Medsider: Learn from Medtech and Healthtech Founders and CEOs - Building Resilience Through Rejection: Interview with Transverse Medical CEO Eric Goslau

Episode Date: October 16, 2024

In this episode of Medsider Radio, we sat down with medtech veteran, Eric Goslau, the co-founder and CEO of Transverse Medical. His startup is developing the Point Guard Cerebral Embolic Protection device that shields the brain from debris during cardiovascular procedures, reducing the risk of strokes. Co-inventor of Point Guard, Eric has 29 years of experience in leadership roles across sales, marketing, and product development. At Transverse, Eric oversees all aspects of the company, including fundraising, clinical planning, and regulatory strategy. He has successfully raised over $14 million through innovative financing strategies.In this interview, Eric shares how his background in sales helps him manage various functions of the company, how fundraising cycles have worked for Transverse, and his philosophy when it comes to product development: the enemy of good is perfect.Before we dive into the discussion, I wanted to mention a few things:First, if you’re into learning from medical device and health technology founders and CEOs, and want to know when new interviews are live, head over to Medsider.com and sign up for our free newsletter.Second, if you want to peek behind the curtain of the world's most successful startups, you should consider a Medsider premium membership. You’ll learn the strategies and tactics that founders and CEOs use to build and grow companies like Silk Road Medical, AliveCor, Shockwave Medical, and hundreds more!We recently introduced some fantastic additions exclusively for Medsider premium members, including playbooks, which are curated collections of our top Medsider interviews on key topics like capital fundraising and risk mitigation, and a curated investor database to help you discover your next medical device or health technology investor!In addition to the entire back catalog of Medsider interviews over the past decade, premium members also get a copy of every volume of Medsider Mentors at no additional cost, including the latest Medsider Mentors Volume VI. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, if you'd rather read than listen, here's a link to the full interview with Eric Goslau.

I think the sales guys or gals, whoever they may be, make the best early stage CEOs only because when you carry the bag, you fully appreciate what it takes to get from, you know, the beginning of a sale all the way through to a yes. And in that course of that time, I'm asking you poor, 99% of time you hear no. And I think what it does is it ingrains into you and deep into your soul the ability to persevere through the hard times. Welcome to Medsider, where you can learn from the brightest founders and CEOs in medical devices and health technology. Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world. Now here's your host, Scott Nelson. Hey everyone, it's Scott in this episode of MedSyter. I sat down with Eric Goslow, CEO of Transverse Medical.

Eric has nearly 30 years of experience in leadership, commercial sales, marketing, product development and entrepreneurship. At Transverse, drawing from his extensive experience, especially in commercialization, Eric oversees all aspects of the company including fundraising, clinical planning, regulatory strategy, and product development. He has successfully raised over $14 million through innovative financing strategies. Here for the key things that we discussed in this conversation. First, a technical background is great for a CEO, but sales experience adds unique value.

It sharpens the skills needed for initiatives like creating clear, stage-specific execution plans, Staying focused on measurable progress and handling setbacks with persistence. Ultimately, a CEO's job is to sell an idea both to investors and the team. Second, fundraising is seldom a straight line. You'll get money from different places like family offices, high net worth individuals, and angel investors. Don't worry about sticking to traditional labels related to raising capital. Get the right amount of money for where you are now.

One thing that's immensely helpful is having a lead investor who can back you across multiple rounds. This entity your firm can guide other investors and support you through each stage of growth. Ultimately, remember that fundraising is a cycle. Start each stage with the next in mind. Third, don't get stuck aiming for perfection. Get into the market faster with a quote-unquote good enough device for early traction and investment. For that, move to clinical trials as soon as possible to learn and iterate based on real data. If you can, start with a simpler version to meet regulatory requirements that then refine and expand in phases to build momentum and attract support.

Before we jump into this episode, I wanted to let you know that the latest edition of MedSider Mentors is now live. We just published Volume 6, which summarizes the key learning. brings from the most popular interviews over the last several months with incredible entrepreneurs like Dan Rose, former CEO of Limflow, Dr. Stephen Michelson, founder of Ferrapulse, and current CEO of field medical, and other leaders of some of the hottest startups in the space. Look, it's tough to listen or read every Medsider interview that comes out, even the best ones. But there are so many valuable lessons you can pick up from the founders and CEOs that join a program.

