Behind the Buyout: Navigating Strategic Partnerships & M&As From Both Sides of the Table | LSI Europe '23

In this discussion, the panelists provide a comprehensive perspective from all sides of an acquisition, offering a roadmap for navigating the complexities of these business transactions.
Ken Nelson
Ken Nelson
Angel Investor & Partner, MedTech Advantage Fund
Nathan Harrington
Nathan Harrington
Managing Partner, Philips Ventures
Kevin Rocco
Kevin Rocco
VP, Bioinductive Technologies, CONMED Corporation
Yassaman Salas
Yassaman Salas
Partner, Global Head of Medical Device, Goldman Sachs
Biren Mehta
Biren Mehta
VP, Venture Investments, Johnson & Johnson



Ken Nelson  0:05  
And just wanted to thank Scott Pantel real quick and the team at LSI for giving us this opportunity. These are a lot of fun. And I've been coming here since 2019 When I pitched back in the party days, so fun to be with this group of panelists, I think. Let you guys maybe introduce yourself and then we'll get it kicked off. You want to start Nate? 

Nathan Harrington  0:26  
Sure. So briefly. My name is I'm Nate Harrington. I'm with Philips currently in Philips Ventures their corporate VC arm. I've been with Philips for 12 years, primarily in business development. So seeing the the acquisition side as well as partnering side and before Philips, it was nine years at Boston Scientific, or it's both operational and BD so seeing that aspect there and just want to echo happy to be here.

Kevin Rocco  0:55  
Hey, everybody, Kevin Rocco. I'm currently at Conmed, Consolidated Medical. I came in via a transaction last August I started as the founder and CEO of a company called Biorez. We developed a bio brace implant used in sports medicine procedures. Happy to be here.

Yassaman Salas  1:14  
Hi, I'm Yassaman Salas is a partner at Goldman Sachs. I run our medical device franchise, everything from m&a to capital raise, and maybe a fun fact across the panelists. I've sold the business to j&j, Conmed and Philips over the years. So that's my fun fact. Now, you're gonna have to have a fun fact.

Biren Mehta  1:33  
I have to decide if we like the businesses, you sold this now. 

Yassaman Salas  1:36  
Abiomed's a good one 

Biren Mehta  1:38  
Hi, everyone, Biren Mehta with Johnson and Johnson. I have been I'm with JJVC, which is our venture capital arm. It is I think one of the oldest, VC, corporate VCs, it's 50 years old this year. We're very active in equity, investing across med tech and farm, over 170 active investments in our portfolio. I am 15 years with j&j, I spent the first 14 doing corporate development, m&a. On the medtech side, I was responsible for about $10 billion of our medtech business. And just last year, I've moved into this role in JJVC, as a investor on the med tech side, and based in California and focused early on investments in the western half of the US.

Ken Nelson  2:28  
Great, so I'm going to ask a couple questions that I still don't really know the answers to. And maybe you can help enlighten us. Now, as a board member, we struggle with some of these questions. So the first one I'm going to throw out there is what when's the right time to engage a strategic investor? Is it early seed round? Is it Series A like? Are there certain dynamics that you feel are the right time? And maybe I'll start with either Biren or Nate? I don't know.

Nathan Harrington  2:59  
Sure, I would say, honestly start as early as possible. And by saying that, I'm not suggesting that you ask for money necessarily as early as possible. But I think a lot of these relationships just take place over lots of time. So I would say, make yourself aware, to who you think the strategics are, who might be interested, you knew at some point, it's a long conversation. We don't mind having initial conversations where someone's saying, I just want to introduce you to my company, I'm not looking for money. Those are always nice conversations. And I would say that sometimes you may not want to be meeting with the investor person per se, but you may be wanting to meet with someone in business development, because they're going to lead you through the right paths. I mean, if you really look at the either the VCR or m&a. I don't want to say we're more transactional, whereas BD is a longer term sort of relationship. If you do get us on the cap table, and if we happen to have a board seat, we will, we'll be with you for a long time. But I'd say first start talking with the BD folks find out where there's a match. And I'll pass it on

