Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Win with Contract Manufacturers: Interview with Travis Sessions, CEO of Biomerics

Episode Date: August 20, 2020

On this episode of Medsider Radio, our guest is Travis Sessions, the Founder and Chief Executive Officer of Biomerics, a leading mid-market interventional device contract manufacturer. He's also a Managing Partner of Med Venture Holdings, a unique medtech growth equity investor. With over 20 years of business management experience, Travis has successfully built and grown multiple medical device technology companies during his career. He got his start professionally at Dow Chemical and has held management positions at Microsoft and Parker Hannifin Corporation. Travis has a B.S. in Chemical Engineering from Brigham Young University and a Master’s in Business Administration from the University of Michigan. Interview Highlights with Travis Sessions:Macro trends within the medtech market, including Travis’ thoughts on the future.Key differences between contract manufacturers (CMs) and large original equipment manufacturers (OEMs).Critical things that OEMs should look for when identifying and working with CMs.The origin story of Med Venture Holdings.What Travis looks for when vetting early-stage medtech ideas.Critical functions that need to be in place for a medical device startup to be acquired.Travis’ favorite book, the mentor he most admires, and the advice he’d give to his 30-year-old self.Learn more...

If you create a product that works clinically, eventually that value rises to the top. The second biggest thing, of course, is the commercial viability of the opportunity. And there's a lot that goes into that pricing, reimbursement channel. And you really have to think through all of those in advance. Typically how deals are valued is there'll be a model that's generated by the acquirer that realizes his channel power and if he were to acquire this and move it into their organization, what kind of scale could occur. And so that's what they're looking for is there are enough commercial information to show

that I can look at what you've done with it. Now, if I took it, where it would go. And, you know, that would be the common model for, you know, improvements on products. Now, if you have a new solution to a really important problem, then, you know, then, of course, that's a real business to be built. Welcome to MedSider Radio, where you can learn from proven MedTech and Healthcare Thought Leaders through uncut and unedited interviews.

Now, here's your host, Scott Nelson. Travis Sessions is the founder and chief executive officer of Biomerics, a leading mid-market interventional device contract manufacturer, as well as MedVenture Holdings, a unique MedTech growth equity investor, with over 20 years of business management experience, Travis has successfully built and grown multiple medical device technology companies during his career. He got to start professionally at Dow Chemical and has held management positions at Microsoft and Parker Haniff

Corporation. Travis has a BS in chemical engineering from Brigham Young University and a master's in business administration from the University of Michigan. In this interview with Travis, here are a few of the topics we discussed. Macro trends within the med tech market, including Travis's thoughts on the future, key differences between contract manufacturers or CMs, and large OEMs, how quality contract manufacturers can best support OEMs, critical things that OEMs should look for when identifying working with CEMs, sorry for the multiple acronyms here, the origin story of MedVenture Holdings, what Travis looks for when vetting early stage med tech ideas,

critical functions that need to be in place for a medical device startup to be acquired, and Travis's favorite business book, the mentor he most admires, and the advice he'd give to his 30-year-old self. There's a lot more we cover in this wide-ranging discussion, but I wanted to call out a few things before we get started. First, if you're new to these Medsider interviews and want to be updated when the next one goes live, head on over to medsider.com and enter your email address. Rest assured, you won't be spammed. In fact, the only time you'll hear from us is when a new conversation goes live. Again, it's super simple.

Just visit Medsider.com. And right there on the homepage, you'll see the opportunity to enter your email address. Second, if you continue to enjoy these interviews, please give us a rating. And your podcast app, just open the reviews tab and click on the old five stars. Thanks again, it really helps us out. All right, without further ado, let's get you the interview. All right, Travis, welcome to MedSiter. Appreciate you coming on.

Yeah, my pleasure. Thank you. Yeah, really looking forward to the conversation because, as I mentioned in the intro, you're kind of dabbling in two really interesting areas, you know, running a pretty large, you know, contract manufacturer in biomerics, but also investing in a lot of early stage med tech products through your private equity company Medventure Holdings. So hoping we have the opportunity to kind of go deep on, or at least go into both of those kind of two areas for the people listening. I think they'll be able to glean

some really interesting insights. So with that said, let's maybe start out the conversation with talking a little bit more about med tech trends that you're seeing from both of those perspectives, right? It's leading a successful contract manufacturer, but also, you know, having some really nice wins when it comes to Med Venture Holdings. So we're recording this, you know, in kind of the, in Q2 of 2020. So, you know, what's your general take on MedTech in terms of growth and where companies maybe are taking advantage of growth opportunities and maybe where they're not? First of all, it's still a very attractive market.

