Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Raise Capital for Your Medical Device Start-Up: Interview with Giovanni Lauricella and Aaron Green

Episode Date: August 16, 2021

In this episode of Medsider Radio, we caught up with Giovanni Lauricella and Aaron Green to discuss all things related to fundraising for early-stage medical device start-ups. In this interview, we learn about the ins and outs of raising medtech capital, what investors want to see in a medical device start-up, and best practices for pitching potential partners. But first, here’s a bit more about their backgrounds:Giovanni Lauricella holds a Bachelor’s in Finance, a Master’s in Regulatory Affairs in Medical Devices, Biologics, and Pharmaceuticals, a Harvard University Certificate for Advanced Negotiation Strategy, and a Università Bocconi Certificate for Private Equity and Venture Capital. He has more than a decade of experience partnering with startups, SMEs, boards of directors, and investors on structuring technical and commercial teams from the C-level to individual contributors. Giovanni and his team have hired more than 7,000 employees for over 500 startups in more than 40 countries and assisted in facilitating capital raises for startups that amount to more than $150 million.Aaron Green has a Ph.D. in computational chemistry from UCLA. In 2014, he became the first hire at Neural Analytics (now NovaSignal) where he held leadership roles spanning clinical, finance, sales, and marketing. Aaron currently runs U.S. operations for Labgnostic, a global interoperability platform for clinical laboratories. He co-founded MedTech Money with Giovanni Lauricella in 2020 and founded ExtractEx, a botanical extraction startup, in 2021. Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and healthtech leaders, and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content. Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, Premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world’s most successful medtech founders and executives. Since making the premium memberships available, I’ve been pleasantly surprised at how many people have signed up. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's the link to the full interview with Giovanni and Aaron if you'd rather read it instead.

So it's not enough to only identify the right investor. You also have to identify the right investor at the right time. And so a few points that we've learned and that were made salient on our clubhouse discussions are there is no silver bullet because it's not, like I said, it's not enough to just identify the right investor. You have to find them at the right time. You also, when you do this outreach and this is where getting away from those lists of a thousand investors, taking your. copy and paste email and sending it a thousand different times and hoping for the best. You know, it's like gambling and, you know, throwing it on red or black at a casino. You might get something back, but it would be luck and happenstance.

These investors want to know that when you reach out, that you've done your homework. And there's a reason for why you're reaching out. You know their investment philosophy. You know that they invest in that style of technology. because reaching out to an investor who only invest in growth state capital and you're looking for a $10 million series A, it's very clear that you haven't understood what their philosophy is or looked at their portfolio of investment or the size of the investments that they have made. Welcome to MedSider Radio, where you can learn from proven med tech and healthcare thought leaders through uncut and unedited interviews. Now, here's your host, Scott Nelson.

there, Scott. In this episode of Medsider Radio, we caught up with Giovanni, Loricella, and Aaron Green to discuss all things related to fundraising for early stage medical device startups. In this interview, we learn about the ends and outs of raising MedTech Capital, what investors want to see in a medical device startup and best practices for pitching potential partners, among other things. But first, here's a bit more about their backgrounds. Giovanni Loricella holds a bachelor's in finance and masters in regulatory affairs and medical devices, biologics, and pharmaceuticals, a Harvard University Certificate for Advanced Negotiation Strategy, and a Universa Tabuchani, I'm not sure if I'm pronouncing that correct, certificate for

private equity and venture capital. He has more than a decade of experience partnering with startups, SMEs, boards of directors and investors on structuring technical and commercial teams from the sea level to individual contributors. Giovanni and his team have hired more than 7,000 employees for over 500 startups in more than 40 countries and assisted in facilitating capital raises for startups that amount to more than $150 million. All right. On the other side of the table is Aaron Green, who has a PhD in computational chemistry from UCLA. In 2014, he became the first hire at Neural Analytics, which is now Nova Signal, where he held leadership roles spanning

clinical, finance, sales, and marketing. Erin currently runs U.S. operations for Lab Gnostic, a global intrapper ability to be. platform for clinical laboratories. He co-founded MedTech Money with Giovanni in 2020 and also founded Extract X, a botanical extraction startup in 2021. Okay, so before we jump into the discussion, I want to mention a few things. First, since you're listening to Medsider, you're probably aware of how expensive it is to run clinical trials. Anyone who spent time in the MedTech space knows that you typically need to commit hundreds of thousands of dollars, oftentimes millions, towards clinical research. But it doesn't have to be that way. And here's why.

