When you are geeked about your medical device idea, it can be challenging to focus on the less-exciting parts of your start-up plan. Most start-up clients we work with initially think they just need a prototype, and they’re of course anxious to see their product come to life. But if you really want your medical device to take off, you must take into account the five essential elements of a successful business plan. These are the pieces you need to have in place before you attempt to secure funding. Remember, the savvy investor wants to decrease risk. The more complete your plan, the higher the potential investor’s comfort level. With fewer than 2% of projects presented getting funding, you need to prove you understand not only the medical device you are developing, but also the complexity of bringing your device to market. Here’s what your potential “angel” wants to see:
1) A great idea, a compelling audience … and a patent. Yes, your product is certainly the core of your plan. But what defines a successful product? It’s a product that is sold and used successfully by physicians, technicians, and patients. What defines “successful use”? Who is your product designed for … the doctor? Patients? Nursing staff? A laboratory purchasing agent? Or maybe your real target customer is a potential acquirer. It’s essential to understand your audience in order to develop a medical device that specifically meets their needs. And then, as soon as you are clear on enough device details, patent filing will protect your intellectual property, giving your potential investor peace of mind.
2) Market analysis. You’ve identified your audience, but how big is it, and how will you reach them and convince them to buy? Expert market analysis will answer this question. Is there a gap in the market your product will fill? Or will you be entering a crowded field? Is your product an improvement on existing devices or a game changer? REV.1 Engineering partners with market analysts who access Key Opinion Leaders from your target audience, find out what they really need, get feedback on your idea, and uncover both the appeal and the points of resistance to adopting a product like yours. This “Voice of the Customer” analysis is a compelling component of your funding appeal.
3) Financial analysis. From how to incorporate your new business to COGs to profit margins to reimbursement strategy, savvy financial specialists are critical to your overall success. You may have a slick new device idea, but if the pay system will never respond to it, no savvy investor will fund it … and no company will want to acquire it.
4) Regulatory analysis. A great product that can’t get regulatory approval means you’re the owner of an expensive new paperweight – your prototype. Understanding the shifting landscape of the regulatory framework and how your device fits into it is crucial. Proper medical device classification lays the groundwork for a successful regulatory approval process. When you are able to lay out a realistic path to regulatory approval, potential investors feel a much higher comfort level with your proposal. Again, for them it’s about risk, and the less risk in your plan, the more likely you are to get funding.
5) A great team. When you can show you’ve built a team of experts who are enthusiastically supporting your device, you are offering a complete package to an investor. When your potential “angel” sees that you not only have the written plans to bring your device to life, but a team that is ready to roll, you are far more likely to secure funding.
In our next blog, we’ll detail how REV.1 Engineering works with our long-established referral partner network to create the ideal team for your project. Our proprietary, highly effective program management system pulls together and prioritizes all the pieces for you. REV.1 works with you to create not just a successful prototype, but a successful business.
Of course, if you already have all of these pieces in place, we’re always happy to step in as your expert medical device R&D team. But if you are missing any of these key elements, our gap analysis will highlight what you need to prepare your device for funding, and you’ll have peace of mind knowing that all important aspects of your plan are coming together … 2x Faster than if you tried to build an in-house team. Give us a call at 951.696.3933, connect with us on LinkedIn, or send us an email at email@example.com, and let’s get your start-up started!