

In addition, all types of technology are of interest—digital, electrical or mechanical — provided the startup articulates the problem that will be solved. 

As the panelists discussed, if you are addressing a large unmet need and providing an elegant, simple solution, there is ample opportunity for that technology to take hold and ultimately change patient care and patients’ lives. 

That’s because the patients, the demographics and the needs are all still there. And early-stage companies know they can only fill the void by adapting, which is what they do best.

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