MedTech is one of the areas in the economy that has grown consistently for the last 10 years and is still outperforming in general, the larger economy. I started Biomerics 10 years ago. and when I started the company, Med Device was about a $400 billion industry, and contract manufacturing within that marketplace was about $30 billion of it. Well, advanced forward 10 years, the market's now about a $500 billion market, and contract manufacturing is an exceeding about $120 billion. So it has grown much faster than the larger market as Med Device companies of, outsourced what they would consider in the past core manufacturing technologies.

And I think it says a lot about how the industry's changed where, you know, the large device companies are much more focused on the clinical outcomes, on the sales process, on the regulatory side of it. And other aspects of the business just don't require the same level of attention as it used to. So contract manufacturing is an area where they can leverage, you know, the larger supply chain to do that type of work so they can focus on the areas that are really driving more value for them. So when it comes to kind of that growth and that continued growth that you envision, I mean, are there a few kind of underlying, you know, things that you believe are sort of the impetus for that?

You know, the way I look at it is if a market's growing more than double digit, there's something driving that. That's outside of normal conditions. And there's a lot of hotspots, right, where there is double digit growth occurring. and in most cases they're driven by the big killers in life, right? Heart disease, diabetes, the big trends that need to be solved. And, you know, what we try to do both on the biomaric side as well as Medventure is identify those and get involved where the pie's growing to become large. And, you know, there's nothing new about the strategy.

So there's a few big trends out there. One of the more recent ones that's been interesting is the trend to go to single use endoscopes in that very large market. It's about a $30 billion market. And it's being driven primarily for availability, for infection control, from patient to patient. And so that's an example of where we identify that there's a big growth opportunity. And then let's take our technologies and go after that. We've had a strategy to focus on select markets where we think those trends are happening. And our target markets are interventional GI. It's interventional radiology, structural heart and electrophysiology, neurovascular markets, and then the general vascular access

market. And, you know, those are markets that are driven by IP. They're driven by clinical need. And as, you know, a mid-sized contract manufacturer, it's an area where we can provide real value to to our customer base. Yeah, I mean, it's refreshing to hear you say that you're still very bullish on MedTech because sometimes it's easy to get lost in, you know, the challenging, you know, environment, you know, that that's even MedTech, most startup MedTech companies face in raising money and the sheer amount of capital that you typically have to throw at a, you know, a startup to get it even remotely close to the finish line, et cetera.

So it's cool to hear that, like, you've been in the game a while now, almost on both sides at the table, so to speak, or at least two different sides of table and to hear that you're still you know you're still very positive in terms of you know historical med tech growth but also looking you know trying to look into the future and and you still envision you know a lot of a lot of upside to med tech so that's that's cool to hear so on that and that end let's talk a little bit more about biomerics and really really more about contract manufacturing because like you said you've you've been in the business for you started biomerics about 10 years ago and have seen you know really phenomenal growth rates and then maybe

after we talk a little bit about contract manufacturing, we can kind of get into your experiences with MedVenture Holdings and you're kind of seeing things through the lens of a MedTech startup. But when it comes to contract manufacturing, you know, are there a couple things that really set a good quality CM or contract manufacturer apart from the larger OEM players? Well, for sure. The market is segmented and, you know, I like to think of it this way.

There are contract manufacturers that are specialized in, one area of technology. And these are usually the mom and pop smaller shops that have either unique technology that differentiates them or a development process that's unique. You then have the very large players that are really about contract manufacturing for scale, a lot of hospital supplies. It may be overseas manufacturing with low-cost country. And then there's this middle section that I like to identify as the interventional space.

This is where you are making products that are differentiated, that are complex, and require a full service of both capabilities of manufacturing technologies to be able to get a product effectively launched and then scaled. And that's where BioMerics is focused, is we want to be the leading mid-market contract manufacturer in this interventional space. and to be there, there's a few kind of must-have. The first one is quality. And we talked about MedTech, and it's not for the faint of heart. There is a big regulatory aspect to that. And if you don't embrace it and don't do it right, frankly, you just can't play in the marketplace. You shouldn't be there.

