Medsider: Learn from Medtech and Healthtech Founders and CEOs - What it Takes to Bring a Medical Device to Market: Interview with Tim Blair, CEO of ICHOR

Episode Date: June 13, 2023

In this episode of Medsider Radio, we sat down with Tim Blair, CEO of ICHOR, an early-stage company developing a novel approach to thrombectomy in the peripheral vascular system.With a rich, 30+ year career in the medtech industry, Tim Bhas held diverse roles spanning sales, marketing, and strategy development, both in multinationals and startups. In 2009, Tim brought his strategic vision to NAMSA, shaping it into one of the world's first Medical Research Organizations (MROs). Currently, as CEO and co-founder, Tim is leading ICHOR on its quest to transform thrombectomy in the peripheral vascular system.Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and health tech 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 life science 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 a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.

You've got to have passion and persistence to want to do this because it's not easy, right? It can be very gratifying. You see, right, Scott, we see the people who have wins. We see the success stories that you and I are from industry and not everybody is. But what you don't see are the 27 failures that happen for every one success story we have. Right. And they fail for very silly reasons a lot of times. When you really unpack it all, a lot of these things fail.

because either they didn't have the right team, they didn't understand their funding milestones, they got blindsided by COVID. There's a lot of reasons why things failed, but most of it to me boils down to passion and persistence, you know, a will to just find a way to do it. 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. Hey, everyone, it's Scott. In this episode of MedSider, I sat down with Tim Blair, CEO of ICOR. With a rich 30-plus year career in the MedTech space, Tim has held diverse roles spanning sales, marketing, and strategy development, both in multinationals and startups.

In 2009, Tim brought his strategic vision to NAMSA, shaping it into one of the world's first medical research organizations. Currently, a CEO and co-founder, Tim is leading ICOR on its quest to transform thrombectomy in the peripheral vascular system. Here for you the key things that we discussed in this conversation. First, building a strong team from the very start and focusing intensely on user needs are crucial for successful capital-efficient product development. Second, one of the main roles of a CEO is to secure funding for the company. This means you need to ensure your product is not only innovative but fundable, and the only way to do that is to perform adequate upfront due diligence and market research.

Third, prioritize regulatory strategy from the very beginning and keep the communication flowing with FDA. A well-detailed plan dictates timelines and sets an overall. overall operational strategy forming the backbone of a startup's runway. Before we jump into this episode, I wanted to let you know that we just released the latest edition of Medsider Mentors Volume 3, which summarizes the key learnings from the most popular Medsider interviews over the last several months with folks like Jim Persley, CEO of Hinge Health, Carol Burns, CEO of Cajid Vascular, and other leaders of some of the hottest startups of the space. Look, it's tough to listen or read every Medsiter interview that comes out,

even the best ones. But there are so many valuable lessons you can glean from the founders and CEOs that join our program. So that's why we decided to create Medsider Mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs in one central place. If you're interested in learning more, head over to medsiderradio.com forward slash mentors. Premium members get free access to all past and future volumes. If you're not a premium member yet, you should definitely consider signing up. In addition to every volume of Medsider Mentors, you'll get full access to the entire library of interviews dating back to 2010. This includes conversations with experts like Nadine Yared, CEO of CVRX, René Ryan, CEO of CalaHealth,

and so many others. Learn more by visiting MedsiderRadio.com forward slash mentors. All right, Tim, welcome to Medsider Radio. Appreciate you coming on. Yeah, thanks for having me, Scott. Appreciate it. We had a little fun pre-interview discussion here, so I'm definitely looking forward to the full thing and diving into iCorps and kind of the journey that you've been on over the past, not just, you know, several years with ICOR, but really just your history because you've got a lot of really great med tech experiences. But with that said, I recorded a very brief bio on your, kind of your background at the outset of this interview. But let's start there. If you can kind of give us a, you know, one to two minute kind of elevator pitch on your journey in the device space,

you know, leading up to your role as CEO of ICOR Vascular, that'd be great. Yeah, good deal. So, well, thanks. You know, 30 years, Scott of, I think I'm creeping up on 33 years in MedTech. I had uncle, a father, you know, they ran companies like Smith and nephew. They, American Hospital Supply Baxter. So as I think about Christmases and Thanksgiving, no, MedTech was kind of, I don't know that I had many choices coming out of college.