ProofPilot is a new kind of hybrid clinical trial platform that enables you to run decentralized studies at cost that are 40 to 80% below traditional approaches. This is how they do it. First, you can easily design a trial and the ProofPilot Visual Protocol Designer using their extensive library of templates. Next, you can launch those trials to participants and virtual staff without any technical development. Skip the integration of disconnected providers because ProofPilot pulls it all together seamlessly. For example, you can recruit, consent, and retained participants, then schedule, remind, and collect data, often with minimal manual labor, manage site data in real time, query adverse events quickly, and review data in preliminary

analysis within hours, all in one compliant platform. Get up and running quickly with an annual license fee and launch as many trials as you like with an unlimited number of participants. To get started, visit medsiderradio.com forward slash proofpilot. Again, that's medsiderradiot.com forward slash proofpilot. For the Medsider audience, with an annual contract, ProofPilot will provide IRB approval for your first study at no cost. Some exclusions apply, so visit Medsiderradio.com forward slash proofpilot to learn more. Okay, second, if you're into learning from proven med tech leaders and want to know when the new content and interviews go live, head over to medsider.com and sign up for our free newsletter.

You'll get access to gated articles and lots of other interesting healthcare content. If you want even more inside info from MedTech experts, think about a MedSider premium membership. We talked to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a MedTech startup for an exit. In addition to the entire back catalog of MedSider interviews over the past decade, premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world's most. successful MedTech founders and executives. Since making the premium memberships available, I've been pleasantly surprised at how many people have signed up. So if you're interested, go to medsider.com to learn more. All right, without further ado, let's get to the interview.

All right, Giovanni, Aaron, welcome to Medsider Radio. Appreciate you coming on this morning. Thank you for having us. Thank you. Thank you. Yeah, I'm not looking forward to this conversation. It's going to be like we chatted about kind of in the old green room before I hit the record button, almost a bit of a highlight, right, of the MedTech Money shows that you've been doing on Clubhouse over the past few months, which will certainly provide more information for the MedSiter listeners about your program. But without further, before we go to you do, I should say, I provided a bio, a rough, you know, high-level bio for both of you guys at the outside of this interview, but would love for you guys to add a little bit of color in terms of your background.

So Giovanni or Aaron, I'm not sure who wants to go first year, but can you provide a little bit more information about kind of your background? Yeah, I'll go first. Yeah, so my background, computational chemistry, PhD was going the academic route, decided that wasn't for me. So I was doing a postdoc at UCLA and had been, you know, gung-ho on becoming a professor, got into a lab where there were 40 postdocs, and my postdoc I was working under at the time, had like 40 publications and was still

having a tough time finding a job. So I thought, you know, it's not the next seven years. This isn't exactly what I want to be doing. So I took where I was basically a glorified chef and accountant and translated that over to a startup, which is what I really wanted to do. The startup was called neural analytics at the time. I was the first hire there. It's an LA-based startup working in digital autonomous robotics for ultrasound.

So as the first tire there, I was kind of the spearhead for a lot of strategic initiatives started off in clinical partnerships and then moved on to closing out the Series A and Series B rounds. Well, actually, I closed out the seed to Series A bridge and then Series A to B left over to go to International, built up the European office for a couple of years and then moved back to demarketing for the product launch of the robotic system. So I was with the company for about six, seven years. And then in 2019, broke off and started my MedTech consulting practice,

where I worked primarily with early stage startups and tech transfer and a number of accelerators. So that's me. I'll pass it off to Gio. Thanks, Aaron. So I've spent the past 10-plus years in MedTech. I work with a firm that focuses on talent, acquisition, and we work with both the startups directly as well as venture capitalists or the

investors to build out their CEOs or their change management within their investment portfolios. And on the actual startup side, which is all that we work with, MedTech startups, we build their teams from sea level down to entry level, and then very early stage R&D all the way through global commercialization. When I was brought on, the first task was to take us outside the United States and truly make us a global firm to give assets and abilities to build teams for a single company on a global scale. So we're going through a regulatory shift right now where the EU MDRs are coming into place within the next seven days now. And over the past couple of years, we've seen a dynamic shift where previous to those two years, most startups would pursue CE mark first.

