Digital RESI June Recap: Virtual Medical Device Investors

25 Jun

By Joey Wong, Investor Research Analyst, LSN

LSN’s last virtual conference, Digital RESI June, featured a number of investor panels educating entrepreneurs on how investors look at opportunities in their sectors and the best approach to engage investors in discussions.

The Medical Device Investor Panel brought together 5 investors from North America and Europe with extensive experience in the Medtech industry, sharing their perspectives on working with early-stage companies as an investor or strategic partner. The panelists shared their thoughts on various topics, including their deal sourcing process and the do’s and don’ts for early-stage companies. In the end, the panelists shared their thoughts on the shifting of investment strategy and focus areas in light of the Covid pandemic.

The panel featured the following panelists:

  • Geoff Dacosta, Director, Business Development & Licensing, Medtronic (Moderator)
  • Diana Saraceni, Founder, Managing Director, Panakes Partners
  • Neil Swami, Life Sciences Advisor and Investor
  • Bryan Grulke, Partner, Volcano Capital
  • Sam Ifergan, President & CEO, iGan Partners

Here are some highlights of their discussion. To watch the full session, click here.

The panelists are in consensus that it is vital to identify the right investors at an early stage, specifically in both areas of expertise and the types of investors. For early-stage companies that might not have the clearest business plan or exit strategy, investors who have invested in the same subsector previously or have strong expertise in the space would most likely see your company’s potential. Importantly, in the Medtech space, a lot of interest comes from non-institutional investors. Early-stage companies may consider finding additional sources of capital from high-net-worth individuals or family offices to de-risk their companies and to prepare for high-quality institutional investors.

The panelists also talked about the importance of researching the person that you are pitching to and tailor the pitch for that person. While it is good to have a well-prepared pitch that covers all aspects of the company, companies should also consider that investors will have different preconceived ideas, depending on their background, and it is good to quickly adjust your pitch accordingly to the investor’s perception and expertise. Additionally, the panelists all agreed that a hard sell at the first meeting can be a turn-off and that companies should think of conferences like RESI as a way to start building a relationship instead of a one-shot opportunity. The goal is to get investors to invest their time to learn more about the opportunity after the conference, not to close a deal on the spot. Many panelists agreed that they oftentimes watch and interact with companies for as long as 6 months before they get fully engaged. “Play the long game,” one of the panelists said.

Regarding the current investment landscape under the effect of the Covid pandemic, most of the panelists think this is going to be a short-term hit but long-term benefit for the medical device sectors. The primary focus of investors right now is to support and bridge their current portfolio companies through these times. Companies that are currently fundraising should expect lower responsiveness from investors and a longer period of time to raise capital. Some panelists are seeing renegotiations and aggressive deal terms from VCs. However, a few panelists mentioned that they are closely monitoring any emerging opportunities related to the Covid pandemic and admitted that the pandemic has shone a different light in diagnostics and infectious disease areas.

The panel ended on an optimistic note – all panelists believe that the negative impact of the Covid pandemic on the medical device sector is temporary. They agreed that the pandemic has highlighted the needs for non-biotech companies and they expect to see an increase of deal activity and capital investments in the medical device sectors in the medium to long term.

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