Winning Investor Confidence in Early Development

Originally Published MX March/April 2005

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Systematically pursuing product-development milestones can help medtech companies meet investor expectations.

Craig Scherer

Small, early-stage medical technology companies often are better equipped to bring inventive new products to market than large, established ones. Specifically, early-stage companies can take advantage of their flexibility, agility, lean organizational structure, and innovative thinking to develop the type of products that larger companies might avoid because of the risks and costs involved.

Venture capitalists (VCs) often provide the financial foundation upon which medtech start-ups can base their drive to innovate. VC investment in the medical products sector more than doubled from 1995 to 2003, growing 119% over that period. From the first quarter of 2003 to the first quarter of 2004 alone, first-round venture investments in medical device companies rose 17.4%, an increase that outpaced other industry sectors.¹