So that's a big one. The next area is scale of manufacturing. You need to have enough scale to be able to be able to. to take on what the typical med device manufacturer needs. And that's going to involve a number of different technologies. If you look at the marketplace in general, there tends to be a series of plastic technologies, extrusion, molding, and materials. There tends to be a segment of metal-based technologies that are needed, hypo-tube wire, laser processing, coding, those type of things. And our strategy has been to look at that marketplace, identify the key aspects of the

technology needed to be valuable to our customers and make sure we get that all under one roof while still been able to be nimble and reactive to meet their needs. And it's not easy, but it is clear what the market wants. And we try to focus in on delivering that for our customers. Got it. So is this, do you think this is a fair summary that, like, if I'm, if I'm at a, you know, a big brand or a big OEM, like a Metronic or a Boston Scientific, one of the large multinational strategics, and I'm looking for to identify an OEM to work with, specialty kind of stands out. Like, do they have this, the specialty, the domain sort of expertise? You know, you mentioned interventional as an example. Do they have that type of expertise? Do they have the

ability to demonstrate, you know, a commitment to quality? Because if, to your point, Travis, you, you know, that can't be ignored, you know, that sort of entry, entry into the game. And then third, do they have like the internal kind of technology to create, you know, the products that you really truly need and maybe number three and number one are kind of one and the same. But is that a fair summary? Yeah, I think that's on everybody's checklist. They also need to have, you know, enough scale to take on the risk of what the project

requires. And, you know, these large companies have their approve vendor list. They take a look at that. They're always trying to consolidate it. But at the same time, they want innovation and they want real capability. And it's that combination that you just listed that is the checklist. And if you do that right, the pie is growing so quickly that there's more business than a lot of us can even handle as we look at the growth in the marketplace. And when it comes to scale, we talked a little bit about this before.

I hit the record button on this conversation. but you have facilities in Utah, Texas, New York, correct? Am I missing another location? We have also Indiana, Costa Rica, and then we have two locations in the Twin City areas. Okay, okay. So you're across the U.S. How important do you think that is moving forward for MedTech, this concept of sort of regionalization in manufacturing?

I know you're manufacturing just in the U.S., but do you think that is kind of a trend that, MedTech will see moving forward where products are, you know, if you're commercializing in Europe, you need to manufacture in Europe. If you're commercializing in the U.S., you need any manufacture in the U.S., etc. The trend is definitely coming back that direction. We've seen it across the board. I think a lot of that's just driven by the politics and some of the things that are going on in the world. What we've identified is that where devices are designed and products are managed and engineered, you need to be there. And you need to be there to be able to

provide the level of service that's needed. And so as we've looked at where do we go geographically, we've wanted to make sure we're in those hotspots where med device is strong. You know, the Boston area is Minnesota, Salt Lake, Northern California, Southern California. And by being in those design centers, then you can determine where's the best place to manufacture. So we, you know, we determined it was time to go to Costa Rica for scale of lower cost manufacturing as just part of that larger strategy. And effectively, what happens and what I expect will continue to happen is we're in those geographies where we can engineer, but then when needed, we can follow source to a lower

cost country with our customers as they want, as the product scale and mature. Got it. And do you envision, and you mentioned Costa Rica as an area for low cost manufacturing, that's certainly been, I mean, I think that that ecosystem has kind of been, it's been nice to see that built up, you know, over the past, gosh, you know, five to ten years. Do you see, I know, historically, most med tech companies have tended to avoid manufacturing in Asia, really anywhere in Asia, you know, Shenzhen, Taiwan, you know, Singapore, Malaysia area. Do you see that changing? Do you see that maybe opening a bit, a bit, you know, and I know with, you know, there's a lot of, you know, because of the current

economic climates. A lot of companies, especially consumer electronic companies, are pulling out of Shenzhen into other areas of Asia. But do you see that activity kind of picking up for kind of more mainstream MedTech? The thing that's driving it is those economies are becoming meaningful economies, right? Where health care is needed. And our strategies, we've gone to Asia is not then to follow low-cost manufacturing, but to get access to new markets. And so, yes, there is a an absolute need for production in those areas to serve products for those geographies. And that's, I think, the right way to look at it. There'll always be a need to, you know, have a better lower cost manufacturing.

The markets that we've elected to play, and that's not the number one driver. You know, it really is around innovation and IP, quality, and security. And when you take the combination of those needs, you find that, manufacturing a long ways away for low cost is just not the priority of that customer. And so we think we've targeted the right markets with what our strengths are. And, you know, we do see the next step for bio-Americans is to become a more international company and have strategies to do that, of course. Got it.