It just kind of happened. So really, you know, carried the bag, sales, marketing, managing GPO's, strategic accounts, you know, heads of marketing. So I spent my career really in MedTech in a lot of kind of commercially facing roles, which was, you know, obviously great for a career and building my career in MedTech. And then in 2009-ish, I made a move over to kind of a different side of the MedTech space. I moved over to NAMSA. NAMS, today, you know, the largest medical device testing firm in the world at the

the time when I joined them, we did biocompatibility, right? We were an animal testing lab out of Toledo, Ohio, pretty under the radar because we dealt with animals. You didn't ever hear about NAMSA pounding their chest. But the vision at NAMSA was, you know, hey, how do we become a bigger partner to the medical device industry? How do we become more than just an animal testing lab? And so I led and participated in a lot of the strategic growth initiatives at NAMS. So we were really looking at how do you become a better service provider to Boston Scientific, Medtron, you name it, right? And it was acquisitions of, well, OUS acquisitions of animal facilities, right? They're global, multinational.

How do we become global like them? But also, you know, the service acquisitions of regulatory services, quality, quality systems, looking at clinical CROs that are very fragmented by putting them on a NAMSA platform. created value for industry. Not only the big companies, right, because now you're a better service provider. You can do more for the big companies as far as, you know, those different services, whether they want to outsource them or not,

it's a different question, but it also supported innovation, right? Having all these services under one roof, a reputable company like NAMSA, right, global and scale. There was a value proposition as well to the early stage companies. And that's where I really cut my team. teeth on, you know, you do all the sales and marketing all your life. And Scott, I always tell the

story, you know, how many times I had to go back to my regulatory and R&D partners in my career, basically apologize, right? Because I don't think as a sales and marketing guru, I really understood how hard it is to get a device to market, right? Beyond the regulatory and compliance challenges you have of getting a device to market, but the fundraising involved, right, all of that stuff that has to align and happen. And you go, wow, no wonder it takes 24 months to get a damn device to market. And so I gained a new appreciation of really how hard it is to get devices to the market. And that's really what brought me to ICOR. If I think about my my backgrounds and sales and marketing in the cardiovascular, peripheral vascular space, and then

spending 10 years at NAMS, are really gaining an appreciation and know-how of, of, uh, of what it looks like and watching these, I mean, thousands of companies I got to watch and participate with just successes and failures and why people do things the way they do really led me to ICOR. You know, I-Corps is basically my physician backgrounds, people I knew and trusted in the KOL communities, concepts, ideas we've been thinking about for years and saying, why not us? Why don't we do this? And that's what really spawned ICOR was that ideation. kind of coming forward and saying, you know, building prototypes and starting to move these things, these concepts through the development process. And here I am today leading that effort.

I've kind of combined all my background into leading I-Corps today. Got it. Got it. And I'm looking at your LinkedIn profile now, Tim. And it looks like you kind of officially joined I-Corps late 2018. We're recording this in, you know, Q2 of 23. So you've been out at, you know, it's called five years or so. something like that. I'm, I'm, I'm, I'm anxious to kind of dig into that, that journey over the past half decade, decade or so. But that, that, that, that overview is super helpful on it. And, and amazing to think that you joined NAMSA when it was just like a bio comp shop in Ohio, you know, because I, you know, I think most people that are listening to this are familiar

from NAMS. It's a beast, right? And, uh, and sounds like you were, you were a large, a large, a big part, you know, and driving, driving the growth of that, that organization. That's cool to hear. But the biggest question I think I have listening to your bio is at Bingo, you know, on Thanksgiving's at the Blair family. Was it, was it MedTech bingo? Was it like, you know, name, name. I think so, Scott. I mean, as I recall, right,

I had an uncle who was kind of a senior leader at Olympus, right? I had an uncle who ran Richards orthopedics, which became Smith and nephew. And then a father who built his career and moved up through the ranks at the old American hospital supply, which eventually became Baxter. and it was just listening to them talk about products and medical device community. And then a lot of that becomes your network, right?