And now it's being flipped where they're pursuing FDA first. But, um, We used to build companies and build long-term relationships with them here in the States, and when they would ask us to go build European teams for either a CE-Mark trial or after receiving CE-Mark, their actual field team. We wanted to be able to provide that ability and give that service to the clients that we had here in the States. And then through compounding networking, we ended up starting having European clients and Israeli clients and Chinese clients and Australian clients.

And then it's pretty much a running joke that the only place that we haven't made. made hires or built teams yet isn't an Antarctica. So that's, that's the one. So we're fully a global firm that focuses on building MedTech startup teams. We do have a large investor relationship on either doing a talent assessment for the companies that they're about to invest in or, once again, putting in their CEO and executive management. I got my master's in regulatory affairs shortly after joining the firm. and that was both, why I should say all three in pharmaceuticals, biologics, and medical devices. And I tended to focus in medical devices, given our clientele and also where my passion lies.

I truly do think I'm a med tech guy first and then whatever I do else after that come secondary. Love the med tech industry. And at this point, especially over the COVID period, I used to make an even pre-COVID, I used to make introductions between startups that were raising capital into investors, but it was incredibly passive and very few and far between. But over the past year, given the pandemic of how recruitment, if you will, or building teams was somewhat put on a standstill for March, April, and May. And fortunately came back on in June 2020, and it's been white hot ever since,

took that opportunity to pivot very strongly and then go really deep into my investor network and provide that to the startups who are raising capital. and over the past now 14 months have made well over 700 introductions and fortunately it helped raise over 75 million for about 40 different companies. So it's been a cool journey and being able to understand how and the trials and tribulations of what startups have to go through in terms of raising capital and then how that plays onto their business has been enlightening for me. And I've gone much deeper into it than I ever have been before.

So 10 years as a consultant, building MedTech startups, and now actively working with investors and startups to provide both assets on the people side as well as the money side. Got it. Thanks for that background, guys. And Aaron, I didn't realize that you were headed down the professor path. I know I know Giovanni, you're known as kind of Mr. MedTech. And Aaron, I might just call you Professor Green from now on, you know. Wouldn't be the first time.

No. Joking aside, this conversation is going to be. be all about raising, you know, money for, for MedTech startup. So with that said, and, you know, kind of based on the bio that you just provided Giovanni, tell us a little bit more about what you're doing with MedTech money, and then we'll jump right into kind of the substance of this discussion. Yeah, I'd love to start here, just the genesis of MedTech money picking up where Giovanni left off. In the early sort of phases of the pandemic, Gio and I had been in touch on LinkedIn. I knew Giovanni through his work at the Mullings Group, and we'd actually retained Joe for services in the past at my previous company.

But I'd never met Giovanni in person. He's a figure on LinkedIn that had always been in my feed, and I'd never reached out. And I had had an opportunity to notice a post that he was posting with his group on investors and leadless. And I wanted to couple that with some of the ideas that were coming out of the SaaS community, particularly like Dan Martel, and just reached out and said, hey, I think there's an opportunity here to boost these posts using or translating some of the tech approach on LinkedIn over to MedTech where it just hasn't been seen. So we started our MedTech money journey there. Yeah, it was the power of networking that I definitely have to attribute to the start of the pandemic. And so that is how Aaron and I met. And when we connected, it was a strong connection that fortunately led to where we are today and got a chance to meet him in person in L.A., which was awesome.