So I love that thought of, because I think most people, when they think about manufacturing in Asia, but cost comes to mind, right? Like that would be the primary driver, you know, to follow that path. But what you're saying is don't, it shouldn't be. It should be really, you should be thinking about if you're, if you're considering manufacturing in Asia, it should really be about market access and maybe some other things. Like you said, IP, et cetera, and not really, you know, the opportunity to manufacture in a low-cost way. Yeah, agreed completely.

And, you know, the customers that were following to those geographies, they're picking us to go there with them because of the trust and the quality and the other things they need. And oh, by the way, let's go, you know, do this right in that geography as well. And so we think it's just a much less risky way to grow. And, you know, it just makes a better sense for the customer as well as for biomarics. Makes sense. Anything, before we kind of transition and discuss, you know, Med Venture holdings in a little bit more detail, because I think that's a super interesting play.

And I'm curious to learn a little bit more about the history there. Is there anything else that you think that that's worthy of chatting about when it comes to contract manufacture? I just want to really make sure that, like, you know, the audience that listens to this podcast, these podcasts, these discussions are, you know, they're pure play med tech folks, you know, and I want to make sure that they glean enough about, you know, contract manufacturing to walk away to maybe make a little bit more informed decision or have a little bit more knowledge. So do you think there's anything else that you want to kind of cover? when it comes to, you know, contract manufacturing and things to look out for before we kind of move on? Yeah, I think we already covered the general things of quality and supply and manufacturing. And I think the piece that is also critical is that a good contract manufacturer still retains design development services, meaning they have the ability to engineer new products within their core competency.

And you see it all the time. You know, a company gets consolidated. They grow. and the secret sauce that made them, you know, grow in the first place sometimes can be lost. And I see that happen where a contract manufacturer, you know, maybe gets too focused in on just production and they lose track of the innovation and the growth and what, you know, it drives a number of these markets. And so that right balance is a tough one to get. But if you can keep the technology and the cutting edge balanced with real management,

manufacturing, you know, you got something, something magical. Got that's a really good point. And one, I guess it made me think one other follow-up question. With Biomerics, how involved are you with the regulatory aspect when it comes to manufacturing these devices? Because as you know, that's so crucial, you know, to getting, to getting products, sort of to, for product to become commercially ready. So do you guys take a pretty active role in that, or is that managed sort of separately outside of Biomerics? And what are you, I guess, what are your general thoughts on that topic? Well, first let's cover regulatory at a high level.

This is a regulated market, and I always tell everybody, embrace it for all the right reasons, and you'll get the benefit of it. What does that mean for a really good contract manufacturer? It means 10% of your employee base is involved in quality and regulatory activities. It's that big of a part of the company. And as we look at acquisitions and look at other companies, that's kind of the magical number. that the quality and regulatory team is 10% of the company, then I know they're doing it right. If it's less than that, there's probably risk there that does not be mitigated correctly.

And if it's more than that, then maybe they're not as efficient as they should be. It's just a general rule. When it comes to the regulatory side of clinical interaction, it really depends on the company. generally speaking, our customers want to manage that piece, but they'll want us to be involved, usually up through animal trials, and a lot of times we're actually preparing, you know, regulatory submissions on behalf of our customers, but it's important that they have that clinical side of the regulatory within their company and that they're good at it and that there's a good interaction. We, a few years ago, actually developed a regulatory agreement that

goes with all of our supply agreements. And what the agreement does is it identifies all the regulatory requirements and then clearly calls out what our responsibility is and what their responsibility is to ensure that it gets covered effectively. And that's a good way to manage it. And, you know, we have a whole department, of course, that focuses in on those items. Got it. That's good to know. It's interesting that you call out the 10% number, that if another contract manufacturer isn't at least allocating, you know, 10% of their employees, to quality and reg. That's a, that's a kind of a red flag to you. So good, good insight to pull from. So with that said, Travis, should we transition to Med Venture Holdings? You, you okay with that?

Yeah, sounds great. Cool. So this is super interesting. It's one of the things that I've, you know, since we maybe first met, gosh, four or five years ago that I was, I was really intrigued with is this aspect of your, your business. So maybe first tell us a little bit more about like what MedVenture Holdings is and give us maybe a little bit. bit of the history and then we'll kind of, you know, transition into kind of what you've seen and what you've experienced in working in partnership with some of these OEMs through your, through your relationship with Med Ventures. Yeah, it's interesting. You mentioned early in the conversation about B.C. money is kind of run from the MedTech space because of the amount

of money and time and risk that's involved. Frankly, there's just better investment opportunities for general B.C. funds. and, you know, I kept seeing a number of great ideas that were just underfunded or couldn't get access to the capital to move forward. And, you know, as a contract manufacturer, we get to see a lot of new ideas as just part of the business. And first of all, I thought it was important that a contract manufacturer not be involved in potentially competing with its customer base. And so I never wanted to have Biomerics be an investor in, you know, it's customers for that potential conflict. But clearly there was a need. And so, you know, we formed Med Venture Holdings as an independent entity, private equity, that could evaluate these opportunities and help incubate companies to get across that line.