Biren Mehta  4:27  
Yeah, no, I fully agree. You doesn't hurt to start early. If you want to get into the mind of a strategic or at least J&J. We will invest at all different stages, but it depends on the target. So the things to think about are, if a, if a startup is in a core area of ours, we're more likely to invest earlier. And that's just because we know the space very well if it's a disruptive technology, we want to get ahead of it. So that's one, one factor. Another one might be the type of company if it's a 510K product. We are probably more likely to invest earlier because oftentimes companies will go from a round of investment all the way to FDA approval in one, one round. And so you know, sometimes you have to get an early or even before first in man on a 510 K, in order to be ready to kind of do something, you know, more strategic, like, like m&a. And then the last thing is, I would say another reason to go early to a strategic is, sometimes companies have an enabling technology. And it doesn't make sense for the startup to necessarily build out the entire solution, because many aspects of the solution are redundant to what's already out there. And if a strategic identifies that they might be interested to get involved with you very early in a way that allows for an early exit, if that's something that the startup is interested in, but can't figure that out. Unless, you know, we can understand the technology as early as possible.

Ken Nelson  5:55  
And so maybe I'll ask you this question beer, and I've been trying to sell Biren in companies for probably 10 years unsuccessfully. But a gauntlet like j&j, how do how does the startup navigate that? Do we? Should we start with the commercial leadership, get their interest, then talk to the corporate development people? And then talk to the VC arm or what's the, what's the preferred route as a startup to engage with the strategic

Biren Mehta  6:24  
Yeah, j&j is not complex at all, we're a very small organization of just a few people. No, it's really the opposite. And J&J can be very confusing, as is, you know, I think, all large strategics. For us, you can start anywhere, if you find someone in the in the operating company that's in your space, you can reach out to them typically there, it's good to reach out to the business development person, if you come to the venture capital side, they're going to quickly pull in the right people from the franchise from the business unit to evaluate an opportunity. So you can start anywhere, we're very well connected. I'll you know, an example is a meeting like this. For companies that reached out to me and I wasn't able to meet with, and hopefully this is true, because it applies to many people I might have responded to in this room, I always provide, you know, my contact info suggesting you know, if you think this is something that j&j should be interested in, please send me something non confidential, I want to take it back to the business. Because the worst thing I can do is ignore an opportunity, that would have been a great partnership for us to have. And so while we can't always meet with everyone, that's one way to make sure that all channels are open to kind of connecting with with us.

Kevin Rocco  7:39  
Biren, I wish we met three years ago. I was trying to raise money from strategics, and had had a great process with Johnson and Johnson, but couldn't quite get there. Any any advice for the people that keep? I'm just going to kind of steal this, if you don't mind. I'm just curious. Do you have any advice for companies that have meeting after meeting to then catalyze action?

Biren Mehta  8:04  
Yeah, we were talking about this just before? And can you lost your job as moderator? It seems? Yeah. So how do you push a strategic to make a decision because sometimes we do get into analysis paralysis. And you'll just continue to hear we have one more review one more review on more review. And really strategics can move quickly. Yass will know this, that when she comes to a strategic and says I'm running a process to sell the company, you guys need to send me a letter of intent, nonbinding within four to six weeks, we can do it. And that's for billions of dollars. So we have the ability to move quickly, we have the ability to get approvals quickly, when something is important. And we understand what those timelines are. And so you got to be careful how you use that though. Because if you're bluffing, or you know, you just artificially put some date in mind and you're not going to stick to it, and you have no intention, even be close to sticking to it, then that's not going to create a good kind of trusting relationship. So if you have real deadlines you're targeting doesn't have to be external deadlines. But you say, as a board, we want to we want to close this round. By the end of March. You know, as long as you communicate that early, continue to remind the strategic, if it's important enough for them, they can get it there. Now, if they don't get it there, it may not be important enough to them. And I think that's something startups have a hard time hearing, because look you guys have is the best thing in the world. But that can sometimes be the case.