So that's why we decided to create Medsider mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs in one central place. To check out the latest volume, head over to MedsiderRadio.com forward slash mentors. Premium members get free access to all past and future volumes. And if you're not a premium member yet, you should definitely consider signing up. In addition to every volume of Medsider mentors, you'll get full access to the entire library of interviews dating back to 2010. You'll also be able to see all of our playbooks, which are thematically handpicked collections of the most insightful interviews covering topics like capital fundraising, early stage development, regulatory challenges, reimbursement, M&A, and much more.

And last, considering that fundraising could be one of the most daunting tasks for any startup, we curated a database of over 700 VC funds, private equity firms, angel groups, and more, all eager to invest in medical device and health technology startups. Access to this database is a premium member exclusive, so don't miss out. Learn more about Medsider Mentors and our premium memberships by visiting MedsiderRadio.com forward slash mentors. All right, without further ado, let's jump right into the interview. Eric, welcome to Medsider Radio.

I appreciate you coming on, man. Yeah, you bet. you. Thanks, Scott. I know you're in the heat of fundraising. I especially appreciate your time. I'm looking forward to the discussion, learning a little bit more about your journey, as well as the company, Transverse Medical. So with that said, I reported a very short bio-a-thaus of this interview, but I always like to start here. If you want to give it kind of an elevator-style overview of your background leading up to a step-again, your company, and stepping into the role as CEO, that'd be helpful. Sure, absolutely. Yeah, so my family's kind of been in the business for quite some time. Actually, I got introduced to it through my dad,

Goslob. He's now about coming up on his 81st or 80 second birthday. But his, he was in with American Pharmacy out in Long Island back in the 60s coming off of the three tours in Vietnam. Then he got an opportunity to come out to Colorado. And then he hooked up with a small company called Valley Lab, which was now acquired by Medtronic. So small to very large. I grew up around all that MedTacan medical device, all his friends. And we always had visitors from doctors and things like that. So it's always been around me and in our family, so to speak. So throughout college, then, I did a couple of internships in MedTech that were up in the Boulder area because they graduated from University of Colorado in Boulder. And that kind of gave me a good flavor for the appreciation of all

the ins and outs and everything that needs to be done in a MedTech company, which is more than just having a product to sell. So I got to see a lot of different departments, development inside of things, packaging, customer service, you name it. During that, I actually got an opportunity to go out and interview or go out and support some conferences, and one of them was the ARN, which I think a lot of people know what that is. And I met with some folks in J&J. And so my first job actually out of college, and there were other, obviously other interviews, but J&J had a program called the RCG or recent college grad, right? So they'd take people that have a little bit of medical device background or technology experience coming off the college side of things. I have the

internships and they put you into territories where you probably don't want to be. The time they put me into Farrow, North Dakota, which now, past forward today is a really nice place, but at that time it was a little cold and not a lot to do for a 22 year old. So I quickly transitioned. I evolved and went to a couple of different companies, Everest Medical, and then eventually landed at Guyton. And Guidant is really where I got my passion for cardiovascular and the peripheral vascular space. And so Spence probably carrying the bag early on

about 16 years, just in the general space of cardiovascular laparoscopic was the company out of Everest Medical. But yeah, that was the better part of carrying the bag was 16 years and learned so much from going out and hearing no 99% of the time to eventually get to yes. And so from that, I ran into a gentleman by the name of Brad Lees.

And Brad Lees, and I worked together at Cordes, which was one of the other companies that I worked for. We were both carrying the bag. He was a regional manager. And then I took an opportunity to go to Seattle and work for a company called Spectronetics, which is a laser-based perfolling cardiovascular company and lead extraction. And Brad was out there as well. And so that's where we met up. And that's where the concept around the point guard was born.

and we basically started to develop the company. And I always had a passion to get into medical device development and business development, having observed my dad at the lab, but he also did a couple of startups as well. So I had that bug in me to go out and start a company for Ground Zero for better or for worse. And so that kind of fast tracks to where I'm at today. And in a bundle there, you get an idea as to the last 29 plus years of Eric Goslow. Yeah, that's super helpful. Well, yeah, I'm sure there's more of the story, which I hope will uncover maybe a little bit of that.