And then have been building concepts and websites and networking ever since. And we've been coming up with this idea of just giving, giving, giving. back to this entrepreneurial community who is raising capital. And along the way, seriously got to look underneath the hood of what does it mean to be either a very early stage entrepreneur raising capital possibly for the second or third time, but typically for the first time? And we noticed that there was this massive gap of these early stage entrepreneurs and simply not knowing what to do or where to go.

and just helping provide them insights and direction and leads that they could reach out to. And it spiraled into something that we didn't really expect. And I can say, and I believe Aaron would back me up on this one, where we've learned so much over the past year and made so many more connections, both on the entrepreneurial side as well as the investor side, that by sharing and getting called crazy over the past year for giving away information that most people pay thousands of dollars for has just given us the insight that we honestly weren't expecting. And it's taken us from being able to now provide strong counsel on

executive summaries and assembling those. And what's the best approach to reaching out to investors and how to do that? And what does your pitch deck look like? How can you optimize it? And then I would say even more importantly is saving time for entrepreneurs, not reaching out, to investors, but reaching out to the right investors. And that's really open up a lot of doors for us on getting in front of investors who then walk us through the mechanics of their theory or the philosophy of how they invest, where they are within their funds, the timing of their funds, what do they look at and why? And then creating this network of investors and categorizing them, if you will, so that when we deal with entrepreneurs, we can actually steer them in the right direction of reaching

out for the first time and having warm introductions to these investors that once again, 14 months later has proven strong in actually getting investments to the entrepreneurs who first reach out to us. So it's been really great, which has also led us to jumping on this clubhouse platform that's been highly active for more than a few months, a handful of months. I know it's been around longer than that, but what Aaron and I have done is really provide this curated once a week conversation on Clubhouse that the intention is bringing investors as well as entrepreneurs who are raising capital onto a panel and demystifying what it means

to raise capital as well as invest specifically within the MedTech industry. And we've learned a lot along the way from the watchouts, the war stories, to even more hyper-specific assets like CRMs and when to use lawyers. et cetera. So it's provided us a really great opportunity to get in front of the entrepreneurial community from both a CEO or company side as well as investors, which has not only grown our network tremendously, but taught us along the way. Got it. That's perfect. And just while we're on the topic of your clubhouse chats or your clubhouse panels, for lack of a better description, those are every Thursday at 8 a.m. Pacific,

correct? Correct. Eight at a.m. Pacific, 11 o'clock Eastern. Got it. Well, hopefully that's helpful for those listening. I'll also link or provide information on the show notes to this episode for the MedTech Money Clubhouse chats. But those are great. Highly encourage anyone who's either making investments in early stage med tech companies or trying to raise capital for your own startup to definitely check that out. And I'll just drop in real quick on that one just to give some credibility and background to that because there's three, basically there's three styles of panels that we've held so far. Our optimum blend is both entrepreneurs and investors on the panel because what we love to do is throw out an objective question and hear the responses from both an entrepreneur and an investor. And oftentimes how those dissonance and thoughts actually occur, right, where an entrepreneur will look at something and think about it one way. An investor looks at the same thing and thinks about it a different way. And it's really good to highlight so that you can close that gap if you're an entrepreneur or even an investor trying to raise capital. or invest for MedTech.

So that's the optimal one. But we also have had panels that are 100% investors, which have been great because we just get to really pepper all the investors with questions on what happens behind the scenes and what is the motivations of why investors turn down companies, move forward with companies, and what are their investors, or I should say motivations with their LPs? And a lot of those mechanics that entrepreneurs will never be aware of. So what's happening behind the scenes on the investor side? And then we've also had the third one would be 100% panels of entrepreneurs where it's just a really

great dialogue of what are the watchouts, what are some of the anecdotal stories that are great. And also, I'm glad I never have to do that again, knowing that I've already been through it. And so our audience members really get a chance to hear what life happens from an entrepreneur or an investor side when you're dealing with raising or investing capital, which if you're raising capital specifically because our target audience is, first-time entrepreneurs who just simply don't have the answers or don't know where to go, and being able to join a room to hear all this insight to at least help them move forward, and if not, even make connections along the way.

