043 – Early Stage Investment Insight at the RESI San Francisco Conference

When you’re a startup seeking funding in the medtech or biotech field, RESI is the place to be for early stage investment. Meghan Alonso was onsite talking with startups, attendees, and capturing bits of audio from the conference to bring to you. Be sure to catch the next conference live in Toronto on April 4.

Host: Meghan Alonso
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Host Company: Imua Services
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Full Transcription:

Recorder: Are you ready to master the waves of medical device product development? Well wax up your surfboard because you are listening to inspired by Imua. Here is your medical device product development expert that Hawaiian hearted hostess who will help you hang ten. Meghan Alonso.

Meghan: E komo mai and aloha! You’re listening to inspired by Imua, where we help you master the waves of medical product development. Each week we interview guest that educate, guide and inspire to give you and your product the skills you need to hang ten. If this is your first time listening, Imua is spelled I-M-U-A and it’s a Hawaiian word. It means to advance forward with passion despite rough waves. There are plenty of those in the medical device development but keep listening because we’ve got you covered.

Meghan: So I wanted to take today just to review the last week. I was pretty busy I was up in San Francisco for all the JP Morgan Health Care and we’ve got a surprise guest at JP Morgan his name is — it was little crazy I was actually in the hotel when he arrive we were just shoulder to shoulder security was really tight. I couldn’t event check in I went up to the hotel there was a media security wanting to see my badge for the conference or a hotel room key so I said I’m checking in and I actually had someone to escort me to the front desk. Like I had covered before if you listed to last week’s podcast episode 42 there are 5 different conferences that happen during the original JP Morgan conference so much hype has built around us. There are 5 difference conferences, tons of cocktail parties like literally like you can probably go to 10 cocktail parties each night there’s breakfast and just people literally all over a few mile radius of Union Square and they’re for this health care week just all these conferences with early stage health care investing so that’s what I’m gonna focus on today. I spent on Tuesday at the RESI conference which is redefining early stage investment I know most of you guys listening are in early stage of medical product development so it’s just perfect so I’m bringing some audio to you. I’m out there all of these conference and networking events and my goal here is to bring that to you if you didn’t go all of these. You are going to get the highlights through me we’re going to cover a few different people and their products that where showcasing what they had at the RESI conference and just attend it to and you can have a little snip it from one of my favourite forums. We are going to hear from a few different people the people in this forum because you won’t hear them introduce themselves so this is the medical device investor forum so we have Sam. So you will be able to hear there and say with raising capital and a lot of what they talk about is a little later stage they wanna see products that are derisked and that gotten past the concept stage so keep that in mind when you are listening to them and it really interesting in my virtual accelerator program that I have. Invention idea or profitable product I really cover this that you really need to do your homework on your investors so whether it’s someone that they invest early and they want to wait 5 or 10 years before they get their return of their investments. There are investors in there that they invest in a later stage and then they want to return invest on their investments like 6 months to 2 years so just depends you really want a good match when you’re looking for investors so listen to them they definitely give some tips for this and has really good insight and also the people that I’m interviewing that either presenting there in the starting or they are just attending this is really valuable guidance for you because they’ve been on that journey before or they’re currently in it of being a start up and just facing the challenges and the rough waves associated with that so get some valuable takeaways from that and if you were in San Francisco this past week like I said I’m bringing the conference to you but you always have an opportunity to come into these conferences and speaking of that next Monday January 23rd. I’ll be speaking at MedTech Monday conference in Irvine California I can save a $100 off the conference promo code IMUA100 but you’ve got to do that by the end of the Tuesday January 17th you gotta do that soon I’ll have the link in the show notes for that just for you can do that and yea hope to see you there if you don’t catch the promo code early enough then that’s ok you can pay full price and I’ll still see you there and I’ll for sure be reporting on that too so enjoy the audio I have for you and I’ll check in with you once this is over.

Meghan: Say your name and your company name.

1st person : — with – MedTech and Orange County California

Meghan: So tell me what attracted you to exhibiting here and showing of your technology at RESI?

1st person: Well this is a good conference, good location and a good time the JP Morgan attracts people from around the world that focus health care so it’s an opportunity for us to meet that colleagues potential investors, potential strategic partners.