Ken Nelson  9:35  
So from an investment bank standpoint, Yass. When do you like to engage companies? Because I'm sure at Goldman Sachs, you have tons of companies coming to you when they are wanting to have an IPO or they have a term sheet in hand. But that may be a little bit late in the game. when's the right time to engage in investment bank?

Yassaman Salas  9:56  
Yeah, it's a good question I'd say so those are the capital E and engagement moments in time. And so I bifurcate between lowercase e engagement, which I view is more relationship building and our opportunity to get to know the business that I would encourage early. Because the better we know the business, the better, we can weave it into our conversations with the various stakeholders at the places where where I spend my time on the large cap consolidator side. And then ultimately, when it is time for a potential capital raise in the public markets, or a potential sale, we're not now trying to get up to speed on the business, we've already immersed ourselves in the business, we've gotten to know you, we understand your objectives, what you're trying to do, and we can work much more efficiently that way. And every case is, is unique, but I would say early for us to get to know the company, but later often for a formal engagement.

Ken Nelson  10:49  
So I think a lot of startups myself included, if we're smaller, we often think a bank like Goldman Sachs isn't going to pay attention to us as a tiny startup. Is that true? Or what's the is there a certain deal size that interests you? Or? Or is that a incorrect perception of a startup?

Yassaman Salas  11:11  
Yeah, I would say that's incorrect. Of course, we so given the size of my franchise, I have to be on the IBO Metro. I mean, I don't have to be but those are kind of industry defining transactions, whether it was Hillrom, Varian, Abiomed, those are transactions that were honored to be a part of, and we need to spend time and make sure we're well positioned there. That said, so much of where we spend our time are on deals that never even get announced and our small private transactions, they just don't hit the headlines, so you don't see them. I'd say half, more than half of our business is less than billion dollar transactions across Goldman Sachs, not just healthcare, medtech. And so we spend a lot of time there. And frankly, what what we think we can bring to bear is when we do make that call, it means something because we don't, we don't bluff that I'm not in the business of bluffing. And when we make those calls, our clients know what it means. And they know that there is a time horizon, they have to make a move, this asset will come off the board. And so we use that to our advantage. But we use it of course, when it's appropriate.

Ken Nelson  12:16  
And I guess this is going to be a question both for you and for the strategic investors. If you see another bank starting to work with a startup, is the this FOMO factor that we talked about, this fear of missing out? Is that, is there truth to that? I mean, if if you're seeing, you know, one of your competitive banks, I won't name that any just

Yassaman Salas  12:40  
Those will not be named. Yeah. Well, I wouldn't say it's FOMO. But there's a pride that comes with running a leading franchise. And so we want to be on every transaction. Can I be on every transaction? No. But we want to be. And most importantly, we want to be associated with industry leading technology and companies, innovative companies. And so it's less about which of my, my competitors are everywhere all the time. So I have to assume that they're spending time with all of you. And that's great. So I'm not going to be swayed by that. Because there's not enough time in the day I focus more on the companies, and where we think we can actually be most valuable.

Ken Nelson  13:23  
So Kevin, you had a nice recent exit. What was your journey in terms of working with strategic investors?

Kevin Rocco  13:32  
Yeah, interesting question. So for me, I was raising $15 million. And looking for that lead. And I we had enthusiastic insiders. And so I was approaching strategics, about maybe anchoring, maybe leading, and it was actually through those conversations and building those relationships. And ultimately, the diligence process around a potential investment that has some competitive interest, I think catalyzed an acquisition. And so I think for the entrepreneurs in the room, it is important to go build the relationship with the potential acquirers. And I'm also bullish about going and trying to raise some money from them. And if they say, No, that's fine, you go raise money from other people keep more options open. Because if they start to finally dig into your business, and you have a great business, and you have a great technology, now maybe they at least know that, so that's kind of how it worked for us at least.