Yeah, that's helpful background. I love how you described the first type of panel is the optimum blend. It almost sounded like a supplement, right, a MedTech Money supplement, you know, the optimum blend of a panel. That's great. So with that said, we're going to spend the next 45 minutes or so talking. about really both sides of the table, right? So the investor side, as well as the kind of the startup founder side of the table. And before we dig into kind of the startup founder side of the table,

let's spend the first part of this discussion really talking about the investor, the flip side, because it's most, I mean, if you're trying to raise capital, you need to understand your audience, right? That's crucial. And so let's spend the next, you know, 20 minutes-ish or so something like that, really talking about the different types of investors, right, from angels to micro-VCs to late-stage VCs, etc. What do they want to see an idea, how to make the right connections, et cetera? And then we'll kind of dig into tips and best practices in terms of approaching those investors, you know, from the founder's side of the table and what your pitch deck should look like, types of fundraising, et cetera. So let's first start out with the different types of. active investors that a startup founders should consider.

So who does, you know, Aaron or Giovanni, do you want to cover that? Yeah, I mean, I'll just start off, you know, the typical fundraising journey for a company, they're looking super early stage at grants and university funding to get an idea or IP off the ground. That can then translate into, you know, friends and family round, then angels, angel groups, micro vCs, early stage VCs, growth VCs. So those are kind of the menu of investors you have to choose from. And really where you're at as a company depends on who you're going to be talking to. I think each investor has their own perspective and their own motivations going into their investment thesis behind your company.

I think for friends and family, it could be as simple as an impact investment where the folks understand your idea and believe in the impact that it could have, knowing that there's a high risk at an early stage. I think with angels, you're starting to see angels become more sophisticated and syndicating into groups that are doing their own due diligence. And so the, I think it's interesting. The tides are kind of changing in the industry as a whole where you start to see, particularly in like the deep tech side of Ventec, where VCs are, moving up around and less willing to take the early stage risk. And so the founders are having to rely more on those grants, friends of family, and angels. Yeah. And with that said, I had a

conversation with Derek Herrera, who I think actually you know fairly well, Aaron from his time at neuro-electics. Yeah, yeah. I love Derek. Yeah, awesome guy. Like, not only a fantastic entrepreneur, but just a great human being. But, you know, we got into this conversation about when it comes to raising money, thinking about different investors kind of in parallel, too, right? So if you're thinking about non-dilative funding, like grant funds as an example, knowing that that's going to take a few shots on goal typically, especially if it's your first go-round, that's going to take, you know, one or two, maybe three, four, five submissions maybe, depending on the complexity of the grant request.

And that's just going to take time. Maybe that's a year, maybe that's two or three years, et cetera. And so thinking about moving that, that sort of opportunity along, but also, but also thinking about friends and family, maybe some early stage angel, angel money in parallel, knowing that the grant, the grant or the non-dilative funding is going to take some time. Yeah, yeah, the grants, I mean, the grants are, they can be a double-edged sword, right? So you have the grant, which is non-dilative funding, which is great, but then also attached to that comes, you know, you've got a project that you need to deliver on. And as an early stage company, you know, it's a moving target sometimes as to what

market you're approaching and how you're going to deliver on the solution in terms of your technology. With a grant, you can sometimes get yourself stuck into a position where your project manager doesn't allow you to sort of change with the market or with the times. And so it can be a situation where you get yourself into a grant. The focus of your company has changed slightly, but the grant is very solid. And so you're stuck executing on that while you're, you're, you're you're also trying to execute on this new market dynamic and new market opportunity that's presented itself. So I think, yeah, grants are great from a non-dilative standpoint, but they come with drawbacks. There's also the administration of the grant as well, which, you know,

either need an accountant to help you with or there is the compliance burden that comes with it as well. So positives and negatives. Right, right, no doubt. And I want to do, in the future, I want to do a full episode on grant, how to actually execute a grant or what a grant submission looks like and kind of do a deep dive on that. But, you know, just for anyone that's listening, that feels like this is a bit of a scary topic, it definitely can be complex, right, both on the submission side as well as on the on the post grant kind of compliance side, as Aaron mentioned. But there are, you know, there are folks that can help you, right, whether individual consultants or even agencies.

