- Obtaining Venture Capital is Increasingly Challenging
- Experienced Entrepreneurs are Finding Ways to Fund Companies
- Hear how to Successful Bootstrap a Medtech Start-Up
- Learn to Protect Your Equity and Assets
Danny Sachs, MD, Physician Entrepreneur
Art Taylor, President, Chief Operating Officer & Chief Financial Officer – Topera
Paul McLean, CEO – ClarVista Medical
Scott DeFelice, CEO & Chairman – Oxford Performance Materials
Imran Eba, Partner – Action Potential Venture Capital
Doug Fisher, Executive in Residence – InterWest Partners
Doug Fisher, MD
Dr. Doug Fisher joined InterWest’s life sciences team in 2009, focusing on biopharmaceutical and diagnostics investments.
Danny Sachs, MD
Danny co-founded several venture-backed device companies in the Twin Cities, including Respicardia, Mainstay Medical (MSTY), and Amphora Medical.
Art Taylor was President, COO/CFO and Chairman of the Board of Topera, Inc. which was acquired by Abbott, Inc. in December 2014 for $250mm plus operational milestone and revenue related payments.
Paul McLean is President and CEO of ClarVista Medical. ClarVista Medical is clinical stage, ophthalmic device start-up company focused on the development of the HARMONI modular intra-ocular lens system to optimize vision in the setting of cataract surgery.
Scott DeFelice, President, CEO and Chairman of the Board of Oxford Performance Materials, Inc. (OPM), holds a BA from the University of Connecticut and an MSc from the University of Strathclyde, Scotland.
Imran is a partner at Action Potential Venture Capital in Cambridge, MA and invests in companies that are pioneering bioelectronic medicines and technologies. He represents Action Potential as a Board Member or Observer on the boards of Axon Therapies and SetPoint Medical.
00:-00 – 03:20 – Introductions
03:25 – What experiences have you had raising Series A rounds?
03:40 – Scott DeFelice, CEO & Chairman – Oxford Performance Materials – Says you need to raise first round close to home. “We did really well with Connecticut Innovations and the state funds … finding some early money with different set of imperatives can be very helpful.
5:00 – Imran Eba, Partner – Action Potential Venture Capital – Says DARPA and NIH issuing money for neurostim. Using government money to help supplement seed founds funded by own fund.
7:00 – Paul McLean, CEO ClarVista Medical
8:00 Art Taylor, President, Chief Operating Officer & Chief Financial Officer says Topera raised early capital through grants from NIH, a foundation and SBIR as well as a 48D grant from the IRS. “We had a lot of non-dilutive capital before our Series A.” Founders worked networks, tapped friends, families, device execs, small family foundations even patients.
9:18 – Taylor – “We didn’t get into using venture capital funding until Series C.”
9:25 – Taylor – “Raising Capital for the Series A is not for the shy and retiring. You need to be out there.”
9:45 – Dan Sachs, MD, Physician Entrepreneur -Raised Series A from VCs, but need money to get to the point of presenting to VCs to create the necessary evidence. Says he has funded ideas himself and looked for VCs to reimburse him as part of financing deal.
11:35 – When is the right point to engage VCs?
11:50 – Sachs says he loves VCs as investors. Start-ups need $30 million for even capital efficient deals.
12:45 – Taylor – “We decided to try to defer involving VCs until we got through the development of the actual catheter.”
13:40 – McLean – “It took us so long to close our recent round of financing. The fund-raising process is long and difficult.” Early stage, PMA path, sign yourself up for a year of doing a lot of presentations and knocking on a lot of doors.
14:35 – Eba – Says engaging VCs early is a good idea. Don’t hesitate. “They do add a perspective” even if they don’t invest. Says he’s passed on investing in companies that had good ideas but followed the wrong path.
16:12 – Are corporates filling the early stage gap?
16:25 – DeFelice says he hasn’t seen corporates get involved early. Corporates looking for some sort of regulatory approval.
18:03 – Eba – Says there are new corporate investors looking to do deal. “I think we’re seeing more strategics engaging sooner.”
18:40 – What is the difference between engaging the corporate arm and the venture arm?
19:15 – Taylor – Says corporates were difficult to engage until company had secured financing from NEA.
19:45 – Sachs – He has pitched strategics for Series A and been told he’s too early. He had more success pitching Series B deals, particularly if the product threatens and existing franchise. Corporate investors more willing to wait to invest in ‘white space’ deals since there’s no conflict.
22:25 – What role does venture debt play?
22:45 – Taylor says venture debt terms have been phenomenal. “Without having VCs in the company it’s going to be difficult to get venture debt providers to step forward.”
24:00 – DeFelice – Hasn’t taken it because he doesn’t want to complicate cap tables.
24:30 – Sachs says he’s a big fan of venture debt. It gives companies a cushion when they go out to raise additional venture capital.
25:00 – What are some of the mistakes entrepreneurs have made?
25:20 – DeFelice says entrepreneurs need to keep themselves from falling in love with their own idea.
26:40 – McLean says he would not go to Medtech VCs early on. Practice pitch on other VCs, refine your message.
27: 20 – Taylor offers four tips for every entrepreneur including engaging physicians early.
28:00 – Sachs says he’s never had idea pitching an idea over a phone. Never got a call back after sending someone a slide deck. “Don’t do it remotely.”
28:40 – Eba asks entrepreneurs to focus message. Don’t try to solve every problem in the world.
29:10 – How important is OUS money?
29:40 – DeFelice – He’s been approached by investors abroad. Often comes with strings attached regarding location of manufacturing.
30:30 – Eba says valuations from OUS investors can be very attractive, which can be good for the company but can create problems for companies down the road.
31:40 – Taylor discusses interest from family funds outside the US.
32:14 – Sachs recalls having a difficult time getting VCs interested in Mainstay. But introduction to Sofinnova Partners really opened doors.
34:23 – How are valuations coming together for Series As?
34:40 – Taylor says Series A investors really focused on the quality of the technology and the people. Valuation is a secondary concern.
35:20 – McLean agrees, saying he looked at the long road.
36:00 – What advice to you offer entrepreneurs?
36:10 – DeFelice – “If you believe in what you have you have to endure and adapt. If you’re not willing to slog it out, don’t do it.”
36:40 – Eba – Sees a positive trend in Medtech.
38:00 – McLean – It’s a high touch game. Keep asking for names and referrals.
38:40 – Taylor – Build management team and advisors early.
39:15 – Sachs – Listen when VCs ask questions. “They’re asking deal killing questions. They’re not just intellectually curious.”