CEO, Medtech Innovator (MTI)
I have had the pleasure of serving as a judge, advisor and mentor to Medtech Innovator over the past few years and two Veranex Solutions companies, Ximedica and Experien Group, have been sponsors for the past five years. At the heart of the success of Medtech Innovator is the active, robust ecosystem that CEO, Paul Grand, has cultivated. When many organizations retrenched in 2021 due to COVID, Medtech Innovator (MTI) expanded; in fact, MTI had over 1,100 applicants in 2021. The MTI team successfully pivoted in March 2020 to a virtual year-long accelerator program due to COVID. At Advamed’s Medtech Conference at the end of September 2021, the competition culminated with Alva Health being awarded the grand prize. The 2022 applications are being taken now with a deadline of January 31; I met with Paul to find out more about the genesis of Medtech Innovator and what the 2022 program will look like.
What is the genesis of Medtech Innovator?
(PG) I was an entrepreneur in tech, biotech and medtech and founded eight companies. The last company was in biopharma, and at the time one of the investors was RCT Ventures. They could see I was getting bored with the pace of screening drug candidates, and they made me an offer to be a part time CEO of a portfolio company they had been incubating. After working together for a while, I mentioned that I had been thinking of starting a seed fund in Los Angeles. In 2004 RCT asked me to join them full time, and I became a venture capitalist. I thought I would do that for a year and learn venture capital; I stayed for 12 years, as it was the best job I had ever had.
What drives me at Medtech Innovator is helping innovators; what I loved about being a VC was helping people. What I liked least was saying no to entrepreneurs whose things I really liked. If we said ‘no,’ I would try to connect the entrepreneur to others who could help them. My superpower is being a super connector.
Then in 2008 we had the financial crisis which contributed to some bad years for medtech venture capital; the 2010 vintage funds were largely underwater and losing money. Early stage medtech venture capital was especially thought of as dead. I was one of the few remaining guys doing most of sourcing of medtech deals for RCT. In 2012-13 I was doing outside sourcing; I was the external guy who would go to conferences and I saw the problems. In 2013 I was speaking with Casey McGlynn, Partner at Wilson Sonsini Goodrich & Rosati at the JP Morgan Healthcare Conference; we noted that the medtech innovators were not there or at most of the other conferences. We discussed what we should do, and I came up with the idea of an ‘American Idol’ for medtech. A pitch competition on the main stage at his conference. No one else was doing it at that time. Casey was amazing and asked me what I needed to make it happen. I requested for an hour on his stage at the Wilson Sonsini Goodrich & Rosati Conference in June 2013. Brad Vale, who led ventures at J&J, Chris Martin President and CFO of RCT, and Ned Scheetz of Aphelion Capital served as judges, and we had 10 companies present. That was our start, and it was a terrific success. When all else was gloomy in the financial markets, we managed to get the innovators back on center stage.
What was the strategy for how you modeled the MTI program?
(PG) Back in 2013 there was lots of innovation, but people were disconnected. Important points – I was seeing a lack of innovators at conferences and a disconnect from what they were developing and with what industry or the strategics wanted. I was finding promising startups who were making avoidable mistakes. I kept saying I wish I met them (the startup) a year ago. Susan Morano, VP Business Development at J&J and I said that we needed a time machine so that we could meet startups earlier and help them get them on the right path.
Innovators were not part of an interconnected peer network; back then there were hubs but not industry wide. There was a clear need to solve for bad advice and to get thoughtful, deep experienced advice to seed stage startups; this advice was needed from people that commercialize the technologies and that was the genesis for the accelerator part of the program. We sought to:
- Put startups on large industry conference stages for visibility, to be on the radar.
- Solve for bad advice. Get a range of right resources to give high quality advice.
- Build the best ecosystem possible by bringing the world’s best resources to the best innovators.
Tell us about the mission of Medtech Innovator.
(PG) Our mission is to improve human health. We use that lens in everything we do. We evaluate technologies to determine if they are incremental advances or disruptive because we are seeking truly transformative changes to improve care. What we are not trying to do is make incremental improvements better than the last generation. We are about finding innovations that can have a significant impact on outcomes and economics.
What is a key focus for Medtech Innovator?