And as an example, with Juve, we went through a grant submission process about a year ago now and worked with a company out of Minneapolis to help with that process. And it definitely was a lot of work, but they made it very, very easy. And I think I can't remember exactly how much money we threw out of it. Maybe it was like 5K or something for their support in that. But without a doubt, help streamline it. So if you're listening to this and thinking about, you know, a grant submission and think it's too big of a hill to climb, just know that there are agencies.

and consultants that can help streamline that type of effort. And Scott, and just to give you a lead on that one, if you do ever do that show regarding grant writing, you might want to reach out to, and I can certainly introduce you, but Brian McLaughlin, who's a CEO of micro leads, we had, Aaron and I had him on Clubhouse a couple weeks ago, specifically for him to talk about his grant writing.

It's such a unique case, and he has a wealth of knowledge on what it means to start a company and then run a bunch of grants, and then now finally having to raise an equity round. But the unique case of raising $25 million in non-dilutive equity or non-dilutive money, and now for the first time having to go raise an equity round after already having $25 million invested in there. And his story is fascinating. So that's Brian McLaughlin, CEO of MicroLeans.

Okay. That's great. Thanks for pointing out. And that's incredible. 25 million in non-dilutive funding. That's insane. When I talked to him on that, when I was like, listen, I got to have you on the show just to share your story as well. So he would be a strong asset for you.

Oh, yeah, that's incredible. And I mentioned Derek Herrera. He actually mentioned in that recent interview that I published that, investors almost expect that you have, expect you to pursue, you know, grant funds. Maybe, you know, maybe it's a stretch to actually receive it. But it's almost an expectation that you're thinking, at the very least thinking about it. So I just think that's a nice, that was a good tip, you know, to just understand as an early stage founder. Like, Joe, don't just sort of kind of put that, put grant opportunities to decide, right?

at least have a story to tell on why, if you're not going to pursue it, why, right? So, so anyway, that's a, that just wanted to cover that. So knowing kind of the life cycle sort of, so to speak, of early stage investors, as you, as you kind of called out, Aaron, let's talk about what they, what they typically want to see. And we don't have to break it down by maybe the type of investor, but generally speaking, what, what are your guys' tips or best practices for things that they definitely want to see in an idea from an early stage MedTech founder? I'll take this one. So it's very simple, at least for me, on the early stage stuff, it's two points and doesn't really matter which order. There has to be a market for the technology. So if you're going after a super small market and you're looking after or you're looking for investment, it's typically going to fall flat. Just because it's a passion project of the entrepreneur or founder doesn't mean it actually has legs to have an investment in there if the market's not big enough for a return. And we'll get into this later in the conversation, I'm sure. But you always have to keep in mind. the motivations of an investor and the fact, especially if they're not an evergreen fund,

and they do have to eventually return that money to the limited partners who initially invested in their fund, if that investment doesn't return, they're going to walk away. Even more so, and I don't want to say on the softer side, but probably more brilliant point that investors look at for early stage investments are the team. if they don't believe, and this is probably the major differentiator between early stage investments and late stage investments, the earlier stage you are, the more it's about the team and the belief and trust that an investor has in that early stage entrepreneurial team. If they don't believe that you are responsible or have the capabilities of getting this

over the line, they're not going to invest in you because keep in mind, the business isn't there yet. And it's to be expected that the product is likely going to be. going to change. There are going to be pivots. There is going to be time that's wasted or going off on tangents and having to re-correct the business. But if they don't believe that the team in place is the right team to grow and expand not only the company itself, but the product and the efficiency to eventually get down the line or over the line, they're not going to invest. Team is everything for early stage entrepreneurs. I don't want to say because people are obviously

the most important in any company. But as the story continues to be built, as traction continues to be gained, as risk continues to be mitigated down the life cycle of a company, you then have more of an objective business where the clinical data or the revenue start to speak for itself, where it's less dependent on the entrepreneurs and the what-ifs of the future of the company, and much more dependent on, is the clinical data speaking to the efficacy of the technology, or is the revenue there and is the market already embracing the technology enough to spit back the revenue that is going to lead to an acquisition, lead to an IPO? So later stage investment is heavily more dependent on the objective business.

And the earlier stage you go, it's much more dependent on the trust and also the belief in the early stage entrepreneurs that are going to be along for the ride. Yeah, and I just add there, it's not just the CEO that the investors are going to look at, especially in MedTech, you can expect that the investor is going to have a really hard look at your CTO as well. And then depending on the company, if you have a clinical person on the team as well, those are the three people, the CEO, the CTO, and whoever's on clinical, that are going to get, let's say, roasted in the due diligence just again and again and again. You're going to have to lean particularly on that CTO quite a bit as a CEO.

