Matthew Calleja
16th August 2024
Exploring Alternative Investment Opportunities with MedTech Experts
If you’ve been scouring the MedTech entrepreneurial trenches, you’re likely familiar with the standard routes to funding: high-net-worth individuals, also known as angel investors, and venture capital. We’ve delved into these topics extensively through expert panels and discussions in the recent past.
But here’s the twist: MedTech funding offers a wealth of opportunities beyond these conventional paths. Let’s explore one of the standout panels from MedTech Malta ‘23 and uncover a wealth of expert insights on some exciting, lesser-known funding options for MedTech entrepreneurs.
Alternative Capital
Last year, a standout panel called Introduction to Alternative Capital was expertly moderated by Giovanni Lauricella, Managing Partner at Lifeblood Capital + Talent, and co-moderated by Alberto Chan, Head of Finance & Corporate Development at Lifeblood Capital. The panel was in fact a thorough exploration of alternative capital in the MedTech industry, featuring insights from experts, entrepreneurs, and investors.
A bit about our moderators: Giovanni Lauricella is the Managing Partner at Lifeblood Capital + Talent, bringing 15 years of experience in building MedTech teams. With a Bachelor’s in Finance and a Master’s in Regulatory Affairs, Giovanni has assisted over 500 startups, resulting in $300 million raised and $4 billion in acquisitions. He’s also an active board member and angel investor.
Alberto Chan is the Head of Finance & Corporate Development at Lifeblood Capital, with a background in VC/PE and extensive experience in healthcare startups across Brazil, China, and the U.S. His expertise includes fundraising, valuations, and healthcare analytics, and he’s passionate about MedTech, women’s health, and innovative healthcare solutions.
For the panel, they were joined by fellow experts and executives:
- Omid Akhavan | Managing Director | Anthro Ventures
- Specialising in healthcare investments in MedTech, Health Tech, and Diagnostics, Akhavan holds a Master’s in Bioengineering from Johns Hopkins and a Bachelor’s in Biomedical Engineering from the University of Virginia.
- Ken Nelson | Partner / Director | MedTech Advantage Fund / Several Boards
- With over 10 years of experience in digital health, wearables, and cardiac remote monitoring, Nelson offers deep insights into commercial strategies for disruptive technologies.
- Humberto Matsuda | CEO and Managing Partner | Matsuda Invest
- A venture capitalist with 15 years of experience in investing, M&A, and strategic consulting, Matsuda holds an MBA and a BS in Law.
- Matthew Jacobs | Principal and COO | Cedar Street Group, LLC
- Jacobs is experienced in diverse projects including spinal cord injury research and renewable energy policy impact.
- Mercedes Tuin | Director of Life Sciences and MedTech Investments | Brabantse Ontwikkelings Maatschappij (BOM)
- Tuin is currently responsible for overseeing investments in innovative therapeutics, diagnostics, and healthcare solutions.
Let’s Talk About Family Offices
Family offices occupy a unique space in the funding landscape, blending the personal investment approach of angel investors with the capital power of institutional funds. They’re elusive, operating through personal networks rather than being easily found online.
While angel investors write smaller, emotionally driven checks and VCs manage others’ capital, family offices make decisions that straddle both worlds. For them, a $1 million investment in a startup might be significant for the entrepreneur but is often just a drop in the bucket for a family office with hundreds of millions in assets.
This creates a complex and nuanced investment dynamic. Lauricella posed a compelling question to the panel: “Where do family offices truly fit within the investment spectrum when it comes to backing medical device startups?
Knowing Who They’re Backing
Matthew Jacobs highlighted the intimate and emotionally invested approach that smaller family offices, like his own, take when deploying capital.
“With an annual investment goal of around $3 million, typically in check sizes of $500,000 to $1 million, we’re all about the importance of truly understanding and supporting the companies we back.”
He advised that, much like competitive research, entrepreneurs should delve into the investment history of potential investors using platforms like Crunchbase. This helps identify family offices with a focus and track record in similar ventures, offering a more targeted path to securing capital.
Unpredictable Investments
Humberto Matsuda delved into the complexities of working with large family offices, especially those with assets exceeding a billion dollars. He explained that these families can invest anywhere from a few hundred thousand to several million dollars, but the decision-making process isn’t always straightforward.
There are several factors that are considered by family offices, but investments can be unpredictable, sometimes being driven by a family member’s personal interest or a serendipitous encounter, rather than a formal mandate.
Finally, he highlighted: “Corporate governance often prevents families from investing in sectors related to their core business. This is a tricky nuance that many first-time fundraisers overlook.”
Building Trust with Diverse Family Offices
Omid Akhavan underscored the diversity within family offices, ranging from active businesses to generational wealth entities like the Rothschild family. He pointed out that understanding what a family office values is crucial for success. For instance, his family invested in stroke-related ventures due to personal experiences, illustrating how deeply personal motivations can drive investment decisions.
On a note similar to Matsuda’s, Akhavan also suggested that while some family offices have structured approaches similar to venture funds, others may lack such organisation, making it vital to grasp their capacity, interest, and decision-making processes.
Similarly noting the diverse nature of family offices, Mercedes Tuin talked about how building a relationship of trust with them can be highly beneficial. She advised CEOs to explore local government-backed funds, as they might have strong networks with family offices and angel investors, potentially facilitating valuable introductions.
The Value of Accelerators
“There are a tonne of accelerators out there that one shouldn’t dismiss and ignore,” suggested Ken Nelson, who emphasised the value such organisations like MedTech Innovator bring.
Many of them have additional funds and grants available, which can be a valuable alternative source of capital. Despite the paperwork, he encouraged startups to explore these non-dilutive options, as they offer significant financial benefits without giving away equity.
Join MedTech World in Singapore and Malta!
As summer peaks, picture yourself walking down the historical ramparts of Valletta on a chilly autumn afternoon in Malta. Gear up for MedTech Malta in Valletta from November 6th to 8th. This is your prime chance to dive into cutting-edge healthcare innovation and connect with industry leaders.
Plus, mark your calendar for MedTech World’s debut in Singapore this September. Stay tuned for updates and be among the first to experience these groundbreaking events!