And so inside of MedVenture, we have IP attorneys. we have regulatory experts, we have, you know, accountants and those type of services that de-risk the projects. For example, I see a lot of startups that they get focused in on getting a quality system and getting capital equipment. And there's a whole number of things that at the end of the day actually don't provide any value in getting the technology to the end game, but are requirements. And so MedVenture had a model where we would provide all of that incubate companies, and we've done other investments that are already operating entities. But by bringing that expertise, the cost of getting a product down or across the goal line was lowered. And also the speed.

And I'll tell you that the speed is more important than the price, especially in this market. And so MedVenture looks at, you know, I'd say 20 to 30 opportunities for everyone that we invest in. we go through a process of a number of screens to identify, you know, the clinical needs, the intellectual property, the technical risk. You look at the market dynamics and look at the team that's going to be executing the program and then put together, you know, the right capital structure to enable the success of the idea. We've done over 20 investments so far. We've had a number of successful exits.

And, you know, it's really been a... an interesting model to understand those marketplaces and the best way to go about developing MedTech products. Yeah. If you don't mind, I'd love to unpack a few things that you mentioned with respect to MedVenture and really like sort of what you saw that sort of served as like the impetus for even kind of putting the building blocks together here. And then maybe we can, you know, talk a little bit more about, you know, some things that either

you learned some wins, maybe some losses, et cetera, things that you would do differently. But when it comes to my venture, I love the idea that you, what you noticed is like a lot of good ideas, but the capital needed for those ideas, like to get those ideas to the next milestone,

we're just unneeded. Like you could service, like within the construct of biomerics, you could service those needs without like excess capital. So I love, I love kind of your ability to kind of see, kind of, you know, read between the lines in terms of what,

you know, what most med tech startups, you know, struggle with, you know, in trying to get, you know, kind of go from initial idea to prototype to, you know, the various stages of manufacturing. But when it comes to Med Venture, do you typically, if you can share, I mean, is there an average, you know, check size versus equity stake you, you typically hold in a startup? And then, you know, what do you, I presume most of the time you're building these companies, you know, for an eventual exit, but are,

you know, are some of these companies, you know, are you holding on to, or you envision holding on to for quite some time. Can you maybe speak to, I threw a lot at you there, Travis, but maybe speak to some of those more, some of those questions that I just raised. Yeah, there's a lot there. Let me kind of start with the market at a large level. There is venture capital for game-changing interventional products.

And these are PMAs, new heart valves, new ways to treat items, and that market's well, well-funded and well-managed. There is also a pretty good angel community, of experts that want to invest in helping in healthcare. But there's this big gap between the angels and, you know, PMA type products. And venture capital really isn't looking at 510K type approaches. For those familiar, that's a, you know, a minor improvement or a device. It's going to make something better, but it's not necessarily new to the market.

And we saw that that that's where we. could provide real value in covering between an angel investment and, you know, around CD where, you know, all the work's been done. And now it's just time to scale a business. And it's that risky valley where real value can be created. And so that's what we targeted primarily. With that said, Med Ventures private equity, we don't have a fund. We don't follow a VC model, which is.

gives us kind of ultimate flexibility to, you know, take a look at an idea or take a look at an existing company and come up the right capital structure to, you know, achieve the business goal. And so I always tell people, we don't have a preset approach other than we're going to look at the real problem, the real capital needed, and then the structure to ensure not the upside opportunity, but to manage the downside risk. and if you structure a company correctly, it can weather the unknowns. And that's usually what gets people, right? It's not that it wasn't a good idea.

There's something that happens in the process that was unknown, and you've got to count on it. And if you are dimble and have the right structure that can deal with that, you'll end up with the right product at the end of the day. So that's been our approach. you know, the contract manufacturing relationship with biomerics is also, I think, a way to de-risk and speed things up that also can be helpful with companies. But I always tell everybody that, you know, each company stands on its own two feet with its idea, with its team, and with its market goals, and, you know, great teams and great leaders, then, you know, go through the process to deliver a great product.

