July 11, 2013

Medsider

Why Early Stage Medical Device Deals Are not as Bad as You May Think

 

Warren Buffet is often quoted as stating, “The best time to be greedy is when others are fearful.” But can this same concept apply to the medtech space?

Can limited partners (the investors in a venture fund) be sold on the idea of bankrolling early stage medical device companies?

In this interview with Mike Carusi, General Partner at Lightstone Ventures, we learn why his firm believes the current medtech environment represents an incredible investment opportunity.

Interview Highlights with Mike Carusi

   Because of the challenges involved with raising money for early-stage medtech deals, will there be a large innovation gap in 7-10 years?

   Is there any sort of mandate within large strategics to keep the medtech ecosystem alive?

   For those “bloated” medical device startups that have raised $100+ million, how much pressure are they under?

   Why early stage medical device companies should look at biotech and pharma in order to discover creative ways to fund companies.

   Will the build-to-suit (“exclusive incubator”) trend continue?

   VC firms win by trying to hit home runs versus singles.  But if you can be efficient with capital, can hitting singles be a viable model?  In other words, can Fred Khosravi’s success be duplicated?

   Is there room left for the traditional model of incremental product improvements (with minimal clinical data) at higher market prices? AKA the “fast follower” approach.

   Are we in a renal denervation bubble?

   How does a medtech engineer, physician, or entrepreneur get the attention of Mike and his VC colleagues?

   What are medical device acquirers looking for in pre-revenue startups?  In other words, what markets should startups be pursuing?

   Best practices for “de-risking” a potential acquisition.

   How Mike’s early experience in sales helped him throughout his medical device career.

 To read or listen to the interview, visit: http://medsider.com/interviews/early-stage-medical-device-deals-not-bad-interview-mike-carusi/

 

By Scott Nelson