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Medical Device Development 101

Finding Investors and Accelerators to Launch your MedTech Startup

We know that finding financial resources and business support in the early stages of your MedTech startup can be difficult. Fortunately, there are solutions to this challenge! You can get help from startup accelerators and angel and seed investors who specifically support startups until the business gets to the stage of generating its own cash or is ready for further investment. In this article, we look at angel and seed investors and startup accelerators for MedTech entrepreneurs.

Finding Investors and Accelerators to Launch your MedTech Startup

Finding finance for a startup can be difficult. Luckily, there are solutions to this challenge!

What Investors Want to See

In general, investors want a return on their investment and as a medical device entrepreneur, you need to demonstrate that your idea will give them that return.

The key elements that will increase your chances of successfully getting funded are:

  • Uniqueness: You need to demonstrate that your device is unique, that it fills a real need, solves a problem in a new way and that there are actual customers for it.
  • Plan: You will need a business plan that includes your market analysis and a full development plan for the device.
  • Expertise: You need to prove that your founding team has the key skills and experience necessary to execute the business plan.
  • Finance: You also have to provide financial information: how much you’ve already spent, what are your expenses, what you expect to spend any investment funds on, what your expectations are of when you will start to see a profit and how the investor can cash out.
  • Prototype: Investors may want to see a prototype of the device.

In these early stages, before your idea is mature enough to approach venture capitalists, you can approach angel and seed investors and startup accelerators for support.

MedTech Angel and Seed Investors

Seed investors invest in early-stage startups and expect convertible debt or ownership equity in return for their investment. Seed investors can be the founders themselves, family and friends and external investors, e.g. angel investors. Compared to venture capital funding, seed investment amounts are lower. Since seed funding involves higher risk because of the very early stage of the startup, investors can ask for higher equity in return. Ownership equity can range between 20% and 50% depending on the investment amounts.

Angel investors are groups or individuals who invest their own money. Typically, angel investors are seed investors, i.e. they invest in companies at very early stages of growth. The only difference is that the money comes from private individuals. Since it is an investment, investors still expect the equity in the company. The ideal angel investors are those who also take an active role in growing your startup by providing mentorship and introducing you to their networks. You often access angel investors through angel groups or angel networks which are member-based networks that pool funds from angel investors and allows you to apply in one place while giving you access to a number of investors.

Angel and Seed Investors in MedTech

Here are a few angel and seed investors that focus on MedTech:

• Investing in US startups

• A list of the top medical device seed investors

• Investing in US, Canadian and Israeli startups

Choose your region and find investors

An international directory of angel investors

Investing in US startups

MedTech Startup Accelerators

Given enough time, you will learn all that you need from experience. Startup or seed accelerators help you speed up this learning process by compressing the years-long learning-from-experience into just a few months.

Startup or seed accelerators are fixed-term, cohort-based programs, that are either privately or publicly funded. Accelerators have the potential to significantly improve the outcomes of a startup because the programs include financial, mentorship and educational components and culminate in a public demo day. While the application process for accelerators is open to anyone, it is highly competitive.

The primary value of an accelerator to the entrepreneur comes from the mentoring, connections, and recognition of being chosen to be a part of the accelerator. Accelerators generally provide enough funding to get a company to demo day, after which the startup is on its own. Accelerators expect the equity in the startup ranging between 4% and 7%.

Startup Accelerators in MedTech

Here are a few startup accelerators that focus on MedTech:

  • Switzerland:

https://www.venturelab.ch/ 

https://www.venturekick.ch/ 

  • US:

 https://medtechinnovator.org/ 

  • Israel:

 https://www.startupnationcentral.org/how-to-benefit-from-the-israeli-innovation/ 

 https://www.incentive-il.com/ 

 https://innovationisrael.org.il/en/program/rd-fund 

  • UK:

 https://digitalhealth.london/programmes/accelerator 

 http://www.medtechaccelerator.co.uk/ 

  • Asia-Pacific:

 https://apacmed.org/ (help start-ups and SMEs)

Aiming for the Best Fit

In our blog post, Do’s and Don’ts when Pitching to MedTech Investors, the first point we raised is that you have to approach the right kind of investor. Investors who have already worked with startups similar to yours will know about the kinds of problems that you can expect and will be able to provide advice and guidance to make your path smoother. Fundamentally, the more familiar that investors are with the MedTech landscape, the more likely they will be to provide support.

So, the first thing you have to do before approaching any kind of investor, even the startup accelerators and angel investors we focussed on in this article, is to confirm that it will be a good fit with your startup.

More Information

We’ve only covered the basics of startup accelerators and seed and angel investors in this article. However, we are medical device development specialists, and we will be happy to help you with creating your business and device development plans and we can even help with creating the prototype. As a trusted partner, ArrowFast can also fill any gaps in your team’s expertise so that investors know you have a solid team behind your idea.

Contact us at info@arrowfast.tech to find out more about how we can help you.

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ArrowFast Team

ArrowFast Team

ArrowFast Team - A group of Medical Device Engineering Specialists

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