That's lots of good stuff there. But one of the things that really stands out is the comment you made around risk. And it's interesting that you say that because I think that a piece, gosh, it was this, it was this week on, I think it was by Morgan. What's his, he's at a venture fund, Morgan Howsel, I believe. And he wrote a piece on the three kinds of risk. And I just pulled up a quote from that piece. He said, once you go through something like that, which was a life-changing, like life

or death experience for him personally, he said he realized that the tail in consequences, the low probability, high-impact events are all that matter. matter. And so it's interesting that you say that about a lot of your companies. It's not just the upside opportunity that you're looking at. It's how to manage the downside, this downside risks, right? Those low probability, but like high impact, you know, the chance of like the company completely failing. It's how do you manage those, which probably arguably are the most important, the most important risk. So cool that you mention that. Yeah, it's, you know, it's rare that people ever identified the real risk in business.

We all have our perceptions and we see the world as we see it, the better you can see real risk, the better you'll succeed, right? Because if the winds that you're back and, you know, everything's going great, it really doesn't take a whole lot of, you know, everybody can succeed in that. The real challenge is seeing where are those pitfalls and then addressing them so that they're just eliminated. And then it may take a little longer, but you'll still get there. Sure. When it comes to one, I guess one other kind of follow-up question when it comes to some of the more,

the more detailed questions around Med Venture holdings and who you typically work with is, are you finding yourself working with a lot of physician inventors or where, where do a lot of these, the 20 to 30 deals that you evaluate on a kind of on an annual basis, who's coming to you typically with those ideas and those various opportunities that. that you're betting? There's typically two kind of groups. One is physicians, and that's they've got a problem. They've identified it, and now they want to go, you know, get a solution to that problem. And I found that it's actually pretty rare. Most doctors are trained to get around problems, and many times they don't even notice that the problem exists because they've been trained so well

to manage those. But there's the rare few doctors that not only identify the problem, but then, you want to go fix it. And we love those type of physicians. They're truly entrepreneurs. And that's probably half of the projects that we see. The other half is usually industry experts that, you know, have a certain level of expertise and know that either there's a market opportunity or, you know, have identified a clinical need that can be solved. And, you know, we see probably, like said, 20 pitches a month with different levels of concept. And, you know, we screen them all within that same type of approach. But, you know, you know it when you see it.

That's always tell people. And when you see it, then you jump on it. But it, there is a process for it. Got it. And how often are you working in conjunction with larger OEMs, right? Because you, I mean, we both know that, you know, any more at a, at a multinational strategic that, you know, it's, when you think of R&D, it's mostly big D, you know, little, little R. But are you, are you ever partnering with kind of some of those bigger, you know, those bigger strategics in sort of incubating some of these ideas and pushing them forward in some sort of relationship like that? Less and less.

And the reason why you hinted at it earlier, the big guys bought by the small guys. And the reason that's occurring is because of the regulatory environment and the business structure that's been set up. The challenge of breaking into a new market to commercialize is becoming more and more difficult. And so the most common exit is to be acquired. Also because of those dynamics, the ability for the large players to decide when to acquire has been enhanced dramatically. And, you know, there are still probably more buyers than sellers in this market, but they can be very patient and they get to choose when they want to have those transactions. And we found that they're not as interested in the early development when the projects are risky. They would rather pay more later once that risk has been taken out.

And so the type of interactions are changing where they want to see the regulatory approval done. they would like to see, you know, all the clinical work done, and they would really love to see even some level of commercial activity and success happening. And then they're more than happy to, of course, pay for those type of products. It's not everywhere, but that's generally across the board what's happened over the last five or six years. And on the last thing that you mentioned, Travis, it makes sense. I mean, any more, I think most people in my close to this space, understand that large strategics are looking to de-risk the acquisition as much as possible. But how big is that third element, right? Commercial traction. Are you seeing that become even more

important in today's kind of M&A environment where it's not just the reg as the reg checkbox that needs to be checked or the clinical data that kind of ladders up to the reg strategy? It really, you need to, you know, in order to be acquired, you know, there's a high likelihood that you may need to see some commercial or showcase some commercial traction as well. Yeah, I always tell you, the thing that matters the most is the clinical result. If you create a product that works clinically, eventually that value rises to the top. The second biggest thing, of course, is the commercial viability of the opportunity. And there's a lot that goes into that pricing, reimbursement, channel.