Ken Nelson  14:30  
And did you entertain having multiple strategics or when you had one that invested. Did you........

Kevin Rocco  14:39  
Interesting question. Yeah. So we we were we were looking for a five to $10 million check size from strategic I probably had something similar from insiders or a new venture investor could have taken that so I wasn't really personally pushing for multiple. I'm also on the board of a company called ray to medical Marc Zemel is in the audience somewhere. Great. Come Honey, I was talking to Marc earlier about he has two strategics on his company. And I think he very carefully and wisely brought multiple on board to kind of help keep keep options open. So I was not able to do that. And, you know, we decided to ultimately obviously sell the business to Conmed based on based on their interest. But if we hadn't gone with condiment there were other people interested. Interesting.

Ken Nelson  15:26  
And maybe I'll ask Nate, you this question. Are you all okay having other strategics? On the cap table? Do you prefer to be the only strategic on the cap table? I'm assuming that's the case? You'd prefer it to just be you. But what's your perspective on having more than one strategic on a cap table?

Nathan Harrington  15:51  
Sure. And I think maybe a preceding question to that, if you're a start up is, do you want a strategic on the cap table? Because I know there can be a lot of misperceptions on that. I think as far as having multiple, you're correct. I don't think we necessarily like to see a lot. But you work with what you got. And I currently serve on boards where I am not the only strategic. And the thing, which I think you realize is that when you have board directors from corporate VCs, you're dealing with someone as a corporate director. And so they don't bring their their hat saying j&j on their heads. They're thinking in terms of what how they're going to help the company. So you're mindful of that more from the cap table perspective. But I don't think it affects how you operate. I do think probably the first question is, can you get a strategic on your cap table? And do you want that? And I think it sort of begs the question that I'm sure others will have an opinion on, too, is what value do you get from that. And I think it's important for us to know how the corporate VC operates, what their partners look like their, what they frankly can do for you be, especially if they're going to be a director, I mean, the first responsibility is fiduciary to the company. Second, is thinking like a shareholder. And that's where you end the founders and the CEO should be well aligned. A distant third, at least for me, is Philips. So I think, understand what your options are out there for working with CVCs? How professionally run, are they? How seriously do they take venture investing? As I like to say, these are the gifts that keep on taking, you're going to be following on with additional rounds, and you want to make sure that you know, the people who are in your foxhole so to speak, and I do think you can get a lot out of it, too. We don't necessarily work closely with our venture portfolio companies. But that's probably good for both of us to have that distance. But when you need a sounding board, whether it's clinical expertise, regulatory expertise, or some other esoteric question, we can bring the expertise to bear quite a few times we've actually loaned equipment, to our portfolio companies when they're doing pre clinical stuff. So I do think there is value to having a CVC or strategic investment. I also think it's important not to tie yourself up. I think the days of rofers are long gone. And I don't think you're going to scare away other strategics from even looking at you. As long as you're not giving up any important rights. Pass it on to others for their thoughts.

Biren Mehta  18:59  
Yeah, I want to add to that, Nate. And look, I think the question of two strategics is an interesting one, because it probably seems like there's no downside, right? If I can get two strategics on my cap table, really, the obvious benefit of that is that down the road, when it's time to exit, hopefully you have a better chance of running a competitive bidding bidding process because you have two strategics that have been on the journey with you. There is a trade off though, and that is that strategics are also looking at the relationship in an investment. And as Nate pointed out, there's a lot a strategic can do for a startup in terms of opening up their expertise, you know, providing equipment if when it's needed, you know, collaborating with KOLs there's a lot of things they can do and if they're the only strategic in the in the company, they're gonna be more likely to do that, and to want to do more, because they would feel like if this is successful, they have, they're in a good position to acquire it. And I think when you take two strategics, on, you potentially put that at risk. And so there is some trade off there that the important question for the entrepreneur is, what are you looking for from a strategic and if it's really more financial in nature, probably having to strategics will be okay. But if it's much more collaborative, you should evaluate it more carefully.

