Startup Funding landscape for MedTech and Biotech in 2017
Hey guys Hau’oli Makahiki Hou if you don’t know what that means its Happy New Year in Hawaiian and if you don’t know what IMUA means that’s a Hawaiian word that means to advance forward with passion despite rough waves so I help guide you get through rough waves of medical device Medtech and Biotech product development. You’re right where you need to be IMUA on TV is a resource for moving new medical invention to market.
Everything from what to do when you first have an idea for a medical product through early stage market research through feasibility through getting funded and then moving into product development like engineering and clinical trials and then all the way down to manufacturing and sales in helping you to develop your product, helping you find the right resources, find the right funding. Since we’re in a New Year I wanted to talk about the changes that I really seen in the landscape for start up funding and how that’s been changing. Let’s look at something so I put somethings together for you. I’m going away so see you in a few minutes here. So what we are looking at now this is just a diagram of something that I put together that shows of the old school funding so if you look it’s like a stepladder approach and we’ve got the friends and family we’ve got the angels and then next the venture capital is coming and after that you can see the foundation is coming and provided the funding then later on the private equity the large corporations they come in and they do mergers and acquisitions in everything has been derisked. Derisked by this point so it’s safe for them to come in it would have been grabbed up the technology now I’m jumping back on the video here. This newer model is shifting there’s still a lot of money out there. I hear people out there that there’s no money in medical device, there is no money in medtech or biotech and that’s not true. The money is out there it’s just that the way people are raising money is changing. We’re not in this stepladder system like we were before you’ve got to take advantage of other resources if you’re not then you are going to be left in the dust. It’s like technology you’ve got to keep up with the changes or if you don’t adapt you’re going to be left behind. So what we are looking at today now go look at the new diagram we’re look at more of that upfront funding being provided by friends and family more of that being provided by angels and even some crowd funding so we’ve got traditional platform like kick started and indie gogo and that product base crowd funding like hey if you want product being early adaptor you are the first one to get it that’s being one of a while but what is new as of last year is more of base funding so that way you can raise funds up to million dollars under the SCC rules and regulations for that crowd funding which is great. It is a great alternative to someone giving a million dollars and funding. Now you see that the venture capitalist that funding has earn a lot smaller it’s harder to rely on that this is in particular where people are being left behind because they are saying this is the model that I know, I’ve done this check the box and I’ve done that check the box and now I need to be chasing down the venture capitalist they find that the money is harder and harder to get today. What’s filling in those gaps? We see a lot of family office funding as you’ll see here and what you see is just think of rich family and they have huge amount of money to manage and they believe in certain things and then they start foundation in some cases like think of – foundation is the perfect example of it. They had various initiatives that put in place to really get behind like polio eliminating polio of in this planet. They put a lot of money time investing in companies that’s their mission. We also see an increase in patient advocate groups defending innovation so think of juvenile diabetes research foundation. We have a lot of people that are passionate about finding different means whether it’s managing diabetes, curing diabetes, preventing diabetes they are invested in that and that’s made up of passionate people that are patients, doctors, other providers they are parents they’re family members we see a lot of that. As well as charitable groups so you can make the tax of donation to the American heart association for instance and then what do they do with that money. Sometimes it’s used towards innovated research like the start ups maybe like you are providing that’s an avenue you want check out. We see that the private equity section here has grown quite a bit and they’re starting to come in earlier and that’s great news because again it’s filling the gaps the adventure capitalist that shrinking so we wanna fill up with something else. Last but certainly not the least we’ve got the large corporations looking for merger and acquisition opportunities they’re looking earlier and earlier so if you can make contacts with those companies with your vision and product are in line with, you start that relationship as early as you can. As a start up for medical device Medtech and Biotech techonology, are you looking for funding? I have some additional resources for you to check out. I recently did 2 podcast on this so the first episode is episode 36 and then part 2 is the following week I aired it episode 37 so be sure to listen I gave some tips what goes into pitches and how you even get funding and this is backing way back and looking at that strategic plan what needs to happen so that your company is fundable, what needs to happen so that you look organized and you look on top of it. Also since this month is January already guess what’s coming out in a few days now. It’s JP Morgan health care week in San Francisco so I will be there for craziness and hype. Let me know if you’re going to be there I’d love to meet up. If you don’t know what it is, JP Morgan health care conference and about 35,000 people to send On Union Square in San Francisco there is five different conferences which is JP Morgan health care conference which is pretty exclusive it’s by invitation only very hard to get into but there is also biotech showcase there’s RESI which is redefining early stage investments then we’ve got the medtech conference and East West CEO conference. All of those going on there’s start up galore walking around looking for investments. There is investors looking for start-ups to invest in, there is any kind of service providers imaginable whether it’s engineering, clinical trials, business strategy any of that. There is breakfast for you to go there and endless cocktail parties most of these are all free. You just have to sign up and go. There’s even a fun run I think it’s still gonna be this year so just starting of the week. There is gonna be a lot of drinks and food just get that fun run done with. It’s definitely where you need to be if you’re start up seeking funding or providing investments or services to start-ups if you haven’t made your hotel reservations already. Good luck I book mine a year ago and they definitely sell out if the hotel is not sold out it probably looking at a thousand dollars a night I don’t mean to scare you but just put it your calendar for next year that might be a better alternative unless you have friends in the area just crash in there in the couch or the guest bedroom you can stay on the bay area. Then go into town you can see a lot of people doing that same thing and you can strike out a conversation with the person next to you. Again I’d love to see you there check out those podcast. Let me know if you’re gonna be in JP Morgan and then let me know what you think about this podcast and if you have some additional funding insights for me I’d love to talk to you about that as well until the next episode, IMUA!