I’ve again included some non-VC firms in the list, as financing can sometimes come as debt, private equity and/or sales-of-future-royalties. I’ve also included some announcements from firms that are no longer investing, as it’s best to identify those firms early.
According to PWC’s recent quarterly MoneyTree report, no new medical device companies achieved Series A fundings in New England in either Q2 or Q3 2013. Zilch, zip, zero, nothin’, no, nada.
I’ve been tracking first-time venture financing of medical device companies in Nw England since 2005. You’ll find the link to my latest list of these companies at the bottom of this post. I wish I had a better update to offer.
Every once in a great while I read something so well stated that I put down my book/ipad/kindle and just reflect.
So when I recently read a post from Mike Sellers on Quora, I had to share it with you. Mike was responding to the question “As first time entrepreneurs, what part of the process are people often completely blind to?”
Mike wrote beautifully about software companies (read his original post here).
Like virtually all cataract surgery patients, my parents were thrilled with their cataract procedures. Why not? After a quick office procedure, their new intraocular lenses (IOLs) gave them better vision than they had experienced for more than a decade.
Now imagine a world with no devices for cataracts, only drugs. Imagine taking one or more medications every day for the rest of your life – drugs which could not cure cataracts, but which slow the inevitable progression towards blindness. Imagine the typical chronic-medication side effects: somewhere between minor discomfort and an increased risk of cardiovascular mortality. How does that sound?
When given a choice, I’ll take medical devices over drugs every time. Here’s why.
The latest quarterly MoneyTree Report was just released, providing some insight into the state of medical device venture funding in the US. I downloaded and plotted the historical trend data for medical device VC investments in the U.S. from Q1 1995 to Q1 2013. Click on the thumbnails for larger images.
In the eight years of data I’ve collected on New England medical device company venture funding, I’ve never seen it this tough. Only four new companies were funded in 2012 (see my complete list below).
You might be tempted to blame VC belt-tightening or the “Patient Protection and Affordable Care Act.” You’d be wrong. While the macro environment has its challenges, four new NorCal medical device startups were funded in Q4 alone.
Ask most medical device marketers about market segmentation, and you’ll get an earful about physician specialty (and subspecialty), hospital/facility size or type (academic, ASC, for profit, large system, etc), or adopter type (early adopters, followers, and skeptics). Unfortunately, these approaches rarely help companies identify customer groups that are differentially addressable – i.e. best served by different products or services, different price points, and/or different marketing channels and sales techniques.
Medical device firms can do much, much more to understand and better serve their markets. Even back in the 1980’s much more could be done. Let me explain how I approached market segmentation twenty-something years ago.