And you really have to think through all of those in advance. typically how deals are valued is there'll be a model that's generated by the acquirer that realizes his channel power and if he were to acquire this and move it into their organization what kind of scale could occur and so that's what they're looking for is there enough commercial information to show that I can look at what you've done with it now if I took it where it would go and you know that would be the common model for, you know, improvements on products. Now, if you have a new solution to a really important problem,

then, of course, that's a real business to be built. Got it. Some of your comments kind of reminded me of an interview I did with a discussion I had with Paul Buckman. I recently published it maybe six months ago, but I actually recorded it back in, gosh, I think 2017 or something like that. But he mentioned, and Paul's kind of, I'm not sure if you're familiar with him,

but he's kind of a serial med tech entrepreneur, was early Fox Hollow, was that early SciMed, et cetera, et cetera. And a couple of things that he mentioned when it comes to like, you know, M&A in today's, you know,

med tech climate is that, you know, his advice would be don't look for the, you know, the three, four, $500 million acquisition. You know,

get your startup to the next milestone where it's a little bit more sort of, it's easier to digest, I guess, from an acquirer standpoint, you know, with the goal of it being, you know, semi non-dilutive, semi-low risk. And then the other thing, too, which I'd like to get your comments on, is that he mentioned you really need to make sure, like, to your point, Travis, the commercial viability is there, including how someone is going to get paid for using the device.

So the coverage and reimbursement landscape, which oftentimes is, you know, is overlooked, unfortunately. And so can you maybe speak to the latter, right? You know, how do you, when you're vetting a deal with Med Venture Holdings, how big of a, how deep do you go when it comes to coverage and reimbursement? In other words, if there's no CPT code, will you even do with the deal? So first of all, you're exactly right. It is the most under, it's the area where most of the deals are the least evaluated. And, you know, everybody has a great idea. Everybody knows a clinical need.

But it's really hard to get into a reimbursement. and hospitals and in the sales process itself. And we always have a process where we try to identify, you know, what is that one statement that describes, you know, in an elevator, why this is going to work. And that, if the financial piece of it isn't included in there, then you've got this big blind spot. And so we do look at all, we don't require a code,

but we do want to look at reimbursement. We do look at gross margin. That's the other area where if the gross margin is not additive to the acquire, then it's a no-go from day one. And so making sure that there's the right level of gross margin in the deal with the reimbursement is just critical. That makes it kind of sense. I know we're getting close to the allotted time that we had for this discussion.

So unless there's anything you want to maybe speak to with respect to MedVenture Holdings, I'd like to get to those last three rapid fire questions. But before we do that, is there anything that stands out, you know, whether it's key things that you want to make sure that you get across based on your, based on your experiences with Med Venture holdings over the last several years or anything else that you want to mention there? No, it's just a great fun market to be in where, you know, you're putting capital work that creates value for patients. and we love to look at new ideas and have people succeed. So look forward to always new opportunities. Very cool. So with that said, Travis, let's go and get to the last three rapid fire questions.

The first one being, and the rapid fire sort of in the way I asked them, don't feel, you know, feel free to kind of expound upon your answer. But the first one being, is there a business book, you know, that comes to mind that's been pretty impactful in your professional career? Yes. I don't know if I'd call it a business book or not. But I don't know if you've read, Marcus Aurelius's personal journal.

I've heard of it, but never read it. You know, it's, I would say half of the book is about business and how business should occur are moral reasons for business. And that's probably had the biggest impact on my approach to business is his journal. And you kind of ascribe to kind of the stoic, stoic philosophy or maybe certain aspects of it? For sure. Yeah, it's, you know, we could talk for hours on, on this one, but, you know, there's definitely some truth there. Yeah. Do you, are you,

do you know who Ryan Holiday is, that author? He, you know, he's, he's younger guy, but has, has written a fair number of pieces kind of that are, that have been, you know, form, you know, where Stoic philosophy has kind of, has been sort of a foundational aspect to his, his work. I have. And I don't know if you follow a lot of the business minds that are out there, but it's pretty common across, you know, people from Gates to Buffett to a lot of them to kind of have that approach to business. Yeah, I mean, Ryan Holliday is the one that stands out to me just because I remember reading his first book that he ever published called, Trust Me, I'm lying, Confessions of a Media Manipulator, which is actually, if you're a marketer, it's a really, it's a really interesting read that the title is kind of probably more. it's it's it's it's certainly a kind of a click-baity title but it's a really good book but it's it's

been interesting to kind of watch his his evolution because I think his other his other three or four books since then have been very much rooted in that you know in stoic kind of stoic philosophy so I think his last one being his last book being the obstacles the way I think if I remember right but yeah interesting that you I did not realize that about you that you kind of you you kind of I think highly of the stoics. So on that note, is there a business leader or mentor in your life that has been, you know, super impactful or someone that really comes to mind? There's quite a few.