Meghan: So you’ve been on your journey as a start up company while if there’s one piece of advice that you can give to someone of starting out a really early what would it be?

1st person: It’s perseverance I mean it’s not an easy thing to do but you just keep at it don’t take no at it. If you really believe in the product you really believe in the technology and the opportunity. You just keep pushing forward and if it’s the right thing and you keep sticking your head about the weights to find out the world change around you and your idea is not in the right thing you got to know that so you keep looking around that you’re headed the right path to the right target and you’ll eventually get there.

Meghan: So tell us about the Harbour Medtech?

1st person: Harbour Medtech is a company that started about 5 years ago it’s actually my 8th medical device company in my career the other ones are start ups to turn around as venture capitalist this is a company that I saw a opportunity in a regenerative medicine space for product and a solution that could faster healing of bones a better experience for a far lower cost. All of those things is precisely align where today health care system and it’s all around the world.

Meghan: As far as investment what’s been successful for you in the past with raising money?

1st person: What’s successful is you gotta keep your eyes in the check book on your expenses the worst thing that a company can do is spending money ahead of where they are so conserve your cash conserve your funding spend it wisely but you never stop raising money.

Meghan. Well thank you very much!

2nd person: My name is Philip Croxford present CEO of Gamma Medica

Meghan: You are presenting here at the RESI conference. What made you choose RESI?

2nd person: We’ve presented before 18 months ago in Boston we find this as a cross section of investors that will be to our series be run a raise that we are looking right now.

Meghan: Tell us a little bit about your technology

2nd persond: We believe the best early detection device for breast cancer. We have dense breast tissue 50 percent of woman as dense breast tissue and also if a woman is genetically pre disposed to cancer bracket 1 or bracket 2 and we find more cancer in any other modality available to today. The traditional modality using anatomical imaging and a mammary gland is extremely difficult to image using anatomical imaging we use what we call a molacula functional image so if the cancer image we are able to detect the activity of the cancer cell and it’s completely agnostic to any form of anatomy or density that known exist so we find proximately 4 times cancers than standard demography and density is specific rest factor you’re about 2 to 3 times more to develop cancer if you have dense breast tissue as an addition of any of that factors such as social lifestyle genetics.

Meghan: So what’s been the hardest thing about fund raising?

2nd person: It’s a distraction we are commercial and so I try and spread my time between trying to raise money to support the commercial effort at the same time trying to publish the business both the United States and the Internationally Europe and the other is publish competition there is great technology out there and most investors appear to be used to investing in angel status where is a bee round is unusual because we are 100 percent commercial so you know we have approval we have reimbursement so we just need capital for the effort.

Meghan: So you’re outside of the traditional investment pathway I guess?

2nd person: Yea I was just in a panel right now just invest panel for China. 5 panel members 4 of them are prestage early stage and I’m commercial and my dollars will go a long way but it’s a little risk.

Meghan: So this Chinese investment panel what was the big take away from that?

2nd person: I think first of all for the Chinese women nation is 65% density ration compared to white women who have normally 40 to 45 percent so much high risk and then the market in china is revolving in the health care point of view and they have 2 times death ray for breast cancer than anywhere else in the world. I think that was quite startling the statistics the high risks that put a lot of death and the current technology that used today is inferior they use a lot of ultrasound and x ray and it’s not working.

Meghan: Any last parting guidance here?

2nd person: I joined the company a couple of years ago because previously I spend some time in the same field in the other hand of the spectrum. I really reconstruct the surgery for women. Unlike a lot of people in the medical device industry I actually seen it in a clinical point of view and it’s also in my mind that this technology needs to see because we find 4 times more cancers than any other modality so women have to have this and the sad thing of training is I worked on a health care field on the provided side and I just feel very strongly to be proud of something that makes the difference. I’m hoping that it will succeed so you know it’s gonna be a new modality that will be establish and really makes the difference in womens lives I mean 40 thousand women each year died unnecessarily and everybody custom of a story close to related either been through a lot of discomfort or stress. To me this is very passionate and the final thing really is that is used advances in treatment personalize treatment I want you to know that cancer they can – the genetics of the disease and then treat using personalize chemotherapy but on the diagnostic side it’s like a 2 by 2 its ridiculous. We personalize diagnostic which is the first time that we picked women who are high risk give them a test and then they reliability is on us.

