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Because significant funding is needed to develop new, innovative life science and digital health products and tools, fewer ideas are making the leap from research institutions to product development teams. This clash between the short-term, earnings-driven needs of the medical marketplace and the risky, lengthy, and capital-intensive process of bringing medical ideas to fruition is a major challenge facing modern medicine.
Medical technology innovators and investors from across the country will gather Wednesday in Minneapolis for the 12th annual MedTech Investing Conference. With panels on alternative funding models, maximizing ROI, and the FDA on the agenda, we asked conference co-chair Dennis Wahr, CEO of Holaira, what insights life science and digital health entrepreneurs can expect to take away from the event.
Angel investors are wealthy individuals who make early-stage investments in and provide advice to startups. In a slump following the recession, angel investment rebounded in 2011 with angels investing $22 billion in entrepreneurs.
Looking for early-stage financing for your life science or digital health startup? Crowdfunding, in which individuals and teams can raise money over the Internet from dozens or thousands of sources in small amounts, has become a popular financing tool.
Traditional banks often don't know what to do with a business with no revenue and no developed product or service. But since bank financing is important for startups, it's a good idea to find a bank that understands startups' assets and the ebb and flow of startup sales and revenue cycles.
Jake Halpert, CEO of Lucidity Health, agrees with the conventional wisdom that the team is the most important aspect of an early-stage health care business. But, he added, an entrepreneur shouldn't wait for the perfect team to start his company.
"Raising capital in the Midwest is a lot different than raising on the coasts," said Kurt Brenkus, CEO of Wisconsin-based Aver Informatics. "We had to hit the streets making the rounds with angel investors."
"User entrepreneurs" have founded more than 46 percent of innovative startups that have lasted five years or more, even though the group only creates 10.7 percent of all U.S, startups.
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