We're in the next 30, 45 minutes or so. But I always can tell startup folks, because they'll use line like you just use, like for better or worse, or are you sure you want to do a startup? So they all sound sexy and don't. They'll give you wrong. You're a lot of fun if you had, but they're not for the faint of heart. A lot of ebbs and flows and ups and downs and always spires to be put out. With that said, it looks like, based on my research, it looks like you've been at the found a transverse,

gosh, close to almost 15 years ago now. Tell us a little bit more about the point guard. the hero device, if you will, and really the key need that you're trying to solve for. Yeah, sure. So point guard, as I mentioned earlier, was from Brad Lee's. He's the conceptual eventor. And he and I knew each other at Cortes end of vascular. Brad came to me initially because his father-in-law actually had a stroke following a basic coronary intervention.

And he said, it just kills me that we're out here. We're representing medical devices with trying to save patients' lives, but then I couldn't help help my own father-in-law. And he said, so I've got this idea. And I said, okay, happy to hear about it. So he started to tell me about it and going through the concept of what actually was occurring. And we were primarily initially focused on coronary interventions, which only had about a probably about a 1.2% stroke rate. But it was also around that time, too, after doing some diligence and some research,

that we realized that there actually was a bigger unmet need or clinical need for protecting patients against stroke. And that was in the up-and-coming taber procedures. So this was back around 2011 time frame, right? We didn't even have, or the U.S. didn't even have an approved Havre device. But the clinical trials was showing that stroke were 6 to 6.2, 6.5%. So we started to look at how that procedure was being done, how the devices were coming into the anatomy. And with the concept of what Brad or Bradhead presented to me, the point guard, it just made really good sense. That was the area or the procedure that we should be focusing in on.

I pulled the short stick. This is another one of those things that you probably hear from a lot of entrepreneurs, right? Yeah, I pulled the short straight. So here I go. And I said, shoot, I'll do a lot of the intellectual property. I'll file the first patent and I'll start digging into that. And so when we started doing it, we saw that we had freedom to operate and we had a good idea. And then we had to raise money.

And so that was the next challenge. We said, hey, we got a place to go. We've got a great idea. There's certainly a clinical need. The unmet need is being able to cover all the vessels. And there were a couple other players at that time that we knew of, which were like Keystone Hearts, which is no longer to be found these days. And then Sentinel, which was owned by Claret Medical,

and they had the two-filter technology that goes up into the right and left friday. They've now since been acquired by Boston Scientific. So that was a space that we had to deal with. And that's how point guards started to get going. And we landed a convertible note or seat around, essentially for around a half a million and that kind of got us going and getting the IP file

and then doing some pre-concept work. So I'll pause there. You can dig into that a little bit more if you like to. Yeah, no, it's good. And if you listen to this and want to learn more about the actual technical details of the device, the point are that Eric referenced

transversemedical.com is the website. So transverse medical, just as you think it's spelled transversemedical.com And they've got a great kind of overview video and overview of the device in more detail. So that's super helpful. You're basically solving for stroke to prevent a stroke, right, through ballad protection. And then where's the company at?

Give us a sense for where you're at in terms of stage. We're recording this in almost Q4 of 24. Yeah, so I'll go back to the beginning. Essentially, we founded the company back in 2012. We got our seat around a capital coming in there, which helped get things going. So in the course of doing prototype and concept development or engineered prototypes, we probably went through 50 or 60 different types of concepts to try to figure out what was going to work, right? I'm working with various contract manufacturers and other engineers and scientists,

but we eventually moved forward with our progress and got into what we call point guard 1.0, right, or the first generation point guard. That device we took all the way through a first inhuman clinical trial in Germany. We ended up doing about five total patients. It was designed to be a CE mark study, but we quickly and rapidly learned that after putting it in human, which is a key step in development, right, outside of putting things into simulation or doing things in bench models and such. We learned quickly that we were slightly off of our par for what we wanted to achieve with regard to full protection.