So it was really just more of a, as I'm coming out of college and I'm thinking about, well, what the heck am I going to do, business, marketing, major? I jumped right into sales. And some of it was just networking through people they knew, had opportunities to get into sales, kind of something they don't teach you, at least back then, right? Nobody taught sales. How do you do sales? I didn't even know what this was, right?

But it was a great, you know, for me looking back, it was, for me, everything is, the value was carrying the bag. Yeah. Right. Learning how products are sold, learning how to get products on the shelf, developing, you know, as I look back in my career, the decades and decades I spent building trust and relationships with KOLs that are today just invaluable. Right. And that's part of my value proposition and where I'm at today is just, you know, spending my career in the space has allowed me access. Yeah. And it's given us that type of success. So it's been, that's how I got there. I have no regrets, right? I look back on it. I tell people, once you're in this kind of vascular community, it's pretty incestual, as you know.

people know each other. You've got to keep your nose clean if you expect to stay in this space because everybody kind of knows everybody. They don't wander too far once they're in it. No doubt. Yeah, no doubt. It's been good to me and I enjoy it. Yeah, yeah. And I think your comment, we'll dig into kind of the journey with ICOR here in a second.

But I think your comment with respect to when you made that move to NAMSA and you kind of, you know, going from largely commercialization rules to now kind of fully understanding the life cycle of of how a device kind of, you know, goes from, you know, early stage development to eventual, you know, eventual approval and launch. So important, right. I'm sure there's, you know, endless, endless, you know, lessons learned in that experience. But I think the opposite is true. I'm sure you'd agree with it. I can always tell that even if someone has maybe a regulatory background, an engineering background, I can always tell if they spent either time carrying the bag or times in the, like a lot of time in the field because they get it. They get it. And it's so

important to kind of like, you know, marry both of those, both of those experiences together. Because, you know, it's right on, Scott. I mean, let's go both ways because it's a fun topic for folks. But I, you know, I know my days at NAMSA and some other incubators that I've worked at, right? There were a lot of people building things and developing things in a bubble. And I found myself sitting at these tables with regulators and quality people and engineers. And I'm going, they don't get it. They don't understand the. workflows. You guys, hold on. That's not how this process works. It doesn't just, and so trying to gain an appreciation, I found bringing marketing people and physicians into those discussions

with companies, I found to be incredibly valuable, right? Because sometimes engineers and others can't appreciate what really happens in a lab or an OR. And I would just sit there and listen to these conversations and go, no, you don't get it. And so understanding that is so critical to me and part of the development. It's also equally important in your early designs, design for manufacture, all of those things to me have to be considered and thought about. And it is amazing, Scott, how often it's overlooked. I mean, to be honest, it sounds obvious. It still is missing a lot of times.

And then the converse is true. I've sat with sales and marketing people who, you know, oh, these morons, they don't know how to go up. I'm like, well, hold on. There's a every marketing change you make, right? Here I am now using my NAMSA hat in that background going, okay, that sounds great. iterate, change this, tweak that, change that material. And I go, you just went down another PMA. That's another 510K.

The regulatory impact of doing all those things, you know, so. marrying all that, Scott, I think, is incredibly important and valuable and often underutilized. I mean, again, I say it's so obvious. I hear it up at people's talks, I hear it, but then I go in the real world, I'm like, but you didn't do it. Right. Yeah. And it just baffles me sometimes. Yep, totally, totally. Well, let's use that as a transition point to talking a little bit more about I-Corps and then we'll kind of go back in time and learn about the journey. But For those listening, it's iC-C-H-O-R-Vascular.com, iC-H-H-O-R-Vascular.com, iCore-Vascular.

Give us a high-level sense for kind of what you're building. And then, you know, where you're at in terms of, you know, regulatory clearances, approvals, commercialization, et cetera. Yeah, so at a high level, what are we doing? You know, our thesis when we started this was working in hybrid suites with interventional radiologists and vascular surgeons treating clot, right? Peripheral clot removal. And the aha moment was really just watching these surgeons do fogarty procedures, right?