Ken Nelson  20:34  
So how often do you do like, if you're investing in a company? Do you also do a co marketing agreement? Where you're going to help commercialize the product? Is that half the time? Is it 10 15% of the time? How often does that happen for you guys? Or do you try to steer away from that?

Nathan Harrington  20:53  
I'll tell you my my brutal opinion on that one. First of all, we're investing a lot of pre commercial companies. So the option to do that isn't necessarily on the table. And I actually, as an investor, prefer to separate the two. It's not to say I don't think that there shouldn't be partnerships, and investments. But when we're looking at that, I'm not trying to steer anything, I'm trying to work with the management team, and make sure that they're developing the best possible way. If the management team, and the business would like to get into some agreement. And you mentioned commercial, that's probably the most obvious have sort of, call it a try before you buy. But if it's much earlier on, I just think that you should separate the two. And frankly, you'll be obviously negotiating different agreements, but you'll be working with different people. If you're looking at an investment, you'll be working with us. If you're looking at a partnership, you'll be working with the BD person, and happy to facilitate that. But I do think it's important to not tie the two together. Just my opinion. And others. Yeah.

Biren Mehta  22:17  
And I think the broader question, and that is not so much co-marketing, because co-marketing, just one thing, right? There's so many other things, there's acquisition rights, and there can be joint development agreements, there's a lot of things you can do with a strategic. And I think taking a step back, the question for the entrepreneur, and the board has to be around matching the level of rights and partnership, you're gonna give a strategic with the commitment that the strategic is going to give you. And so it's hard to say, you know, what is acceptable and what's not acceptable. But you have to decide how many eggs to put in that basket with that strategic, because it does create, it could create a lot of dependency. And the risk that a startup would have is well, what if that strategic changes their mind, leadership changes, strategy changes, and they no longer see us the same way? where's that going to leave me as a company. And so if a strategic is not ready to put the level of commitment you're looking for, I would say when you look at the package, that you're providing the strategic be cognizant about how how much you're putting in that package, if they're your primary financial investor, because they put a large investment, if you're giving them acquisition rights, if you're giving them first right of distribution. I mean, if you start adding all these things up, you're putting your whole company in their hands, which may be okay, if they're doing something to show their seriousness in that relationship as well, which can be done, you know, through a variety of contractual things. So it's just, you know, any one thing is not just a co marketing agreement, just a joint development agreement, just a right of first negotiation, modest financial investment, any one of those things, no issue, start combining all of them. And you have to just be careful how much you're providing any one party.

Kevin Rocco  24:04  
I think it's important to just add quickly from the entrepreneurial side, for the people here raising money planning their next round, it's, it's obviously extremely validating, if you have Philips or Johnson & Johnson, do a meaningful percentage of your round, the vast majority of investors are followers, and they don't know the market and they don't know the industry. And so if you can say, Yeah, you know, JJVC took a deep dive on this, they engage their commercial team, and they're, they're actually putting their money into this. I think you can get a lot of investors that are on the fence to come in. And so if you're just concerned, your concern is how, oh god, how do I raise $5 million? Or how do I raise $10 million? You know, that can sometimes be the catalyst so just wanted to make that clear. And then I completely agree, make sure you don't give up too much. And I think for if you work with reputable companies that do this regularly, they know that that's no longer an option. So just be careful.

Ken Nelson  24:53  
So another route to an exit and sometimes the VCs don't see an IPO as In exit for various reasons, but a lot of us as entrepreneurs see that as an exit, when when is the right time for a company to start to consider? Do they go the IPO route? And you know, I think, historically we hear this number they need to be doing about 30 million is the minimum. Is that accurate? Or, you know, I'd love to get your take on that, Yass. 

