Advice for getting venture capital investment for your start-up
Greenlight Guru provides three tips to get an introduction to a venture capitalist for your medical device start-up.
Getting a new medical device to market is a challenge. As if this process isn’t hard enough, you also have to figure out how you are going to continue to fund your start-up. If you are ready to start raising money for your medical device start-up, you might feel intimidated about where to start.
Up until now, your funding has likely either come from your own pocket, friends, or family. Now it’s time to raise a round of venture capital. If you are struggling to find investors, or you’re not sure what the best way is to reach out, you are not alone. That’s why we asked five venture capital experts for their advice about how to get an introduction to venture capital opportunities.
Avoid cold introductions
It may be tempting to begin outreach to venture capitalists without having a direct connection. This method makes it very challenging to connect with the right person and is typically not as effective as receiving an introduction.
Mary Jo Potter, CEO and managing director at Healthcare Angels says: “Cold intros are virtually useless. Going to gatherings where you can meet some of these folks is very helpful, especially now that they are happening again. Short of that, involvement with National Venture Capital Association (NVCA) is also a good idea.”
“I would encourage founders to have a well-constructed, forwardable, blurb for an easy warm introduction,” says Jake Prigoff, director of research at Gaingels. “It's the first impression for a company and should be well thought out.”
Get an introduction from a super-connector
The quality of your introduction is critical. There can be a significant difference between receiving an endorsement from someone who is familiar with a venture capitalist, versus someone who is well connected with the venture capitalist you are interested in.
Lisa Carmel, VP strategy at Ximedica advises: “Get a well-placed introduction from a super-connector—someone who knows both the venture capitalist and you or your start-up. The person who makes the introduction and opens the door for you helps influence your initial impression and steps in that potential investor relationship.”
Getting an introduction from a credible source is extremely important, says Anne DeGheest, founder and managing director at HealthTech Capital.
She says: “Contact the CEO of their portfolio companies and co-investors in these deals to get them to open the door...after you convince them.”
Convince a venture capitalist that your device will make an impact
Seeking out funding from a venture capitalist weighs heavily on your ability to make connections. To capture the attention of a potential investor, it is important to connect with an influential person and show them the opportunities of impact your medical device company has.
“The problem is not just getting an introduction,” says Allan May, chairman of the board at FundamentalVR, “you need to make it to the top of the pile of interesting opportunities they are already looking at.”
May suggests finding one of their advisors, KOLs, limited partners, portfolio CEOs, or other influencers.
After finding them he says: “Convince them your opportunity is a high probability for broad impact in a major medical market and therefore a great investment that they need to pay attention to.”
Figuring out who to talk to and receiving a reputable introduction will go a long way when you are seeking investors for your medical device start-up.
If you are an early-stage medical device, medtech, or digital health company interested in learning about best practices for raising capital and learning additional insights on medical device fundraising, you can read Greenlight Guru’s 2022 Raising Capital for Medical Device Startups Industry Report.