Fogarty procedure for those who don't know is very simply, if I speak like a plumber for a moment, is cutting into your vessel, going in with a little soft, very delicate balloon, inflating it and sweeping all of that clot out of your body out to the incision site. 50 years we've been doing that procedure. And we just sat there and watched it's like, wow, that mechanism of action is so great. It works, right? I'm clamping down on a vessel. I don't have blood loss. I get this mechanism action that's really actually been proven for the better part of 50 years. It works great. It's just surgical. It's a surgical cut down. It's general anesthesia. Is there just a simple way to make, can we just take that mechanism of action and make it endovascular and replicate those other elements of arresting flow, right, of that balloon mechanism of action? And can we just put it? And that

was really the aha moment is, you know, can we do that and replicate that? And then we were just students of reimbursement, right? We knew the reimbursement game. We just felt like there was an opportunity as we've watched health economics get a little bit out of control with these types of procedures say, let's just make sure we incorporate a health economic element to this, right? We think the future of these procedures are going to move. They're going to go to the OBL space, the outpatient arena, ambulatory surgery. Some of that's going to work. So there's got to be an economic element to everything we're building.

And that was really what we sought out to build, Scott, is something that could impact outcomes, be very a simple tool, easy to use, proven, and address the health economics. And essentially, that's what we've built today and submitted to the FDA. And where we're at status-wise is, as you know, this takes years of development and validation and animal bench. cataviric work to get where we are. But our expectations are this summer into late summer, we expect to have an arterial skew

and a venous skew, both cleared by the FDA and starting to get into our real world experiences with the devices. Awesome. Awesome. Yeah. Super exciting times, especially after years of development. But you hit on a couple points that I'm hoping we'll dig into, which is at least one of the one of the points that you mentioned that really stands out is the health economics piece.

And I think so many med tech entrepreneurs miss out on that component early on in development, right? And you mentioned kind of the shift from hospital-based procedures to OBL or ASC, the ASC side of care. And you kind of had a lot of sight. It sounds like you had a lot of side into that and sort of, until you use a cliche, you know, sort of try to skate where the puck was moving. And so hopefully we'll dig into those points in a little bit more detail. But before we do that, let's go back in time, step inside the old Medsiter Time Machine, as I like to call it, and take us back to, you know, late 2018, maybe into early 2019, you're beginning to build out your alpha and beta versions of the, of your thrombectomy devices. And maybe, you know,

frame this up with your experiences at NAMS, too, because you saw, you know, you worked with a lot of startups there, too, but what are the like maybe one to two pieces of advice that really stand out in those early stages that, you know, founders, CEOs need to get right in terms of, you know, maximizing capital efficiency yet moving quickly through those various device iterations. Yeah, a lot to unpack there. So I think, you know, when we're going through the early stages, you know, there's some lessons learned here and I don't have to get into all of them. But, you know, we've been very, we've gotten better and better at partnering, right?

So key partnerships are critical. And I'm going to use, it's your core team, right? team is everything. I always tell everybody when you're building this, right, you've got to have a core team around you because, A, it helps you minimize mistakes and minimize risks, of course, right, because of your knowledge, your insights, you know, your experiences, but it's also what investors are looking for, right? Investors are investing in teams. They love tech, they love cool things, but they really love the team, right? So I always try to point people to even at the early stages, make sure you don't discount that, is that you've got to have a core team around you.

And part of that, too, is then great partners, right? Partnering with people who are trusted, people who have been around the block. Maybe, you know, I'm a little leery of young engineering firms, for example, because are they going to be here in six, eight months, right? Medical devices take years to develop. I don't have time to keep changing engineering partners and the like, right? So making sure that you really go through a due diligence process of choosing your partners wisely, even at those early stages, because it becomes that continuity is so critical, right? Otherwise, you're stopping and starting, your milestones start missing and things, they just start getting challenging very quick, right?

So those are some things at the early stages. I really try to encourage people that have nothing to do really with design per se, but they have everything to do with you got to get early money. you've got to have early partners who can help you navigate these early stages. And I think that all starts to lead to capital discipline, the efficiencies, and those sorts of things because you're building that continuity and you've got a team that's able to kind of minimize those risks that you're going to be dealing with as you get into it.

And then from there, you know, I think a lot of it is kind of what we talked about is, you know, in these early designs, it's very easy to get stuck in development in a bubble, right? you're just kind of get a small team and you're kind of cranking away. And I just try to step back and say, hey, let's make sure it's not just our inventor, right? He's an experienced user.