Yassaman Salas  25:26  
Yeah. So there's a few questions wrapped in there. The first, in terms of when to be thinking about it. For me, the IPO route is a mindset. And so that mindset begins very early on, in my view, and what does that mean? What that means is you're building a business to to remain independent. And so I do think you think about the team that you build around you differently, when you're looking to go public, potentially, versus selling the business. I do think you think about building out a commercial team differently. So there's a lot of decisions you'll make along the way that will set you up for success and an IPO. Of course, there's all the governance and SOX and all this sort of compliance things that you'll need in place. But that's got to be a mindset. And it's got to be pretty early, I think, to set yourself up for that. In terms of the timing, there is no magic number, I had this conversation with a couple of people earlier today, is 30 a number it could be it's not a bad number, more is better. But actually what we would guide to and it's very case specific, but one sort of Northstar is predictability of revenue, which is so difficult to do when you don't have much of a track record. So in an ideal world, you have multiple quarters, where you've been commercializing, and you have KPIs that you're tracking, and you've been, you can at least see, okay, we thought we were gonna hire this many reps and generate this much revenue at this kind of a cost curve. How did we do, and the closer you get to your forecast, quarter after quarter, the more I would argue you're ready to go public. And so sometimes that is 30 million, but not necessarily. Sometimes it takes longer if it's capital business, it might be different than if it's a sort of tech enabled services business. But so there is no specific dollar value. But it has to be a confidence in that forecast. Because the worst case scenario and an IPO is to go out with a forecast that you miss immediately. And then it's really a death spiral. And we see this break, forget even early small companies, even the separations, we're working on a few different separations right now. And we give them the exact same guidance that forecasts that they come out with, they have to hit those numbers, they have to beat and raise those numbers out of the gates, and you've seen GE Healthcare be able to do that, over the last couple of quarters, it's easy to say very hard to do, and really hard to do when you're early in your commercialization. So longer is always better to stay private, even though I don't get paid to not take you public. So hopefully you take that from a good place.

Ken Nelson  27:57  
And so I know one of the areas that the strategics look for, for deal flow, they look at the accelerators, like like MedTech Innovator and some of the other bigger ones. And then they also come to events like this where people are doing pitches, where do you go as an investment bank to find deals, or they just said there's or they're just so many coming into you that you're not proactively coming to events like this that often to proactively find stuff

Yassaman Salas  28:27  
Wasn't in the pre guided questions, but you have gone off the script.

Ken Nelson  28:31  
Sorry, I'm going off script a little. 

Yassaman Salas  28:33  
Where do we look for companies? So I'll say what I've said privately to a few of you today, which is we do a pretty poor job of, I specifically us as a firm coming to conferences, getting to know companies earlier. And so partly we do rely on former transactions, board members investors that connect us. But that's not that's not a strategy. And so part of what we're trying to do, frankly, is come to more events like this and spend more time early with companies. 

Ken Nelson  29:06  
Yeah, that's helpful. Biren, Nate, Biren, and you're pretty tied in with MedTech Innovator as well. Are there other events or other accelerators that you you'd recommend that some of the people consider? Or are there other avenues that you'd look at to find interesting companies that that people may not be thinking about?

Biren Mehta  29:28  
You know, in the in the spaces that we play, there's always industry meetings, and if you're in that space, you would be at those meetings and so would our broader team. So, the venture capital person may not be there, but the business will be there and the business development person will be there. And so what we talked about earlier was you can get into a large strategic from many different angles. So I think we, for the spaces we play in, I think we probably do a good job of staying connected to the startups and then yes, there are the accelerators. For very early stage stuff, which are fantastic to be a part of, and these pitch competitions, I think they provide so much good visibility to strategic. So, you know, highly recommended, I think where we get stuck sometimes in strategics, is in adjacencies, we don't have large teams of people that are becoming experts in adjacencies. And sometimes a strategic will decide that, hey, we want to be in this new space that we don't plan today. And we have not spent the years to build the relationships, develop the expertise, and yet we're doing large transactions. And so that's where we could do a better job of, you know, staying close to the new technology in adjacent spaces. And I think that's why, you know, when I'm in a meeting like this, I don't only look for startups that are in our core business areas, but I also consider where we're likely going to go in adjacencies, and try to meet with those companies as well. 

