What it Takes to Get a Medtech VC to Say Yes

Sequoia Capital, Thrive Capital, and Greylock Partners reportedly made a x2 ROI in just 2 weeks when Facebook acquired Instagram for $1 billion. Yes, x2 ROI in 2 weeks!

With that said, why in the hell are VC firms still interested in funding medtech companies when only 50% of all reported exits are less than $100 million and the average cost of obtaining a PMA is approximately $94 million? More importantly, what does it take for medical devices companies to get a “yes” for those VCs still interested in forking out some cash? Good questions, eh?

Enter Lisa Suennen, Co-founder and Managing Member of Psilos Group, a healthcare-focused venture capital firm with approximately $600 million under management. She also serves as a Director on the Board of several Psilos portfolio companies, including AngioScore (Chairman), PatientSafe Solutions, OmniGuide, and VeraLight (Chairman). Lisa holds an M.A. in political science, a B.A. in political science, and a B.A. in mass communications, all from the University of California, Berkeley. Lisa is also a visiting lecturer at the U.C. Berkeley Haas School of Business.

In this interview with Lisa Suennen, we learn how and why medical device companies will need to adjust and modify their business models in order to succeed in today’s healthcare environment.

Interview Highlights with Lisa Suennen

• What does Lisa think when the goal of physicians is to “dagger historical price lists” and “think twice about using advanced technologies when older, cheaper versions are available”?

• Why is healthcare the red-headed stepchild in the world of venture capital?

• Key action items for early-stage medtech companies. Discussion points include: 1) economic vs clinical considerations; 2) true innovation vs incremental advances; and 3) early focus on reimbursement.

• Why Lisa and her partners at the Psilos Group favor late-stage deals in our current economic environment.

• What’s more important in the eyes of medtech VCs? Quality improvements vs cost reductions vs. reimbursement?

• Corporate venture capital arms: friend or foe? Also, what does Lisa think about crowdfunding for medical device companies?

• If you’re an early-stage medical device company, what is the best way to get the attention of Lisa Suennen and her partners at the Psilos Group?

• Lisa’s lasting advice for ambitous medtech doers.