He's top of the food chain, right? I want to know, hey, what about the average guy? What about the less than average position, right? What about the techs? What about the nurses, right? And I try to just make sure that we have a little bit of an ecosystem around us of other stakeholders, right? And then it's the marketing people. It's, it's obviously you've got the engineering insights and those things, but I really try to make sure that I check all those boxes of, you know,

regulatory strategy, right? Do I have a clear path to market? Do I understand what that IFU looks like and what that eventual indication will be, even at the early stages, right? Do I have a reimbursement? I don't know that I need the game plan out of the gates, but have I thought about it? Do I understand and what we're getting into from a re-end, who's going to pay for this someday? And then I got my KOLs in marketing and other key stakeholders that are kind of impacting my design inputs, right? Those must have things that we want to build a good alpha or beta prototype. And then from there, I'm just a big believer on sometimes it's good enough, right? Because then you get stuck the other way, Scott, is you get stuck in, if I gave this beta and this alpha,

hell, if I even gave our current device that's getting ready to go for market, if I gave it to 50 people, everybody's got an opinion, everybody's got a tweak, everybody's, you could get stuck in endless iteration. And so I get to a point as a marketing person where I wear that marketing hat and I go, okay, it's good enough, right? Gen 1 looks good. We've got to let the market start to dictate those future iterations. And I just, that's me in MedTech, right? I'm a big believer in. It's different than pharma. Get your, device to market, make sure it's safe and efficacious, but be prepared to iterate, right? And that's where we're going to really learn as real world's going to tell us what we've got to change, what we've got to tweak. And that's just kind of my thought process in those alphas is we've got to get to good enough, right? And so I hope that speaks to kind of those early stages. And I think those early stages then really help you map that path forward. I mean, I think that's a big part of it is once you've gotten to that phase, at least the boards I sit on, I really try to make sure those young entrepreneurs have a clear path that's regulatory driven, but that your milestones

are well mapped out. What are those value creators? What are those things along this path that people actually care about, right? Not that you care about, that investors might care about. And so how do we budget time and money to make sure that we can hit these milestones? And that becomes, right, now I'm segueing into funding strategy. People say, well, how do you know how much money raise? Well, it starts to become clear, right? And then you can strategize with your team about how much money, when, why that money, not all the money, right?

You can start having those debates. But I see a lot of companies, Scott, that don't have this mapped well, right? They have a little budget. I'm like, how'd you come up with that? Yeah, you're a ballpark. Boy, where's the regulatory thing that's kind of, shouldn't that be guiding some of this? How much testing?

How many units? I just feel like that's a big part of building that strategy forward. Now you've got a clear path forward. You've got a clear amount of money, time, and now you can start to really build a credible story. You've got early prototypes being built and developed. And you've at least now, you've got a good story to start telling

because fundraising is hard. That's where I'm going to go next. Now the hard part becomes. That stuff to me is easy. Getting that early stuff funded is great. This next valley of death is, to me, very difficult. And then you've got another valley of death when you're ready for commercialization. That plan all you want to sell your company at approval,

probably not happening. Yeah, right? So you've got some really big value. of death that you've got to start thinking about and planning for. Yeah, there's these chasms. Yeah, these valleys of these, I know, like the valley of death is a great way to describe these chasms, right, from inflection point to inflection point. But you, Tim, you hit on on something that I think, you know, comes up quite a quite a bit in these, you know, conversations with other other founders and CEOs like yourself,

MedTech founders and CEOs like yourself is that too many times, you know, someone, you know, a small team, a physician, an engineer will be working on a cool concept, right? but they've not thought through those clear milestones, right? And so, you know, I think that's so crucial. The other thing that I think you mentioned really well, and it reminds me of a recent conversation with Ohad Arasi, who's running Clarius, which is a kind of cool ultrasound technology, he mentioned something similar to you in that when you can't design these devices

in a bubble. You can't do it. You've got to like, you've got to get in the weeds and understand kind of workflows, different stakeholders, et cetera, but also balance that against your point, a point you made earlier. or at some point, you've got to call, you got to make a decision and say, okay, this is good enough, right? We're going.