Nathan Harrington  31:00  
One thing else I would add, if you're trying to get industry strategics attention is to, in some ways go to their customers. So if you have KOLs, on your boards, they're usually in touch with most of the usual suspects. And to the degree that you make it clear that you're open with that. We listened to the same KOLs, too. So aside from the usual places where you meet people, I would say we go to our advisors to and say, Are you aware of any companies to the degree that you can speak about them, that you think we should be aware of, and that can be pretty effective as well.

Kevin Rocco  31:44  
I was just going to add that the challenge for the startup is that especially the CEO, you You're obviously raising the round, you're playing in the financing game, but you also need to execute and operate whatever industry you're in. So making a big impact at those industry specific meetings. If you're in orthopedics, the American Academy of Orthopedic Surgery, those those kind of flagship meetings, if you can get a lot of booth traffic, you can get to kind of be the belle of the ball. That's, that's what strategics pay attention to. And on behalf of Conmed, I think condiment does a very good job of watching the market and taking meetings and seeing what's active. But if you're the startup, you got to make sure you show up to these things and make a presence.

Nathan Harrington  32:24  
I will say though, sometimes it's tough if you're a startup and you don't have any commercial product. So keep up keep your options open. For sure.

Ken Nelson  32:36  
The market has changed a bit, I think the the fundraising environment is different right now. We still see a ton of money going into the venture funds, but you don't see an equal amount going into startups right now, I'd love to get your all's take on, on the trends that are happening right now in health care funding? That's the first question and I'm gonna follow that up with how can startups in the room better prepare themselves for their discussions with you as the raising money? So first, let's talk about trends. And then how can the companies better prepare themselves?

Yassaman Salas  33:13  
Maybe I'll start on the trends, I'd say a lot of what we're seeing across the venture community and just investing communities because of some of the IPOs that haven't gone well. And because of the need to have their own portfolio, privately held portfolio companies for more capital, that's the majority of where capital is going. So you're seeing more capital raises that are not bringing any new investors, but passing the hat around for the current investor base. And so that's a large portion of where capital is going right now. My hope and expectation is that with some of the tech IPOs that are happening, obviously outside of healthcare and medtech, but these a lot of these investors player, obviously, across industries, and so seeing some success in tech, seeing some success with biotech, whether it's through m&a or IPOs. I do think that's going to help the emotions of investors and hopefully taking their hands out of their pockets and investing in new places.

Nathan Harrington  34:13  
Yeah, I would say there's definitely a backward effect, whether it's exits IPOs, or just trying to get an improved valuation. This is a challenging time. And I think it's, for me, it's been the year of of the bridge, and a lot of insiders hunkering down and deciding to get the company either through to a better time, or a clear value inflection point. And so I know that's something that numerous companies that I'm dealing with with are thinking about, which, again, goes back to know who your investors are corporate or otherwise, and making sure are that they have have deep enough pockets for where you need to be. And that they're there to see you through these times that we're going through right now.

Kevin Rocco  35:12  
I've seen a lot of investment at the very early stage, the friends and family, a lot of surgeons, physicians investing, they want to be investing in startups. And then it really kind of drops off a cliff, in my opinion, until you get out to almost the people that write eight figure checks. So if you're a startup, you got to really triangulate backwards to what do what will you need to do to bridge that gap, so that you are attracting a potential growth stage investor or someone that that maybe is willing to go a little bit earlier on you. But you do need a business that can take, you know, 15 or $20 million. Today, I think these funds are typically getting bigger and fewer, at least in medtech. So if anybody's out there, you know, I'm encouraging people to consider that middle. And hopefully, we can see more funds writing single digit millions into rounds.