So yeah, those are those are fantastic thoughts. And I just to circle back around to your, your comment around size of market too, right? I 100% agree about about the importance of the team. But when you're thinking about size of market too and what that investor is going to expect in terms of returns, just to keep in mind if you're raising money at say, let's say you're raising a series A, right, at a just for rounding purposes, say a $10 million pre-money valuation, just know that whatever dollars that are going going into that round, that investor is going to expect, you know, 10x type of returns, you know, 10x plus type of returns or more, you know, that's sort of what's in their head. So just know in that scenario, you're going to have to set, you're going to,

I mean, your acquisition just hit $100 million in that, in that series A in that example. So just, just kind of know what you're, what you're getting into, you know, and what investors are expecting in terms of return. I think that's a, that's a good point that you called out, Giovanni. So on that note, let's jump to, let's jump to kind of the next, topic that's sort of what we're sitting on this side of the table, so to speak, which is basically how to identify the right partners and then what that outreach should look like, that outreach and maybe pitch should look like. So I'm not sure who wants to kind of tackle this, you know, Aaron or Giovanni, but this obviously fits into what you guys have been doing with MedTech

money over the past, or the past year or so. So who wants to? Yeah. I'll give it. I'll give a quick shot. This is one of the reasons we started MetTech Money. It's all about making the journey of fundraising for entrepreneurs a little bit easier. I think particularly if it's a first-time entrepreneur, even if it's an experienced entrepreneur, you have an idea of, let's say, a few investment firms that are lined up perfectly with your offering. But once you've reached out to those folks and tapped out your network, then you're in this land, of sort of unknown unknowns where how do I know who's the right person to reach out to? Oftentimes on like a VC's website, they'll be pretty high level in terms of what they invest in and what

they're looking for. But then if you dig in deeper, they've invested in opportunities similar to your company in the past. And so there may be a team member on the team that specializes in the type of company that you have that could be a good fit. So I think part of it is knowing not just the VC firm and what they say they like to do, but knowing the partners as well, I think one of the trends I've seen is sort of partners kind of becoming their own individual influencer within the VC for their specific specialty or skill set. And getting to know that takes a lot of time, takes a lot of effort. When we started MedTech Money, we had a small network of investors and VCs that we knew

going into it, but it's spent a year just doing research and networking and reaching out to folks and getting him on the clubhouse and chatting and learning their motivation. So I hope that starts to get into the question a little bit. It's, it's, you know, helping to peel back the onion by really what MedTech Money does is provide that curated information that's relevant to an entrepreneur saying, you know, you have this particular special to your field that you're working in. You've got this offering or round size at this stage that you're going after. here's like the top 50 VCs that you should be reaching out to.

And that turns a search from, you know, a Google search where you can pull up a thousand names. You don't know if they're the right ones down to, okay, here's a list now that I can reach out to and have a much better chance of getting positive response. So just to recap, that was basically the no kind of the markets or verticals that that VC invest in, right? whether it's cardiovascular or orthopedics, maybe it's biotech, maybe it's, you know, digital health, whatever. So understand that. And then understand the people with the goal identifying kind of your deal champion, right, internally.

Am I kind of summarizing that? Yeah, I think that's a good summary. And on that note, I know, I know, and I'm not sure if you guys are still providing this through kind of the med tech money platform, but you guys have curated like a incredible database. I remember a LinkedIn post, gosh, I don't know, six months ago that has like one of thousands, thousands of comments around people wanting access to this list of investors. Is that something that you guys are still offering? Or how do people go about, you know, getting access to that vetted list? That was a huge learning lesson for us as well.

