How to Run Your Medtech Startup on a Budget

Ahmed Zobi, a biomedical engineer by training honed his skills in tissue engineering, micro/nanotechnology, and lab-on-a-chip microfluidics during his undergrad at the University of California, Irvine. During his time at the UCI BioEngine program, Ahmed brought together a team to work on a lab-on-chip microfluidics project that already had some IP. 

There was an existing concept, but it was facing issues like leaking, implosions, and breakage. Improving it meant a significant upgrade in the technology, particularly to be used in fat grafting. “When we took on this project, we saw a huge unmet need to truly automate this process by literally pressing a button, walking away, and coming back,” Ahmed explains. His team had some conviction so they pressed forward on the idea, which eventually became the foundation for Syntr Health Technologies. 

Syntr’s flagship product SyntrFuge System is a microfluidic channel design. The name hints at a centrifuge, the process of spinning things very fast to separate different parts of a mixture by their densities. However, SyntrFuge is not a centrifuge device. It doesn’t separate the cells, but breaks them down by passing them through different channels. It’s basically an efficient processing tool that allows clinicians to process adipose tissue quickly by breaking down fat cells to a very small size, boosting retention potential and giving practitioners confidence in transfer. “We're basically replacing other fat processing techniques that are out there that are more manual, providing an automated solution to the clinician,” explains Ahmed.

Currently, SyntrFuge is mainly focused on aesthetics and plastic surgery. Clinicians can efficiently harvest and process a patient's adipose tissue and inject it into the desired area, providing a natural alternative to synthetic fillers. Beyond aesthetics, the system also has potential to be used in surgeries in orthopedics, podiatry, dermatology, and more.

Syntr received FDA clearance and completed a clinical trial for facial fat volume loss, with results due in 2024. The team is also conducting another clinical trial in wound care to explore different applications for the device. Currently in early commercialization, Syntr is raising a Series A to fuel a full-scale launch. 

Key Learnings From Ahmed’s Experience

• Embrace a lean mentality, move forward with your available resources, and challenge every expense. Don’t let the pursuit of perfection paralyze you and don’t waste time and money over-engineering early versions. Prototype rapidly to seek real-world feedback to guide your next steps and be prepared to pivot if necessary. 
• Focus on meeting FDA’s core requirements first. Don't get bogged down trying to add extra bells and whistles to early prototypes and submit as soon as you can to kickstart a productive dialogue with the agency. Even if you don't get immediate approval, the prescriptive feedback will guide your path forward. 
• VC funding might not be an option during the early days of your startup. Explore all opportunities like grants, accelerators, and any niche programs that fit your technology. When it comes to non-dilutive funding, submit strong applications early, even if they aren't perfect. And don't be afraid to cast a wide net across relevant NIH departments. When approaching VCs, research their portfolios and track their records. Show them how investing in you fits their specific goals and strategies.

Build Something Imperfect on a Budget

As someone who started innovating during his undergrad years, Ahmed knows firsthand the challenges of building a medtech startup on limited resources and the importance of maximizing every dollar.

Startups demand a mindset of decisive action. Don’t let the pursuit of perfection paralyze you. Practicality and forward momentum are what keeps your venture viable. 

In the early days of Syntr, Ahmed reports, it was all about getting things done quickly, validating them rapidly, and being prepared to fail and learn from it. He shares, “You often see CEOs and startup founders get married to their idea of a product that it has to be perfect. They spend five years working on an app or a medtech device that ultimately goes nowhere because they can’t let go of perfectionism.”

Case in point: the first functional prototype cost the Syntr team around $30 in materials. It was quite rudimentary. In an attempt to build a functional model, they used a simple spin chuck motor encased in thick aluminum pieces, hoping that if any part broke, it would be contained by the aluminum. The goal wasn’t to skimp on safety, but their main priority was to get to proof-of-concept versus designing a polished product. They developed five or six prototypes within a month and a half and reached something they could call their alpha. 

Ahmed stresses the value of using early prototypes to generate data for FDA submissions. “If your FDA pathway requires clinical trial data, you can get the data off your prototype, even if it’s an early prototype. As long as the design, the underlying workings and mechanism of the product are the same.” Don’t chase perfection early on. Remember, even a somewhat ‘janky’ prototype can yield valuable data if the underlying technology works. Ahmed says, ”I personally like real-world data versus the expense of clinical trials because the real-world data is what doctors are going to talk about at conferences.”

