When determining which event tent fabric manufacturer is right for your tent rental company, there’s a lot to consider.
How to Attract Investors as a Medical Device Manufacturer
We’ve assembled some advice for startup medical device companies hoping to make a compelling business case to potential investors.
Medical device startups rely on venture capital (VC) firms to fund their development and get them over financial hurdles on the path to a product launch and future success. Attracting these investors is an essential skill, and successful manufacturers know exactly what VCs are looking for. Here is some advice to ensure your medical device company makes a compelling business case to potential investors.
Healthcare Business Plan
First - as part of any presentation to investors, device manufacturers should be able to demonstrate that their product or products have sizable market opportunities that allow the funder to recoup their initial investment and earn much more on top of this.
Going hand in hand with this, the devices or technologies must address some unmet need in the medical space. This can range from an entirely innovative product to some variation that provides savings, greater efficiency, or improved safety through quality.
While these two components are the first things VCs will analyze, they will often hesitate to invest unless a strong management team is also in place. Medical device startups must prove that its leaders have relevant experience, an eye toward talent acquisition, and the ability to bring products to market in an efficient manner. When meeting with investors, manufacturers should always be prepared to respond to questions with answers that demonstrate the above qualities.
Investors also want manufacturers to be able to quantify the market opportunity using real-world numbers. At the same time, they expect the market potential of the product to be detailed using comparisons to existing devices. Finally, manufacturers should be prepared to defend their leaders and engineers’ track records and their ability to execute the business plan as outlined.
Ultimately, the investor’s decision will come down to do an analysis of how likely they are to get a high return on their investment. Thoroughly answering their questions with examples, comparisons, and hard numbers is the best way to make the case.
Here’s a further look at how to set your business up for success:
Understand what investors want
Beyond the particulars of your product, investors will also want to know your strategy for dealing with existing market conditions. Very few device manufacturer startups remain independent companies that will eventually go public. Most end up selling their devices, technology, or overall organization to a large device and diagnostics companies. VCs know the most likely pathways to success, so they will want to know the chances of acquisition. It’s important for startups to be able to point to larger corporations that may be interested in their products.
Understand your business model
Investors expect start-ups to have a clearly articulated business model, complete with how the product will be positioned in the marketplace. It’s essential to answer the question: why would someone want to fund this?
The best device business plans will clearly differentiate a company’s products from other devices on the market by emphasizing technology, price, quality, or efficiency.
Build a rock solid management structure
Even device manufacturers with unique products and strong market opportunities are turned down by VCs. The most common reason is that the investors don’t believe the existing personnel can deliver on the promises outlined in the business plan.
Having a rock solid management structure with talented leaders gives VCs confidence in a company’s ability to execute successfully. On the other hand, lacking talent in key roles and having leaders stretched thin by taking on too many responsibilities are often viewed as key warning signs. Successful startups take the time to develop effective business management in order to put investors at ease.
Hire talent with a proven track record
VCs will also scrutinize the track records of a company’s current leaders. It’s important to fill your ranks with people who can make the business plan happen. Attracting team members from well-regarded corporations with a track record of success with medical devices or technology is often seen as a positive sign.
Understand the importance of product quality
Ultimately, medical devices will succeed in large part on their quality. Trying to put together a business plan based solely on cheap materials can often be misguided when manufacturing for the medical field, where safety remains paramount. On top of this, being known for high quality materials, such as the best medical grade fabric, can help build a firm’s reputation. Such materials also make a product more durable and safer.
To attract the interest of medical device investors and seal the deal, device manufacturers must have all the key pieces in place. Don’t approach investors unless you can clearly demonstrate your product’s unique place in the market, quantify what that market is, and prove you have the right team to make it happen.