The
panelists from a Tuesday panel of Silicon Valley–based medical device
entrepreneurs at BIOMEDevice
San Jose conveyed the clear message that
the venture funding for medical devices has dried up, but opportunities abound
in the medical device space. One of them is Kathy Stecco, the co-founder and
chief medical officer of Panthera Medtech, a startup acquired by Avantec
Vascular Corp. (Sunnyvale) – that had 20x return without any venture capital
backing.
“I
am pushing people away from the VC route. The more you can bootstrap and look for
alternative funding, the better it tends to be for the long-term growth of your
company,” said Stecco.
According
to Kathy Stecco, many medical devices could be developed by small teams of
self-financed rogue entrepreneurs working with a team of consultants. “If you
have a 510(k) device, you can often self-fund your device. Go shopping at Fry’s
Electronics, build your prototypes, do your testing on your own—do whatever you
can on your own,” she said. “It is doable to get a 510(k) by
yourself—especially if you don’t need clinical trials. You can either use your
own financing or apply for grants to help with funding.”
Tom
Ross, CEO of Pontis Orthopaedics, suggested that medical device startups grow
their team based on how far the technology is from commercialization. More
established companies might need more full-time support. The route of a startup
can change, requiring more consultants than full-timers.
It
is beneficial to frequently look for third-party insights from people who are
not personally interested in the startup’s growth.
Brenneman,
CEO of Rox Medical, recommended that startups look for funding overseas. “There
is a lot of money coming out of China right now,” he says. “It comes with big
strings attached, but there’s a lot of funding there. ... There’s also some
off-shore money coming from Europe into the U.S. market. If you are going long
and have a PMA device, you might consider that.” When considering Chinese
money, it is a great idea to get Chinese patents, says Joel Harris, senior
director of intellectual property at InCube Labs (San Jose). “It used to be
that people didn’t take the Chinese patent system seriously, but it is
increasingly important. China is now part of the WTO. Any Chinese partners are
going to want to see that patents are filed there,” he said. “Just keep in mind
that when you file in various foreign jurisdictions, it can get very
expensive.”
Biokyra is a medical device company based out in Brazil that
started off as a startup. It develops minimally invasive medical devices, from
the idea/need to the pre-series production.
