There are approximately 2000 active US venture capital firms, several hundred who invest in life science innovation. With the help of medical device consulting firms, a medical device company can attract different sources of capital including venture funds, angel funds, capital from regional investment groups, institutional and professional sources of capital, direct investments from family office high net worth individuals, allied strategic investors, and other sources.
A medical device startup needs to have a detailed business plan that outlines their financial requirements, research and development plan, competitive landscape, market analysis, manufacturing plan, sales and marketing plan, and the time required to execute the plan. The following steps increase the probability of funding and can accelerate the process.
Outline the Business Case
Medical device consulting firms focus on market research and proof of concept. The following are key questions to initiate the process:
What is the unmet need for the medical device?
How will the device address proved clinical needs?
How will the proof of concept be determined
Determine the target market size?
Describe the competitive landscape
Who will purchase the device?
How much will the target market pay for the technology?
Who will use the device?
After medical device market research and analysis, the next step is developing the proof of concept or prototype. The prototype should serve as evidence that the technology can be reduced to practice. A prototype communicates the device vision and can increase the understanding of the potential technology.
Develop a Robust Regulatory Strategy
One potentially significant hurdle is establishing a regulatory strategy. This strategy is required during the fundraising process as investors require to understand critical milestones and deliverables for overall valuation. Regulatory standards evolve continually in the medical device industry. A medical device company is required to quickly adapt to changes in the standards. These standards are changed to improve health care outcomes and patient safety. Investors want to ensure that the medical device and the company meets the regulatory requirements.
Consider the Pre-Submission
The medical device company can garner significant information during a regulatory pre-submission. In pre-submission, the medical device company requests feedback from the FDA on the planned drug or medical device. Obtaining input from the regulatory agency in the early medical device development stage provides valuable insights for the development and regulatory compliance of the medical device. This is also beneficial from the investment perspective. When investors know that the medical device understands and is working towards meeting established or at least discussed FDA regulations, this establishes credibility and supports funding as the pre-submission provides an indication of the regulatory path. Pre-submission also provides some clarity on the level of risk and the possibility of success.
Know Investor And Risk Scenarios
Investors seek to determine and mitigate risk. The following are included in development risks:
- People risks (Not having the right people in the team)
- Market acceptance
Therefore, the medical device company must be able to disk the plans for mitigating the risks to attract and secure investments.