Meghan: Yea definitely passionate about what you do just to get up every morning and keep grinding and keep trying trace money and continue to success your company.

2nd person: Well personal now last week, up down there is always ups and downs in the venture capital right preparing for this busy week and I’m just alone thinking do I have the energy and the tenacity and I heard my personal assistant of my old company who is not just colleague but a very special friend and she’s got a recurrence of a stage 2 cancer and she got diagnosed as stage 2 which is late and so the instance of recurrence is very high and so that’s what got me up. It’s not an immaterial contribute will to help and women to better cause of diagnose they deserve it.

Meghan: Well thank you!

Interviewer: —- how is that changed in your —?

3rd person: At first no question that’s correct the FTA is a little bit of well known reimbursement — not known. Let’s look at the map or picture everyone in this room is getting older but when you look at the demographics of population 50% of us die of cardio vascular disease and 90% of us we are not able to run like tennis all the things like you want to do like 50 60 70 years old that demographic is —- if you take a look of the average device that —-. If every device has to change into demographics population are shifting think of the market —. Macro economics is fantastic I don’t want to go politics I don’t want to mention trump to my wife but anyways if we talk about the regulatory environment maybe you are looking at it in a fugitive there is some –. Really hard to know what’s going to happen —- tough to know what will happen to macro etc. But I tell you right now that if you look at it from accusation advisory or the metronic scientific they have an appetite like never before for devices if you take a look at the cardio vascular disease this whole thing about — environment is not — it’s gonna be — it’s not only the – but it’s all the good – that comes after the vow it’s large vessel access it’s the large vessel closure it’s the computation that occurred from all instance so the medical device industry is hotter than it’s ever gonna be you just got to need to be able to — speed bombs that occur. My advice to you is fail fast don’t shoot backwards gotta know what’s happening in metronic – average because they got to have development if you’re developing something that that’s probably years behind — and find out you’re behind the – and you got to stay so —.

Interviewer: Very optimistic, in the other side maybe you want to explain why —- generally registering data all reference – electronic data across biotech and medtech you can find information — if I look at the — let me be more specific if you look at our device investments — find the exit in a more general audience. What do think that’s gonna be — portfolio or biotech of course tech it’s not the entire portfolio that includes –tech and – and medical device and biotech — this is – it’s a little bit under 4 years from initial investment until the next device companies so all else is equal – soon I get the same money investment company in my back – that’s a piece of story the other piece is I’m not getting back the typical biotech outcome that we think about is — is actually fairly consistent fairly steady and so the company ends up playing for an outcome market price – it’s about – biotech is twice as rapid as the outcome that you created is twice as much the – taking 30 in device company – that’s what we – 40% of the fund it’s health care it’s about 65 or 75% and it’s a whole mix of stuff – some brand new collagen platform the device – it’s a whole mix of stuff that’s why we migrated to looking at biotech as a main and then everything else get in them why you think this device — can’t even get close to them so that – there is – more – portion of that it’s gonna be more of what we see of products that are coming. From — we have something in the middle we like to – for everybodies part at the high level I think they score completely right — on farm site and the biotech side I think what we’ve seen one the first time the medical device is starting to clearly out form for living such areas other than biotech centres and I was talking to the best – there is a thousand medical device that are missing there shouldn’t be find in the last 5 to 6 years it have been – so there is going to be – a lack of animate artist a lack of animation – focus on funding side.

Interviewer: What you see as the trends that focus cardio vascular demography? What you see as the other trends emerging in the medical device centre that you guys are heavily focused on and —?

4th person: — we’re – just to forget — we invest for the future – even if you don’t understand we are trying to get our money back I actually can — it’s getting harder and harder to align venture fund with the expectation — the good is thing is we focus on excellence and larger marks that will be – able to – unknown future upon who are you setting to and that’s a – great comic energy to – a fundamentally good product for me your stimulation we look up in the – in a – tenacious if you look across the number – probably again to speak to the – it’s gonna have medications that are useful and – it just doesn’t void the display of the strategies for some companies that are useful when they run medtech run a program in parallel and many of this cases are selling to surgeons and their – group and – they generally want – so when you go to – for anything and anyone they are being adopted by the regular surgeon it’s actually quite a – we would want to see commercialization technologies so I would say that they fix — behind — because they were intimidation your stimulation and I still think this time you put devices in your – make money with this very difference – ahead –