(PG) We focus on the innovator or startup founder. Our name is ‘Medtech Innovator’ for that reason; we are supporting innovators – it is all about creating a community and ecosystem to support them on their journey. That is why you see them hugging each other at our reunion events. There is nothing like this in the world. I have been in this business for years; I didn’t think I needed an ecosystem, but I do. I appreciate it.
What makes Medtech Innovator unique and valuable for these innovators?rms?
(PG) I hear this all the time – that they get advice during MedTech Innovator that no one has ever told them before, and it is true. At MTI we give honest feedback. We surround them with folks who are qualified to give real feedback so that it will holistically help them.
Local ecosystem accelerators are 90% of all accelerators. They try to help but at a local accelerator it is hard to say your baby is ugly; it is difficult to give honest feedback. MTI leverages the value of honest feedback from best in the world experts.
It is also an important thing to solve for 1) bad advice and a lack of advice. I try to get a lot of experts from different facets to provide multiple viewpoints and inputs. For instance, if I have an entrepreneur with a new non-invasive blood pressure monitor, I know they will need expert opinions to help the innovators, and I can get them opinions from people who have seen a dozen attempts at non-invasive blood pressure monitoring. Our experts participate because they know it is early and want these technologies to succeed.
What was the tipping point for MTI?
(PG) At the end of our first event at the 2013 WSGR conference, David Cassak, Managing Partner of MedTech Strategist asked me to do another event at his conference in San Francisco in 2013 and then at his conference in Dublin in the spring of 2014. That showed there was demand. The tipping point was Advamed, the largest trade association in medtech. I regularly attended the annual Advamed meetings which were held in D.C., but I was one of the few west coast guys that went. It had a totally different attendee base versus west coast events. I worked out an arrangement in 2014 with the leadership at Advamed to hold a competition to sponsor a startup to go to Advamed and present. After seeing over 100 companies apply and the winning startup founder we selected presenting in a small room at the conference with me as the only investor in the room, I realized there was a great need for a different model.
Soon afterwards, Advamed held a CEO round table to discuss a Deloitte report on the series A crunch – it found that early-stage medtech startups were not getting funded to progress from seed to series A. It was noted that if the industry didn’t step up and do something these startups would run out of money and the pipeline would dry up. The discussion provided the impetus for me to create and run our Medtech Innovator accelerator program.
We built an accelerator and Advamed committed to being our partner. A key feature was that their prior pay-to-present model was eliminated and replaced with a merit-based model where only startups vetted by MedTech Innovator as an accelerator company could present at the annual AdvaMed meeting. We committed to hold our annual finals competition at their conference and they committed that it would be on their main stage.
The industry recognized they had to get involved to help startups. MTI created a program structure; we were at the right place at the right time. Then we had a line of people who all pitched in – RCT and J&J seeded it to get it started. BD was next to support us, then Baxter. Then it snowballed with 27 corporate partners as of 2021. RCT spun out MTI in 2016 as its own entity and I went with it as its CEO. It was formed as a nonprofit organization focused on solving this problem of accelerating a healthy pipeline of medical innovation.
What convinced you to leave your venture career to lead MTI?
Career wise, MTI gives me a clear opportunity to scale to have a far bigger impact and help more innovators and patients that I could do at a typical VC. Personally, it gives me the opportunity to say ‘yes’ to a lot of people. I love that. I was already connecting many of the people who I passed on as a VC, but now it could be my job. I could make hundreds of people a good fit.
Seeing the demand from industry and that strategics were aligned with the same vision was equally satisfying. Strategics who have a focus on external innovation had the mindset and desire to get engaged at an earlier stage. Going to a conference just didn’t quite cut it. There was a great appetite for it. I could see it. Corporate venture executives were very excited to get out in front.
What has been the biggest hurdle to date?
(PG) Capacity has been the biggest hurdle to date. We have way more companies that meet our criteria and have the support for selection by our partners, more that we can currently handle, so we have to pass on some great companies. We only have slots for 50 startups in the US program accelerator. Funding is always a hurdle. We need more funding so we can hire more people and continue to increase our scale. Having more corporate partners is also very important, as they provide mentorship in specific areas of expertise, and we can always use more of that! Interested sponsors should reach out to our COO Kathryn Zavala – firstname.lastname@example.org.