To move efficiency during the early development phases, you have to understand who’ll actually use your device. While surgeons are critical, Ahmed emphasizes getting input from the full spectrum of potential users. There are some aspects that the surgeon doesn't think about, but the nurses or other staff do. “If the nurse or the scrub tech doesn't like your product, it isn't going to be used in the OR no matter how much the surgeon loves it,“ Ahmed shares.

Prioritize Regulatory Approval and the Rest Will Follow

Balancing regulatory requirements and clinical trials is one of the central challenges for medtech startups.

During the initial days, Syntr’s situation was complicated by COVID-19 where the EUA authorizations slowed down nearly all other FDA clearance timelines. Based on a predicate, the SyntrFuge system was subjected to a 510(k) class II pathway, which didn’t require clinical data. Ahmed had to manage his budget between clinical trials, regulatory affairs, and internal payroll; ultimately, regulatory approval took priority. Today, Ahmed’s bias is to prioritize fulfilling the FDA requirements first. Once you have clearance, you can gather real-world data and possibly pursue clinical studies if needed. This, of course, applies to companies with faster regulatory pathways such as 510(k). 

While pre-submission meetings with FDA can be helpful to start a dialogue, Ahmed cautions that they don’t guarantee smooth sailing. “There will never be a perfect path forward, because the FDA can tell you something in the pre-sub, and they could still ask for more things after you've submitted,” Ahmed reflects.

“If you have a quick regulatory pathway, my advice is to just put whatever you have forward, and avoid anything extra,” Ahmed explains. “Once submitted, you lock FDA into a bona fide agreement, a time frame for a response.” If your application doesn’t get rejected, a submission creates a dialogue that guides your path forward—and it’s best to start the conversations as soon as possible. 

FDA clearance offers significant benefits beyond market entry, opening the door to partnerships and commercialization opportunities. Ahmed says, “Your product could be the secret sauce to another product in the same field.” Distributors can bundle your product with others, boosting sales and reach. “You don't see that happening if you just have clinical data.” Ahmed explains. “But if you have the regulatory approval, you're out there, you're working, you're hustling in the market, and you're expanding your network to distribution partners.” For example, since Syntr’s clearance, the company has been approached by several companies that were interested in bundling the SyntrFuge with other products.

Exhaust All Funding Avenues

Securing funding is a make-or-break challenge for medtech startups. Ahmed emphasizes the importance of exploring all potential avenues and being resilient. 

VCs and potential acquirers are typically looking for commercial-ready startups. Showing that your company is on a fast-track to potential revenue is a motivation for capital holders – and it should be your number-one priority. 

On the other hand, non-dilutive funding sources like SBIR grants can be pivotal for early-stage innovation. Ahmed was the youngest candidate to ever receive a phase 1 SBIR grant back in 2017. For those pursuing similar kind of funding, Ahmed’s advice is action-oriented: “Apply early, apply often.” Again, don’t let perfectionism stall your progress. He elaborates, “You can only guess what they potentially want to see. Put in your application early. When I say early, I mean as soon as you possibly can.” Remember, the funding cycles do take some time, between 9-12 months depending on the deal. 

Grant writing is undeniably an overwhelming process. While outsourcing to specialized firms can be useful, they can never guarantee funding. In Ahmed’s words, “They are only as good as the information that you give them. And if you don't have any good information, they can't pull things out of thin air.” It’s really important that you understand what goes into the process and build your grant-writing muscle before you hire help. You can use programs that help applicants learn how to submit SBIRs like the NIH SEED, and tools like NIH Matchmaker that match your product summary with institutions that your technology potentially falls under. If you do hire outside help, seek writers who understand your field and, ideally, have a success-based fee structure, which is around 4% to 7%, according to Ahmed.

When it comes to other sources of funding like venture capital, Ahmed points out that they are your customers, too. You need to know what they’re looking for and tailor your pitch accordingly. Not all VCs are the same – some might prioritize societal benefits and just want their initial investment back, while others might seek a 5x return. The key is to know your audience. Just like you understand your users, the regulatory pathway, and your grant funding process, you should also understand your investors. If you focus solely on the product, or the idea, you miss the VC’s perspective. You have to break it down like you would your regulatory strategy, or your user research. If you want investors to buy into your vision, you need to understand their needs first.