By Donna M. Shelton
Special to TechJournal South
ATLANTA – For device-makers and investors in the medical device industry, it’s back to the basics: perseverence, innovation, and networking. This is according to attendees at the Southeastern Medical Device Association’s (SEMDA) third annual Investor Conference and Educational Conference, held Tuesday at the Georgia Aquarium in Atlanta.
Nearly 300 venture capitalists, angel investors, institutional researchers and medical device industry representatives attended the daylong SEMDA conference that featured presentations from 12 emerging medical device companies, educational sessions on financing and business strategies, and a panel made up of top medical device investors from across the country.
While investors are cautious in today’s depressed economy, they are hoping for the best according to Jeff Clark, managing general partner of Aurora Funds, an RTP-based venture capital firm that invests in early stage lifescience and information technology companies.
“New investments by venture capitalists are going to be off dramatically from 2008,” said Clark. “But, there is hope for device companies looking for funding. Perserverance is the name of the game.”
Themes echoed
Perseverence and a return to fundamentals were themes echoed throughout the event. “One key message for our industry is ‘do more with less,’” said John Edwards, CEO of Apeliotus Technologies Inc. and incoming SEMDA president.
“Perhaps the economic downturn is a good corrective that will cause us to focus on innovation and other fundamentals that drive value in medical devices.”
Conference attendees who participated in the CEO roundtable also indicated that the economic situation might provide a good opportunity for small and emerging companies looking for investment dollars.
Investors more comfortable with smaller firms
“Now that larger, public companies are having a tough time raising money on Wall Street, investors are more comfortable putting money into smaller companies,” said Omar Lattouf, MD, founder and principal of TransCardiac Therapeutics, an Atlanta-based developer of minimally invasive cardiac therapies.
“With the smaller companies, investors can monitor their investments better. They can actually ‘see’ who is coming in to work.”
Greater involvement with companies was further noted as an investment trend with angel investors in particular. Venture Capital Panel participant, Kathleen Lovell, chairman of Gainsville, Fla.-based Emergent Growth Fund, said that it is not business as usual for angel investors, who invest their own money in companies in their portfolio.
Sorting out of angel investors
“Right now there is a sorting out between serious and casual angel investors. We are getting more involved with companies in our portfolios.”
While investors remain cautious and note the need for discipline in today’s economy, the mood from device-makers looking for investment dollars at the conference was guardedly optimistic.
Attendees noted that industry events like SEMDA’s conference provide invaluable networking opportunities that ultimately lead to greater investment potential.
“If you are a medical device company CEO looking for funding, this is the place to be,” said Joe DeLapp, CEO of Visioneering, Inc., an Early-Stage Funding Panel member and past SEMDA Conference presentor.
“As a presentor at SEMDA’s 2008 conference, Visioneering got the visibility and credibility we needed to engage potential investors and increase our investment opportunities.
“You never know where your money will come from,” continued DeLapp. “Start-ups are in a demand phase, and the supply of cash is tight. An innovative idea, perseverance through the funding phase, and diligent networking are key in jump-starting a small company’s funding.”
Incoming SEMDA President John Edwards reiterated the importance of networking in today’s environment.
Stimulus package may make money available
“We are more collaborators than competitors,” Edwards said of the group of medical device CEOs and industry professionals that make up SEMDA’s membership. “When other companies in our region get funding – when there’s noise in the region – it strengthens my chances. It is a win-win situation.”
Money may also be available to device-makers from the stimulus package now being debated in Congress, according to Linda Alexander, founder and CEO of Alquest. In her keynote address, “The Impact of the Obama Administration on Medical Device Regulation,” Alexander noted the unprecedented opportunity for companies seeking funds. “Companies must be diligent and explore all of their funding options,” said Alexander.
“Right now it is important for medical device companies to forget the gloom and doom and get to work.”
Ultimately, it will be device-makers that stimulate funding in the medical device arena, according to Wes Kaupinen, a partner at Philadelphia-based Quaker BioVentures. “There will always be a need for newer, better, life-changing medical devices. It is up to the medical device companies and researchers to drive innovation, creativity, new technologies and industry-wide growth.”
For more information on SEMDA, or companies that participated in the conference, visit www.semda.net.
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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