MTI is the largest global medtech accelerator – what does that actually mean?
(PG) In simple terms, our portfolio has 422 portfolio companies to date. Silicon Valley Bank tracks life science accelerators and portfolios in the CipherBio website. We are the biggest and we are the most performant as well. 95% of our companies going back to our launch in 2013 are still active or have been acquired. Only 20 of 422 have shutdown. Our portfolio is also the most active in fundraising. In 2021 alone our portfolio closed 106 deals and over $1.6B in funding plus 10 acquisitions. There is a proven track record of significant value to being a part of our accelerator. MedTech Innovator = Value.
Some people may think Medtech Innovator is only for early stage startups but it is not. Please clarify.
(PG) It’s actually a 50 / 50 split between early-stage and mid-stage companies. Approximately half the companies we accept are pre-seed to series A, and the other half are in what we refer to as our showcase cohort. The showcase cohort is for those startups that are further along; generally, they are in late clinical or a commercial stage and/or they have raised their series B or later but they are still looking to be a part of our ecosystem and are seeking visibility, partnering, investment or other support.
Tell us about some of the Medtech Innovator success stories.
There are too many success stories to list, so I’ll highlight some of the recent ones from 2021, which was a huge year with amazing milestones across our portfolio – such as many FDA approvals, clinical studies started and completed, $1.6B in funding raised across 106 deals, and 11 acquisitions.
- Bardy Diagnostics with its wearable remote cardiac monitoring platform was acquired by Hillrom/Baxter for $375M upfront plus an earnout (August 2021)
- Medable, led by CEO Michelle Longmire, with its decentralized clinical trials platform, raised a $304 million Series D – its fourth round since 2020 – to give it a valuation of $2.1 billion (October 2021)
- Explorer Surgical led by CEO Jennifer Fried with its comprehensive digital and remote case support platform was acquired by Global Healthcare Exchange (terms undisclosed) (October 2021)
- Biolinq, led by CEO Rich Yang, with its novel wearable continuous glucose sensor raised a $100 Million Series B (November 2021)
- Tasso, led by CEO Ben Casavant, with its patient-centric blood collection systems and remote health diagnostic services, raised a $100 million series B (December 2021)
What is next on the agenda for MTI?
(PG) Applications are now being accepted through January 31, 2022. The next step is our Road Tour pitch events in March – May. Approximately 20% of applicants will be selected to advance to these coveted events. They’ll get to pitch and participate in partnering with strategics, investors, payers and providers. Deals happen as a result of the Road Tour. And, several of our Road Tour events are in partnership with conferences like MedTech Strategist Dublin in April and Device Talks Boston in May, and our companies are able to participate in those events as well to pitch and partner. In 2022, our Road Tour will mainly be in-person and starts in early March. I highly suggest applying before the January 31 deadline, as early applicants get a better chance of their regional preferences before those slots fill up.
More About Medtech Innovator
Applications for MedTech Innovator 2022 are now open, and Veranex highly recommends that interested parties apply early. In 2021, MedTech Innovator and its partners gave out over $1 million in cash prizes across all its cohorts. MedTech Innovator provides unparalleled access to strategics and investors, does not require equity and there is no application fee. To learn more and apply, visit https://medtechinnovator.org/. The deadline to apply is January 31, 2022.
More About Paul Grand
Paul Grand an investor and the founder and CEO of MedTech Innovator, the largest accelerator of medical technology in the world. The global nonprofit seeks to improve human health by accelerating the growth of startups and scaleups poised to transform healthcare.
Prior to MedTech Innovator, Paul was a serial entrepreneur starting companies in the biopharma, medtech, and tech industries. He became a venture capitalist in 2004, when he joined RCT Ventures, an early-stage life science investor where he served as Managing Director. At RCT, Paul primarily focused on medtech investments. He founded MedTech Innovator as a program within RCT Ventures in 2013 and left to run MedTech Innovator as a stand-alone company with RCT’s support in 2016.
Paul has interacted with thousands of medical technology startups as part of MedTech Innovator’s rigorous review process to identify the most promising early-stage companies in the world. 421 companies are now in MedTech Innovator’s portfolio, collectively bringing 90 products to market with a combined total of over $3.6B in follow-on funding.