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Mastering the Medtech Exit: Proven Secrets to Success

A look at some strategies for a successful medtech exit.

Scott Nelson

July 7, 2023

4 Min Read
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takasuu via iStock/Getty Images

While there’s no such thing as a guaranteed exit in the world of medtech, taking proactive and strategic steps can position you for success when the right opportunity arises.

As Co-Founder and CEO of FastWave Medical and Founder of Medsider, I’ve had the unique opportunity to interview some of the medical device industry’s most well-known names about their proven exit strategies.

Keep reading for my top takeaways on how medical device entrepreneurs can successfully position their startup for an exit.

Hit up FDA. Immediately.

With over 30 years of industry experience, Bruce Shook, the former CEO of Vesper Medical and Intact Vascular, both of which exited to Philips, emphasizes the importance of engaging with FDA early on. Utilize the Q-Sub process to outline the in-vitro, in-vivo, and clinical requirements you’ll need to meet in order to reach your next major milestone..

Know your clinical endpoints. 

You won’t find many people with more hands-on medtech experience than Dr. Scott Wolf, the entrepreneur and investor who founded Aerin Medical and ZELTIQ Aesthetics, the maker of CoolSculpting. Scott urges entrepreneurs to be thoughtful and careful about defining clinical and regulatory endpoints. They are more than simply the components that allow you to achieve FDA clearance or approval; they also need to be the things patients and physicians care about most.

It’s all about the early wins.

Startup entrepreneur extraordinaire Mike Wallace is the co-founder and CEO of Devoro Medical, an early-stage medical device company focused on peripheral thrombectomy, which recently exited to Boston Scientific.

Mike’s wisdom? Budding entrepreneurs should score early wins with short-duration 510(k) products before graduating to PMAs. Go after the latter once you know you have the patience and the passion to pursue longer-duration projects. Even under ideal circumstances, success in medtech requires stubborn, unrelenting focus and drive, so be strategic when committing to new projects.

Size matters (but bigger isn’t always better).

Garheng Kong is the innovative founder and Managing Partner of HealthQuest Capital, a private asset firm focused on providing growth capital to companies transforming the healthcare industry. Garheng sees up to 1,000 investment opportunities in any given year, so he understands what it takes to attract the right investors.

Garheng emphasizes that when it comes to syndication, bigger is not always better. Two or three syndicate investors is a good number; anything beyond that can be problematic. Maintaining a small number of investors helps to ensure everyone’s voice can be heard.

Hiring top talent goes a long way.

Bob Paulson is the CEO of Sonex Health and former CEO of NxThera, which sold to Boston Scientific. He emphasizes the importance of surrounding yourself with the strongest team possible.

Build a great team. Look specifically for people who have “been there and done that” in your space. Building a solid group of people with relevant experience in your specific regulatory, clinical, commercial, and reimbursement pathways is essential when creating a startup that others will want to acquire.

Build it and they will come.

Robert Kline is the Chairman of ThermoTek and has exited multiple medtech companies over the last decade to strategics such as Hologic and Becton Dickinson. He encourages entrepreneurs to look beyond the exit, creating a commercially viable product with a measurable market impact.

So many individual factors have to line up perfectly for an exit to work out; securing regulatory approval isn’t necessarily the finish line. Build a self-sustaining business and the investors will come.

Key lessons from proven leaders.

Here are my key takeaways from these inspiring thought leaders in the medtech space:

  • Don’t skimp on research: Engage physicians and end-users early on to ensure your product aligns with the needs and preferences of your target audience.

  • Frame fundraising as an opportunity: Approach capital raises as a crucial part of your business plan, rather than an inconvenience.

  • Invest time in relationships: Cultivate relationships with trusted advisors and involve them in your product development and clinical trials. Get to know the commercial and business development leaders at targeted acquirers to gradually establish trust and familiarity with your team and technology.

Scott Nelson is the co-founder and CEO of FastWave Medical, a medical device start-up developing intravascular lithotripsy systems. He’s also the founder of Medsider, where he interviews CEOs of promising, early-stage medical device and health technology companies.

 

About the Author(s)

Scott Nelson

Scott Nelson is the co-founder and CEO of FastWave Medical, a medical device startup developing intravascular lithotripsy systems for cardiovascular disease. He’s also the Founder of Medsider, where he interviews founders and CEOs of promising, early-stage medical device and health technology companies. Scott has over 15 years of medtech and healthtech experience and is also a co-founder of Crossfire Medical and Managing Director of Big Sky Biomedical.

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