4th person: We —probably – the way we – why is investing shift probably 5 years ago almost changing definition of innovation so it ends like – that focused on cost – so –we would make the investment of years ago of company like surgical robotic platforms for extra hospitals in United States but we would actually quite interested in robotic platforms that delivers functionality such as – but for $50 thousand dollars unit instead 1 million and a half so – to market like China where so much capital coming in – from medical device portfolio – those from – Chinese ventures– also the corporate in China. A costumers pay for different definition of innovation – portfolio of cost and not just but 100 times cheaper so that’s – it is – health we’ve tried to – with someone this other really like real challenge it’s the investment.

Interviewer: How many of you are entrepreneurs or CEO or –?

4th person: I think this panel is a good panel that will give you a feeling for what money is looking for so you know for me – right I feel sales – and if we ever talked in the sales force we could – our value of much point of – and we want to stop and if animal studies don’t work and get the hell out of there. If we’re doing a – studies in – like – a recent accusation that I have is cardio vascular we wrote the first check with 300 thousand dollars back company — 3 million and – we’ve got a lot of money we sold that for 240 million dollars and we only have – so if you’re coming to – with the 50 million post money evaluation sales force then we go to – for that. If you got an idea – you may not go to – because you — write a check for a hundred thousand dollars. It’s a lot so keep in mind where the money is you know you are trying to open non US style definitely goes to Canada because US is not easy right now. So keep in mind where the money is and try to focus on presentation on that money–.

Interviewer: There is sure a reserve business model – in tech companies – it kind of – of this stuff think about that you are building a company – after you even – for – and how it is translated to your ownership – all that kind of stuff. In some instances you got to have – say I think this is gonna take longer – a gentleman named Dennis – a company in Minneapolis – Dennis has really – company instead he get more capital than biotech like and Dennis said if that’s the case I’m gonna have – of biotech strategy meaning I’ve got the concept of the thing of phase 1 – then I’m gonna do phase 2 then go to phase 3 which – trial so many device companies have approach that way. We’ve done some cases right here and there but Dennis is rigorous and ruthless – okay I’m not an investor but that’s the orientation. One other example hating myself a long time ago on my first personal investment was — fantastic company in San Diego the original idea was – and it turned out it was tough to do because every time you — completely sealed then it’s a certain procedure – to get away from generation 1 to 2 to 3 and it’s slowly it’s a long cycle if you can find something where that cycle is – the more of company the CEO can gets all the crediting and saying let’s have this thing. When that happen from the idea of the completion of trials through months stunning the piece of – do you have a chance of fail early and said the formal was gonna be a tough – much more of the drug story which is the ladder one if you’re a top working turned out to be —. So this is for the last text to see the funding for –.

Meghan: What we see in the US sights as well as the other is the opportunities promised? How people used their knowledge — most of us at the table really want to see things when they have a – or dearest – and seeing of the number of cases just have where I am is you got to push – and then you got the mark which is — studies – what would you actually — price – I cannot tell you how hardly you can talk to people but that mark rather than the technology push and you need a panel around you who will challenge you as early as possible. Talk to us ahead like sessions like this about the what people like to see in study and equally I certainly seen it from different countries like France, Ireland this countries are quite big to final main event like Stanford program but they don’t necessarily teach financial efficiency so how will you spend the money? How will you spend and respect the money you get to actually deliver the value. From the second you start using anybodies money you start to demonstrate your energy to grow value and don’t underestimate our – it does become part of our diligence and for you people who have — is a much better investment than right technology so we do invest as a team so please make sure that you display your team and show honestly what synergy in you particularly when you approach them.

Meghan: So say your name and the company that you are –

5th person: Dave – with Med Control Technologies

Meghan: So how’d you like the RESI conference so far?

5th person: I’m enjoying it there is quite variety of type of investor that makes it a good environment for inspiring entrepreneurs here.

Meghan: What’s the best thing that you’ve learned today?

5th person: Probably some of the new answers of how different stage investors view that are pitching to them and some nuggets that help you make you a better candidate for your funding.

Meghan: Tell me a little bit about your product?