I think one of the greatest things in business is partnerships. And partnerships exist because they produce the best outcome for both. And that's how I see mentors and how it's impacted me. I've got, and I actually called them my mentor. I have guys actually a whole group of mentors that I call quite often. And, you know, it's been probably the most rewarding part of business is those partnerships. And, you know, you go a number of years through business with people and you really get a sense of what that means and how, why it works and why there's an obligation to mentor other people as well. It truly is beneficial.

and, you know, I don't want to give out particular names here on this, but I'm very grateful for them. And without going into too much detail, is there, are there any, like, is there, are there one or two specific qualities that you look for, you know, in those, in those, in those kind of those mentorship or those, those partnership kind of relationships that you have? The first and most important is trust and loyalty. And it's not necessarily honesty, but a real mentor is going to be honest with you because there's that trust that's been, built and getting real feedback from someone you trust is the fastest way to grow to learn. And so that's probably the one common theme across the great mentors that I have.

And then, you know, I really look up to, you know, how they approach life. And, you know, they all have their unique talents, of course, that are, that are different. But that's the common thread. Got it. It's good to know. I love that. I love the fact that you're not necessarily that honesty is, is high on. a list, but it's not the highest list. Trust and loyalty are what stand out. That's cool. So

last rapid fire question, Travis, is if you had the opportunity to rewind the clock and go back in time, is there something that you tell your 30-year-old self? Great question. I've thought about this a lot. And I always wondered, you know, my career, I work for public companies and I got my MBA and I always had the aspiration of starting my own company. And I always wondered when. When was the right time to start? I started my company when I was 37. And I think I don't regret it all because there are so many things that were built up to then be successful. But I wish I would have done it a little sooner.

And, you know, I always tell people that you misunderstand risk if you put a lot of security in your employer. it's a bad understanding. Why are you valuable and why do they employ you? It's because you're valuable. The day you're not valuable, guess what? You're not going to be employed. So don't forget that the value you have is you, not the company that you work for. And once you see it right, then you realize, okay, you know, I can go do this.

And I see a lot of people want the security. And I got to the point where I just realized, you know what, today I'm quitting. And I quit without having the next thing lined up because I knew that I was ready for it. And, you know, I really respect people that see that and then take the action when they're ready for it. And, you know, I always wonder if I would have been ready earlier. But that's what comes to mind with the question. So start earlier. Yeah, that's good.

I mean, I've, you know, I'd like to think that I'd listen to a fair amount of, like, you know, interviews with other entrepreneurs, read a fair amount of that books. And that certainly seems to be a trend, you know, that comes up with other folks, too, that have started their companies, as they just wish they would have pulled the trigger, or pulled the proverbial trigger a little bit earlier in their careers. But nonetheless, it's been fun to see kind of your success with not only Biomerics, but, you know, Med Venture Holdings and what you've been able to do there. So I certainly wish you all the best, you know, in the future.

And I love the fact that you're still very bullish on MedTech. That's a, that's cool. Cool to hear. It's always, it's always good to hear kind of a positive spin in the midst of some, some challenges. So Travis, I'll hold you, I'll have you hold on the line. But before I hang up is the, before we kind of in the call here is, is the best place to learn a little bit more about biomerics, just the website, biomerics, which I'll link to in the show notes here, but it's B-I-O-M-E-R-I-C-S-Bi-O-M-E-RICS.com, and then MedV-V-V-V-E-V-E-V-E-V-E-V-R-MARICS.

That's just, that's the URL, MedVenture-Holdings. Are those probably the two best places to learn a little bit more about your contract, manufacturer as well as the private equity, kind of early-stage Med-TEC company that you have? That's it. All right, cool. And, I'll link to those in the show notes. And Travis, I'll have you hold on the line real quick. But for those of you listening, thanks so much for your attention.

attention. And again, don't be afraid to go on over to medsider.com and enter your email address. And we'll make sure that you're updated when the next interview goes live. We never spam you. In fact, you'll only probably get, you know, one or two emails from us a month just when the new conversation is published. So again, thanks for your listening attention. Until the next episode of Medsider Radio, everyone, take care.