And it tailored, I guess, why we're even on this show right now talking about it. And so what we wanted to compile was a list of investors that had a focus, or at least at a minimum, has done a deal within MedTech so that MedTech entrepreneurs raising money, at least who knew or who knew who would be in the game of at least looking at their technology. And that's why that list continue to grow and get exponentially longer. And then anecdotally, from both Aaron and my side, when we have heard feedback months and months later from some of these investors, they're like, listen, those long lists were great. It's great that you compile them, but there's no way that I can work through a list of 1,800 or 2,500 or 4,000 or even 1,000. How do I reach out? And that was, at least for me, a major

aha over the past year, as to how to go about that. And I have a few experiences that I'd like to share for anyone who's listening and raising capital. So it's not enough to even identify the right investor. It's certainly hard enough to identify the right investor. But then you have to take a then next step further, which is the timing. And you have to be aware of where those investors are within the life cycle of their fund. And great example. I just had an investor who's actually a close friend of mine reach out probably about a week or a few days ago, giving me a total update. on the fund that they're running with right now. And I have steered a lot of startups his way.

And he said, you know, thanks for steering these towards us. But I wanted to give you an update on our fund. We likely have only one or two more spots left for new investments. And we are starting to close out the fund because we need reserves for already the investments that we made. And we're going to start raising the next fund. But I wanted you to be aware for any other startups that you send our way, that even though if there's an attractive opportunity for us to invest in,

we might not be able to do that. So it's not enough to only identify the right investor. You also have to identify the right investor at the right time. And so a few points that we've learned and that were made salient on our clubhouse discussions are there is no silver bullet because it's not, like I said, it's not enough to just identify the right investor. You have to find them at the right time. You also, when you do this outreach, and this is where getting away from those lists of a thousand investors, taking your copy and paste email and sending it a thousand different times and hoping for the best, you know, it's like gambling and, you know, throwing it on red or black at a casino. You might get something back, but it would be luck and happenstance.

These investors want to know that when you reach out, that you've done your homework and there's a reason for why you're reaching out. You know their investment philosophy. You know that they invest in that style of technology. because reaching out to an investor who only invest in growth state capital and you're looking for a $10 million series A, it's very clear that you haven't understood what their philosophy is or looked at their portfolio of investments or the size of the investments that they have made. And so when you're looking at potential investors, a huge key component is what's the size of the fund that they closed? If they have a $500 million fund, they're not going to typically participate.

in a series A where they're going to contribute $2 million. It's not valuable enough for the investor to contribute that because they're not going to get the return on that money or even the time that it takes. It's just going to be too much work. So typically when you see those larger funds, they invest in larger rounds. And the smaller the fund, the smaller the round that they typically invest in. So that's another good metric to look at. But then it gets even more confusing because in our time of interviewing investors,

and understanding their thesis and their philosophy of how they invest, there's always these exceptions, which then makes it even more frustrating. I was on the phone a week or so ago with another investor that typically invests in right before regulatory approval or very early stage commercialization of a product. And when you go through their portfolio, it makes sense as to that and their portfolio speaks to that philosophy. But then they say, well, if you come across a company that looks like this, this and this, and it might be earlier, don't be hesitant to send them our way because we do have this one company that even though we are really more of a regulatory approved and commercial stage company, we have made an investment in a company that was going

into first demand and didn't even have clinical data yet. And so they have these general philosophies, but I typically, more often than not conclude a conversation with an investor saying, we want to look at everything. We want to take a look at everything. But there is this strong, backbone to what they typically invest in, which once again makes it confusing. So it leads to the final point that I wanted to make that I learned and wanted to ask a lot more questions about to our panelists on Clubhouse, that how do you manage relationships with the right investors? So if you go out and you're a medical device company and you find, you know, the top 50 firms that you should be in contact with, some of them might be a little bit later stage than where you currently

are right now, but how do you appropriately reach out to them and then knowing that they're not going to invest in you now, make sure that you constantly stay on their radar, constantly update them once a quarter or once every other month. And we've had investors on our panel say, we want that. Just because we can invest today doesn't mean we don't want to know what's happening. We want over communication so that we can keep you in our thoughts, in our mind, in our pipeline. So there's a way of methodically knowing who you should be reaching out to, who you shouldn't be reaching out to. But then at the same time, knowing that there is no silver bullet, and it's all about timing and also how you manage the relationship moving forward to stay in contact and update the investors who may invest in you in the future. Hey there, it's Scott. And thanks for listening in so far.

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