5th person: We’re developing an internet connective secure medication suspensing device that’s preventing drug abuse, addiction diversion so control medication are walked in the device and program to patients prescription so that when they are ready for dose it reminds you of text message ringing flashing or vibrating and that point they have to scan their fingerprint so no one else can take their medication or they can’t give it away or sell it. It’ll dispense a single dose of medicine and then otherwise it will lock them out until they’re ready for the next and then on top of all that they are internet connected so all the events associated with device are wirelessly communicated through the cellular network and we have the information system in the back and predict abusive behaviour, monitor of people with taking their medications.

Meghan: What been your biggest struggles so far just with the company it could be anything from technology to fund raising to just general struggles that entrepreneur goes to?

5th person: I think for us it’s been not quite purely a digital health solution. I guess like a more traditional medical device that gets implanted or diagnoses people and we’re not quite consumer product trying to fund that fit of the product market fit and the – strategic partners putting ourselves in a health care environment. Identifying those partners and then being funded by people that are used to funding our sort of company which is very common because we serve in the middle of this type of businesses so I think it’s been identifying health care partners and potential funders.

Meghan: So if you were to give any piece of guidance or advice of someone a few steps behind you of going to their journey of developing a product what would it be?

5th person: I think it’s pretty cliché over here I guess it’s really identifying what value does your products made focusing on the problem what value are you creating. Driving away to monetize that solution on how are you going to make money and then everything else that follows product features, product development and your strategic approach to gaining the foothold and then growing the business will sort to follow to that.

Meghan: I always tell people that value preposition and that early stage market research is validating the idea and making sure there is a market that wants it. That’s the most important thing.

5th person: The other thing is really focusing as an example for us we have a solution that really address medical adherence that’s such a broad topic and really focusing on drug abuse for us – all the way down to adolescence for example like focusing on something you can be very good at not just as general product that’s ok and a lot of things.

Meghan: Thank you so much!

6th person: I’m Doug – im with ThermImage Inc – City.

Meghan: How you like the RESI conference so far?

6th person: It’s been good a lot of foot track. It’s a one day conference in – over a thousand people that signed up it’s the biggest ever for RESI conference.

Meghan: What are you looking to accomplish to speak while you’re here in San Francisco?

6th person: Our goal is to find a fund raising partners so we’re looking for a relatively small amount of money and then million dollar range a million to 3 million so we are not looking for the larger – 10 to 15 dollar range so we are looking for a certain investor a small amount of money to our product.

Meghan: Tell us a little bit about the technology?

6th person: So the technology it’s a non invasive way to measure deep tissue court temperatures so we can measure the temperature of the brain as our first product and we can also measure the temperature of the kidney, lungs, heart really anywhere in the body you can measure it non evasively using – as far as we’re aware there is no company that can do that anywhere in the world.

Meghan: What is your biggest challenge as a start up and it could be just a general business problem or raising money or building a team what do you think?

6th person: In our case the biggest problem is really just the time that is taking to develop the technology and – my experience this is my 7th start up but it’s the first of the life science base and then the technology you can move very quickly because you’re not regulated by other else that forces so the life science base it’s just very difficult to develop – to actually get the mark.

Meghan: What would be a piece of advice that you give to someone a few steps behind you?

6th person: Bootstrap as long as you can until you can raise additional money but bootstrap – the company you can be – take you longer to succeed and you bought some patient money it’s okay but much of there isn’t patient and you’ll have losing your company.

Meghan: So I hope that you enjoy a little – of that audio in the RESI conference they actually have one coming up in April 4th in Toronto Canada and it’s associated with the group call mars over there so it’s a really cool group it’s an association with their Health Kick innovation challenge so check that out it’s just resiconference.com and I hope to see you in MedTech Monday like I mentioned before you can save a $100 off with promo code IMUA100 and more details about that conference can be found at medtechmonday.com so I hope to see you there and I hope you have great rest of the week until I talk to you next, IMUA!

Mahalo for joining us. If you’re new to riding the waves of medical device product development, or if you’ve been in development for a while already, Inspired by Imua is here to surf with you. Want to be a master of the waves? Text hang ten that’s all one word HANGTEN to 44222. We’ll send you the most common wipe outs companies make in product development so you can avoid them and reach master wave status. Again, that’s HANGTEN to 44222. We publish a new episode every Tuesday, so catch us at Inspiredbyimua.com. Imua!

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