And it had to do a lot with the limitations of the anatomy or full appreciation for the anatomy and that of the mechanical capability of what we were trying to develop. Trying to bring those two geometries together is the art of, medical device development, really in the grand scheme of things. So we quickly realized, okay, let's take a pause. Let's go back and see if we can address this on the bench. We learned real quick that, okay, we were slightly off, we could do a lot better. And so we went into, this is probably around 2018 is when we went into the first of human

and then early 2019. We went into modification, though, to modify that first generation device. We started that modification process. And then there's that thing called the pandemic that comes. kind of hit us in 2020 earlier. And so that slowed things down substantially. Good for us, we had, if you want to call it and label it, was the point guard 2.0 was in or close to being in design freeze.

So we were able to put a point in the sand and say, okay, this is where we're at. But as most companies had to do, we had to make tough decisions and let some folks off, go off and put a freeze on the program. We just around that same time, we were awarded a non-examination. non-deluded grant from the state of Colorado took advantage of some other programs as well, but that non-delutive funding actually kept us alive and whole throughout the pandemic. We had some of our inside investors that came in to match that non-deluded funding as well. So he kept it very tight towards the final goal of getting 2.0 to a complete design freeze and such.

And we didn't think that the pandemic would last about three and a half year, which is pretty much what it lasted for us. And I know it's different for a lot of others, but survival proceeds prosperity, and we were determined to survive. And so we did do that throughout the pandemic. So just around last year, August, 2023, we were working to get additional capital and under what we call our series B1. So we raised new money of $3 million. We converted various notes that we were acquiring over the pandemic period. And then we basically put the 2.0 into manufacturing. We started that process so that we can get it towards a feasibility study for inhuman.

And that's essentially where the company's at right now. On top of that, though, we're raising a series B2, which is very close to closing that will take us into our feasibility study and TSA up for our pivotal trial with FDA. Yeah, super helpful overview. And yeah, you're dead on, right? I couldn't agree more. The name of the game in startups says survive in advance, right? Survive the current chapter to advance to the next one, right? Or the next rule.

I totally understand what you're what you're getting at there. And for those listening, if you've never done a startup or maybe you're early in your venture, things are bound to get messy and things are bound to get dirty. There's rarely a startup that sails through to an M&A or some sort of liquidity event that's clean or smooth sailing. It's always a bit choppy, a bit bumpy. With that said, I'd love to go back in time and learn to cover some different cross-functional topics over the next maybe 30 minutes or 20, 30 minutes or so.

But the first one I want to tackle is your commercial background, right? You touched on it at the very outset of this discussion that grew up carrying the bag, right, in various sales and sales management capacity. How do you think that's impacted your role at running transverse, right, throughout the past 10 plus years? Has it been largely beneficial? Has there been a lot to learn? Touch on that briefly, if you can. In my opinion, I'm a little biased, but I think the sales guys or gals, whoever they may be, make the best early stage CEOs, only because when you carry the bag, you fully appreciate what it takes to get from, you know, the beginning of a sale all the way through to a yes. And in that course of that time,

and the measure you pour 99% of time you hear no. And I think what it does is it ingrains into you and deep into your soul the ability to persevere through the hard times, right? And know that, hey, listen, I believe in something. And I know that I've worked the system. I can get this to a point where it will be successful. And so I think that when you've carried the bag, you certainly can appreciate that. And it's not to say that other, jobs and responsibilities in MedTech aren't hard, but carry the bag truly is, in my opinion, probably the most difficult position of any company. And so I think that's really what it did to characterize my ability to step in and be able to come in and be a CEO. And I believe it will

eventually lead to my success as well for a potential exit with the company as well. Yeah, it's interesting 15 plus years ago when I was younger in my MedTech career and I surveyed the startup landscape, it was pretty common to see commercial folks, whether sales or marketing, be leading startups. I always wanted that, right? It's not usually, it's less common to have a technical kind of CEO stimulant still raising a series A or a series B, et cetera. And I always thought, that's interesting, right?

You think it may be maybe the opposite, where you'd have a lot of technical CEOs, and I get it now. I think a lot of the job of a startup CEO is grinding away, persisting through the nose to get through the next milestone. through the next hurdle, raise additional capital, et cetera. Obviously, you've got to have a fairly decent technical background, right, in order to develop a device, but I can completely relate to what you, a few of the points that you just mentioned.