And I think that's so crucial in the world of startups is you got to be a decision machine. You know what I mean? And at some point, sort of like, hey, we're 80, 90% confident. Like, let's go, you know. And got to move the business forward. Yeah, exactly. Exactly. Yeah.

Really good points there. And I think another key element at that beginning, Scott, that I, you know, you started to go there, you know, is this even fundable, right? I mean, how many times you, you just said. somebody's building a cool device. They haven't thought about all these things. Okay, we're building cool stuff. And I come back to some of them and physician inventors and other things.

They create cool things. And I go, how big is that market? How many of these are done a year? Oh, there's 40,000 done a year. Oh, this is about a $5 device. And I'm doing the math in my head going, I get it. It's really cool for you. I don't think this is fundable.

And here's why. I don't think the market is big enough for investors to get excited about. I get it, but geez, you're going to spend $12 million to get this device to market in a market that might be, what, a $50 million market? I go, I don't like to poo-poo ideas because sometimes I don't know what I don't know, but I don't, I don't see the clear market opportunities sometimes with these deals. I'm looking at it. I'm looking at the slides going, it's not. clear to me and I'm in medical devices and I don't see the market potential. How are you ever going to convince an investor this? So I'm a big proponent early on of before I start spending all

this money, tens of thousands of dollars on devices and cool, cool early prototypes, do we have a clear market here, a market opportunity that investors are going to go, oh, wow, that's okay, that's sizable. I get it. I see it. It's missing a lot, Scott, at that early stage. And I go, wow, I don't know how you're ever going to get this funded. It's not and it's got to be crystal clear. Yeah. Yeah, no doubt.

Yeah. If you're struggling or if it's fuzzy, you're trying to paint that picture of that narrative of how the size of the market and how you're going to actually take share in that market. Like that's a difficult, that's a difficult path forward, right? Because as you mentioned earlier, you've got to go from like milestone to milestone. You've got these valleys of death, these chasms that you've got to cross. You're going to need capital. 100% of the time, unless you're funding.

it yourself, which, you know, not too many people are. Yeah. You're going to need capital, and that means you're going to have to convince others to get on the train, you know, and if your, your train is going in a direction that isn't to the promised land, that's going to be a tough, a tough road. But let's talk a little bit about that, you know, because you've, a little bit more about fundraising. And I want to circle back around and maybe your thoughts on, on clinical strategy, considering your breadth of experience at NAMSA. But some of the toughest money to raise is, from my perspective is, you know, seed, series A, et cetera. So when you think about coaching up other entrepreneurs that are in that boat, maybe they've got a little bit of friends and family money in, maybe they

funded it themselves a little bit, but they need to take that next jump and, you know, put together a solid seed round or solid series A. You know, what's some of your best advice, you know, to those other founders that are going to be listening to this conversation? I sit on a couple of boards of early startups and these are pretty common discussions, right? I'm, I think there's a couple key things here. One is I try to get all of my entrepreneur buddies who are just saying, I want to do what you do. And I say, you're insane. I can't wait to not do this. No, I'm kidding. But, but, you know, A, I try to prepare them.

You know, this is a lifestyle change. It is, if you're coming out of sales and marketing, you probably make a lot of money. And there's some sacrifices you're going to make, right? So I'm working with a couple of folks that, you know, they've got young families. Seems like I just want to make sure from a lifestyle standpoint, people understand, A, what they're getting into as a CEO.

And then how important, you know, the main job of that, leader is singularly money, right? Fundraising. Like all that other stuff's cool and great idea. Okay, you're going to participate and be involved in that because you get to wear all the hats. But that fundraising thing, it never stops, right? As much as you think it stops or you have phases, money takes a while to raise. It takes a long time to get commitments. It takes time to actually get money actually in the door. It's a long process. So I just try to prepare people for that. And then, you know, like you said, it's understanding those milestones and it's, it's thinking creatively, right? Especially at the early stages, angels aren't touching you. VCs