Ken Nelson  36:05  
You know, I think one of the things that we don't necessarily talk about is what people often leave out in there presentations, that that either annoys you guys, or frustrates you that you just see it over and over again. So getting back to that, how do they how do people prepare themselves? In a better way to to have those discussions with you? Are there any common themes that you see that people tend to not include certain things,

Biren Mehta  36:34  
I would say, doesn't annoy me when it's not there. But I think if if I was an entrepreneur, I think it's worthwhile to do your homework on the strategic you're going to meet with and understand how your solution fits into their portfolio, not just about product gap, but also positioning competitive landscape, you know, if I'm j&j, and you know, that Medtronic is working on something that is going to leapfrog what I have, and you come to me and you say, Hey, I'm sure you're aware of Medtronic is working on this, my understanding is you guys don't have that, you know, we've developed something that can help you bridge that gap, you know, coming with that thoughtfulness will go a long way in getting the strategics attention. So it doesn't annoy me when it's not there. But I think it's just a good, good practice.

Nathan Harrington  37:22  
I can only echo that. I think it's also just as problematic if you reach out to Philips and say, I have a great ophthalmology solution before realizing we're not in ophthalmology. 

Biren Mehta  37:35  
We are, 

Nathan Harrington  37:37  
I should send them your way.

Biren Mehta  37:38  
Maybe it's an adjacency you want to get into. So

Nathan Harrington  37:43  
It could be and maybe just come out and say that may if you're thinking of exploring, but no, I would. But I think more to the point that Biren brings up this just know your audience and know what what matters to them. And I think always folk focus on the unmet need and pain point that you're addressing. If we're reasonably well connected to our business and in the markets, then we should hopefully have a decent sense of of that too. And that's going to resonate. Versus sometimes, I mean, this is cliched, but you find technologies looking for a problem to solve. Make sure that you're identifying the problems that resonate with us. And I think it's an even bonus, if you've done the homework enough to know the competitive dynamic. Other than that, I most of the times present presenting where you are with clarity and where you're trying to go and what you think it's gonna take to get there. Make your asks very clear.

Biren Mehta  39:00  
I have seen the accelerators do a good job of honing presentations. So many of you have been through those, those programs. I think there that's another benefit of going through them.

Ken Nelson  39:09  
I think one of the best exercises, at least for me personally, was with MedTech Innovator, they make you do like a five minute or seven minute pitch. But they also make you do a one minute pitch first. And it's really difficult to get a pitch down to one minute. But the process was so educating for me and I don't know, Kevin, if you had a similar experience with accelerators, but love to get your take.

Kevin Rocco  39:34  
I did not do an accelerator and incubator or venture studio, any of the many options that are out there today. I think they are good ideas for people wanting to do that. I am thankful that the silver lining of COVID is that you don't have to travel somewhere to give a three minute or a one minute pitch because that used to be a thing before COVID. But yes, I think that look the quality of pitches at LSI are are I think very good on average and I think that people here probably don't need to hear these things. But if you can encourage people that maybe haven't yet made it or can afford to participate in LSI, you know, pit try to pay it back, if you're the entrepreneur.

Ken Nelson  40:11  
Yeah, that I think as you see these these programs evolve in terms of funding events. And I'm not just saying that because we're here, I think this is probably the premier medtech fundraising event that's out there. And there's really not a lot of competing events that are this big with this quality of people just getting the crew that's on stage here. It's great to see that investment banks are coming to these events now. Because I don't think typically in the past you you would come and there's a number of investment banks here, which is great.

Yassaman Salas  40:42  
I would say Scott and the LSI team are very persistent.

Ken Nelson  40:48  
But no, this was great. appreciate everybody getting on the panel and look forward to the rest of the next couple of days. Thank you

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