I don't know if I did it's really the appreciation for the sales cycle, and those of us so to understand that there's a cycle that you have to go through, and it's no different. You can apply that sales cycle to the fundraising side of thing. So as an early stage CEO, there's many types of CEOs, and one of them is going out in fundraising, right? But a lot of times as an early stage CEO, you're put in a position where not only are you fundraising, but you're also running a process to develop a product, right?

You're leading the team and helping that aspect of it. Maybe you have early on shareholders or investors. Now you have to manage that. Now you have public relations there. All of those tie back to that sales cycle and running that process and at different stages, being able to address people's concerns and in grights for that matter, right? A lot of them. Yeah, and there's always just with most commercial folks, there's always this app.

to be as close to the customer as possible, right? And I remember even when I first went in-house at Caveting at the time, there's always a, not always, I just say most of the time, there's always a pretty clear difference between the engineers, right, that spent a lot of time close to the customer in the field versus those that were in the lab all the time. And from my perspective, the ones that spent a fair amount of time, close to docs, close to clinicians in whatever capacity,

they were always just that much better, right? They just got it. They understood the nuance. that physicians or other folks work through on the front lines with using your device. Totally get it. I want to shoot gears a little bit and go back 10 plus years ago

when you were first taking the concept or the idea from it, was it Dr. Lees, you said? I believe. Bradley's using a good mission. A met a device colleague, right? Okay, got it. Got it.

Not a doctor. He'd love to if you called him a doctor. We'll throw him a bone and call him a doctor for kicks. But when you're working on this idea, a concept that's basically a napkin sort of sketch, if you will, And then thinking about where point guard 2.0 is right now, there's probably a kind of iteration, right, along the way.

So when you think about that journey over a decade plus, right, of iterating on a bias, kind of getting through various versions of it, are there a few things that kind of come to mind in terms of what you've learned or what's been most impactful along that period? And maybe frame that up for as if you're coaching up another commercial met tech guy that wants to do a startup and as the opportunity to learn from your experiences. Sure, absolutely. And actually, I'm actually disjointed board and helped co-found another company's secure closure. So I'm having the opportunity to work with another CEO and inventor to be able to carry forward the acute looks and downs I've learned over the course of transverse and carry that forward and maybe shortened that gap of getting to a point of success. So but back to that question, it's not to sound cliche. The evil of good is great, right? And I think that's probably one of the biggest things. that you have to consider in the early days of developing a product. There's a tendency when you're an inventor, and I'm part, I'm a co-ventor on the technology as well, is that when you get involved, you want to do just a little bit more to make it a little bit better, but realizing that it's probably good enough to go forward as is. That's a hard arc though, I think in general, and even for the engineers that are involved

as to how far is good enough going to be. And you'll never know until you put it inhuman. And so it goes back what I mentioned before is that we thought we had really good good solution or with the first generation device. We were, we tested it in the flow models and the simulation that we had, but then we quickly realized after getting in a human that some of the simulation and some of the testing models that we were using were not exactly the same replication as that of what we were going to experience in human. And we even put it in, I think it was a total of 26 animals, right? So we did a lot of work to get to that point. So I think it's getting to

a point and understanding that and appreciate that get it in, tested as fast as you can, and all the different types of models, but you just won't know what you have until you put it into human, right? And then if you can get there quick and fast, then you can start that process again. Because at the end of the day, time is money, right? And if you don't have spending properly, you're going to kind of run out of time, quick, right? And then it starts all over again, right? If you're able to salvage whatever you have. Yeah, no doubt. And the other thing, the other kind of the other, I guess, nuance to that, that answer is, is the fundraising side, right? Like that you just mentioned is that's such a key inflection point for any startup to get into patients. So even though maybe

FDA doesn't necessarily require that in advance of a pivotal trial or something like that, not only are you undoubtedly going to have learned a lot of your device, but it's such a crucial clutching point. I remember in pitching for Fast Wade, I'm not going to mention his name, but he's a pretty legendary DC in the space. And we had a potential path forward to go right into a pivotal with our device. And we were chatting to that. He just don't underappreciate that. unknown or unexpected learnings, right, that you're going to get from doing a feasibility or first in human study. And I think, I think that's spot on advice. Hey there, it's Scott. And thanks for listening in so far. The rest of this conversation is only

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