certainly aren't touching you, right? So where does all that early money come from? Well, I know how we did it and I think I can speak for most startups. There's some self-funding that has to happen. And that's a very good thing, right? It's your own commitment. Most investors, want to know, Tim, how much money did you put in? How much did he put in? So how much money do you guys? Do you have some skin in this game? And so you're going to have to take some early skin. I try to prepare everybody like, guys, you're going to have to. If you don't have skin in the game, I get it. You might be able to get away with it. I just don't think it's going to be smart down the road. You're going to want some skin in the game. So just prepare to figure out how are you going to take some skin in the game? And then that early stage money is high net worth. individuals for me. I think it's very difficult to expect any angel group to be coming in early. They say early. They don't mean early. Early's a definite, you know, everyone's got a different definition of what early means, right? But it's high net worth of individuals, right? It's your KOL buddies. It's, you know, some people maybe you know from industry who can rally behind you to get to

those measurable milestones where angels do start to take an interest, right? Where they start to to you're de-risking, right? Everything you do is de-risking to the next moment, and you've got to get to that inflection point where the bigger investors will come in. And so there's a lot of strategies there, right? Scott is there's vehicles to do it. We constantly have valuation discussions. I'm a big fan of taking valuation off the table, right? I love convertible notes. I love safe notes, right? There's vehicles out there that young entrepreneurs can use to kind of get yourself, you know, stay focused on the technology, stay focused on the market. Let's not get stuck in valuation discussions because they don't go

anywhere. There are vehicles out there, right, that you can use and get educated on that I think, you know, early stage investors can kind of get behind, assuming your market opportunities big, your early stage ideas look promising, right, your team looks promising, right? Get the blocking and tackling in place and then, you know, see if you can appeal to those high net worth individuals. So that's, that's realistic, Scott. I mean, for anybody to think they're going to go out, I hear people right now say, yeah, but I know this guy over a private equity firm, blah, blah, blah, I'm like, I know he's your buddy, but it ain't happening.

Right. He works for a big firm. They want 20 million in revenue before they even look at things, right? But it's that education of trying to make sure entrepreneurs kind of understand. how this funding is going to work. And it's going to be a lot of work, right? It's a lot of smaller-sized checks trying to come together to help you get to, you know,

to unlock value. Right, right. Those are a lot of good points there. And just you mentioned a couple of vehicles. And a lot of these have kind of been popularized more in the tech ecosystem, right? But, you know, Angel List has an SPV now, you know, for those listening that's really easy to use. Of course, you can use traditional, you know, saves or convertible notes. There's another tool that I really like.

I've never used it personally, but I like where they're headed is Fairment.com. It allows you to kind of, you know, raise money from sort of your community, right, which is oftentimes, you know, your KOLs, your physicians, your, you know, in any, you know, industry stakeholders, as an example. And that reminds me of, I'm not going to name the company, but they recently exited. And one of the founders mentioned that very same thing is like a lot of the early money in, Of course, there was some physicians, but he goes, some people are surprised that actually the majority of it was from industry, right? These are like VPs, directors, sales folks, marketing folks that are making pretty good money and they're open to kind of investing in kind of the next thing because they know the space so well. And he mentioned actually a lot of those ended up a lot of the same early high net worth individuals ended up investing in the follow up rounds too.

That's how we did it, Scott. I mean, if I told you what our captain is, table looks like. It's, it's, uh, of the high net worth individual. Like we've got some angel investing now, now that we're closer to commercialization, right? But prior to to these angel groups coming on board, it was, it was all KOLs. I'd say probably 60 plus percent of our cap table is filled with physicians and or industry people who, who could get it. Right. And I think that's a, and that's a great thing to think about as you think about, people who are investing, right? Especially in med tech,

it's just people like to invest in things they understand, maybe that they can impact a little bit, that they can get their head around. You know, we've struggled when we get on the phone with people and we go, they're not from industry and it's hard. We have found it historically very challenging just to educate and try to get them up to speed. It's like, ah, boy.

And so we've really tried to vote, you know, energy is everything for us. We talk all the time about, you know, money is great and time is important. Your energy is really important. And so we try not to get into rabbit holes, right? We try to focus energy on things that are good or have a chance versus exhausting lots of energy on things that don't go anywhere. And you can chase your tail and fundraising around.

So that's like I tell people, just, hey, let's focus on people who are kind of in our space. They're just easier. I'm telling you. It's going to be easy. Trust me. I try to get those genre creators, just stay focused over there. They'll come around, you'll see. So something to think about that you kind of alluded to.

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