Device Companies Renew Interest in Startups

August 26, 2017
At a recent medtech conference, and discussed by WSJ, it was noted that the big device companies (e.g., J&J, Medtronic, Boston Scientific) are looking to startups to help bolster their innovation and product pipelines (see abstract and link below). Maybe it was a slow news day, but this is hardly a recent trend. Yes, the relatively recent drop in VC funding and capital market pinch in general has made startups more amenable to courtship by established med device companies, but the long development process for devices, including the sluggish FDA approval process, even under 510(k), has long driven the big medtech players to look toward independent entrepreneurs for sources of innovation that have already proven themselves in proof of concept, preclinicals or more. Moreover, the big guys have also for some time been a bit more aggressive in their interests, as evidenced by their willingness to pursue startups at earlier and earlier stages (note, this means they are LESS interested in those companies who have done five, six or more dog-and-pony shows of “emerging” medical technologies or IN3-like yawn-fests). The J&Js and Medtronics of the world have become adroit at recognizing the value of innovations at very early stages — including for companies only a few months old. The medtech market really is that competitive, and to think otherwise is to miss out badly on highly promising innovations.

(See also the Medtech Startups Database: __________________________________ Large Medical Device Companies Show interest in Startups… According to the Wall Street Journal, start-up companies building new devices for doctors face trouble at both ends of the spectrum these days, with a dearth of early-stage funding on one end and a practically non-existent IPO market on the other.

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