While raising investment can be a big step for a Med Tech company, this is just the start, as the real value for the founder-investor relationship begins once the finance is complete. Med Tech companies need to support clinical validation, regulate, develop product, access reimbursement, and commercialize before achieving their potential.
These challenges require more than financial resources. They call for sound judgment, strategic guidance, industry connections, and consistent collaboration. Through its discussions and partnering opportunities, LSI Europe brings together founders, investors, and industry leaders who understand the importance of building relationships that support sustainable Medtech growth.
Why Investor Relationships Matter in Medical Technology
Med Tech players very rarely take an entirely linear route. Clinical results could necessitate product changes, regulatory input could impact the project timeline, or reimbursement issues could lead to a different approach for the commercialization plan.
An experienced investor can step in as a fresh set of eyes and be a sounding board for founders in these crucial stages.
Founders are on average in the dark about an investor relationship. It’s not someone else making all the business decisions for them, but rather a set of conditions that engenders sharing problems, validating assumptions, and making better decisions thanks to the investor’s experience.
Fundamental to the best partnerships is the combination of founder knowledge of the technology with investor financial, operational and strategic competence.
What Smart Capital Brings to a Medtech Company
Smart capital is investments that include more than just money. Smart capital can help in many ways depending on the investor’s experience and network.
Commercialization Planning
Veteran investors can advise founders on a go-to-market plan, brainstorm with them on who their target customers will be, and separate out the commercial milestones worth focusing on. In addition, they might be able to warn companies about pitfalls faced when commercializing a product.
Leadership and Board Development
Finding the right executives and independent directors becomes critical as your company scales. Investors may provide candidates with experience in medical devices development, regulatory, finance, sales and healthcare commercialization.
Strategic Partnerships
Links to major players in Med Tech, healthcare and suppliers of acquisitions: Links can be used to develop partnerships which can provide validation for the product and feasibility for development, distribution, licensing or sale.
Future Fundraising
Those who have followed the company’s development might be able to offer insight to help founders get ready for their next financing round. They might have feedback to give on the fundraising document, company metrics, valuation targets and proof desired by future investors.
Clinical and Regulatory Challenges
In the event of delays in a clinical study or unexpected regulatory changes, savvy investors can aid founders in assessing the potential consequences and realistic next steps.
The aim is to assist decision making rather than take full operational responsibility, which is so often the case with external support.
Transparent Communication Prevents Misunderstandings
A lack of established expectations can cause many disputes between founders and investors. Disagreements over reporting, spending, timelines and even strategic direction can quickly become unraveled when communication has not been consistent.
Frequent board meetings, open and honest assessment of risks, and regular financial reports can prevent a minor conflict from turning into a major dispute.
When a setback occurs, transparency is crucial. If the study is late, it’s important to be transparent with an explanation for the delay and the action you will take. Unexpected expense? Tell stakeholders about it.
Early adopters of knowledge on the hurdles can be better prepared to offer valuable help. And, up front interaction reveals that management is capable of identifying issues and acting responsibly.
Build a Board That Supports Strategic Progress
The board of a company should be more than a trophy and credentials. Good directors possess the resources needed by the business.
Early stage Med Tech companies can use help with clinical development, regulatory strategy, raising funds and product engineering. The more advanced company poised to commercialize needs more help with reimbursement, distribution, market access and organisation growth.
Independent directors can be objective and help represent the interests of founders, investors, employees and future shareholders.
Founders should now be thinking: What role do we want each director to play in the strategic decision making, management of risks and future development of the company?
Adapt to Change Without Losing the Vision
Clinical data, regulatory pathways, market requirements and reimbursement are all elements that can dictate the direction a Med Tech company takes.
Robust ties with investors have driven founders’ responses, of course without distracting from the business opportunity and clinical problem.
For instance, after conducting a usability test a company may decide to change its features of their product, or after commercial research it may decide to target a different segment. Investors with knowledge of these fields can help assess the impact of these changes on their milestones and funding.
We want to stay flexible, but at the same time, keep moving in the right strategic direction.
Where Founders Can Develop Investor Relationships
Establish positive relationships through repeated conversation, properly introductions and multiple chances to talk about the business.
LSI Europe connects startup founders with venture capital investors, private equity, strategic Med Tech and innovative clinicians. These relationships enable founders to meet fellow entrepreneurs, learn from the broader industry, and foster relationships that extend well past the current funding round.
International businesses also can gain further contacts and discover new opportunities within a specific trade group.
How to Strengthen Your Investor Partnership
Founders can improve investor relationships through a few consistent practices:
- Early on in the partnership, align on your group’s culture with your company, including how decisions are made.
- Keep us updated on the status of your progress and share difficulties and updates to estimated timelines.
- Consult on an as-needed basis but maintain a position of overall management.
- Focus board meetings on strategic issues and priorities and away from historical performance.
- Determine if the investor has networks and skills that will be of help in achieving the enterprise goals.
Such action helps facilitate a more positive working environment when working with others, while also helping to diminish unnecessary disagreements.
Looking Ahead
Founding a successful Med Tech is a long journey, requiring time, proof and execution. How do you find an investor that brings not just capital, but also honest communication, experience and shared long term value creation?
For founders interested in connecting with investors and strategic partners, LSI Europe offers exposure to the larger Med Tech community, and chances to meet additional companies to help accelerate your growth.