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Medtech Startups Off the Beaten Path: MicroTransponder

MicroTransponderDallas-based MicroTransponder is developing vagus nerve stimulation technology.

Its Serenity System is used to treat chronic tinnitus, and its Vivistim System is intended to treat poststroke upper-limb mobility issues. Frank McEachern is the company's CEO. 

Q: Why did you choose to locate in Dallas?

A: MicroTransponder was formed in Dallas because the core technology was invented at the University of Texas (UT) at Dallas. However, MicroTransponder stayed in Dallas for two significant reasons.  First, the local research institutions produce a significant amount of electrical engineering and neuroscience talent. Second, the state of Texas has established several economic investment funds to support early-stage high-tech ventures and keep them in the great state of Texas. The UT Horizon Fund and Emerging Technology Fund both made crucial investments in MicroTransponder, which helped the company secure additional private investment and public grants from the National Institutes of Health. 

The commercial neuromodulation industry also just happens to have the headquarters for key players in the Dallas area, with St. Jude Neuromodulation (formerly ANS) and Greatbatch (QIG Group).  This has been very fortunate, as we have been able to interact with their teams much more frequently than we would have otherwise.    

Q: What are the pros and cons of being outside of traditional medtech hubs?

A: Texans do enjoy helping out one another, and there is a great amount of state pride. It used to be a negative to be so far from the traditional venture capital on the coasts of the country, but 70% of all medtech-focused venture firms have ceased new investments in medical devices in the past 8 years. 

During the same period in Texas, the oil boom created a large pool of individual investors and family offices that were looking to diversify investment portfolios outside of the energy sector. These investors believed in both the economics and the social mission of helping patients with neurological conditions. It turns out that the risk profile of a medical technology company is not all that different from drilling an oil well. Both investments have binary outcomes.  The cyclic nature of the energy industry proved that the choice to diversify investments outside of the energy industry into medical devices has been prudent. 

           [image courtesy of MICROTRANSPONDER]
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