Investing Early — Has the Bar Moved in Early-Stage VC, and How Should CEOs React? | LSI USA '25

Amy Salzhauer  0:05  
Hi everybody. I'm Amy Salzhauer from Good Growth Capital. I am your moderator, and I'm a little bit of a tough moderator. I'm warning you in advance, but I also want to reassure you. I know people have a lot of questions, and I promise you that at 405 we will stop talking on our own and and give time for questions. So 20 minutes per questions at the end, what I want to ask the panel to do first is to introduce yourselves, really, in terms of what you invest in. So I've asked the panel not to pitch their fund or give you an in depth understanding of the fund, but really just put in perspective what your invest, what your Fund invests in. Eric, do you want to start? And all in 

Eric Heinz  0:46  
Sure. Happy to start. So hello. My name is Eric Heinz, managing partner of Heinz ventures, which is a pre seed, seed stage Medtech fund focused in the Midwest.

Owen Willis  0:57  
Think Awesome. Hey everyone. I'm Owen Willis, founder and general partner of Opal Ventures, and we are backing the next generation of healthcare infrastructure. We do pre seed Health Tech and Medtech with a data focus. And we invest all over the world.

Shai Policker  1:13  
Hi everyone. Shai policar, operating from Israel, and New Jersey is edge medical ventures. We invest only in medical devices, med tech, pre seed, seed series a range

Amy Salzhauer  1:31  
and Good Growth Capital. We do med devices, therapeutics and some diagnostics. And we invest pre seed through Series B. Follow on. Now, one thing that that we should we didn't mention, is the size of the fund and the size of the check, but that, as a founder, is something you should always be thinking about. So if you are raising $5 million don't, don't pitch a $3 billion fund. I think we're all on the smaller size of funds, so we're all writing checks that are about a half million to five to $10 million is that right? 

Owen Willis  2:08  
And we'll go even lower so we do 250, to 400

Amy Salzhauer  2:11  
okay? So my first question is, is the assumption of this panel true? Has the bar moved in early VC investing and have Are there changes at your fund in the last year or two in terms of how you're thinking about early stage? Who would like to start? Look at Shai. He looks

Shai Policker  2:32  
happy to start. I think the bar had moved. I mean, I've been in Medtech, in the Medtech industry, for big portion of the last 25 years. I think the main changes that I see is, as I'm sure no entrepreneur have noticed, there is some dry out of funding from VCs on the early stage, on the early side. On the other hand, I do see strategics coming in earlier than ever. And it is, I think this is even a trend that is that have not completed its course in my in my opinion. So for, I think for our group, we are kind of a rare species right now of early stage investors, which means that there is a lot of opportunity in that, in that space, but it definitely tough times for entrepreneurs. I think

Amy Salzhauer  3:25  
I feel like it's a mixed bag, because there was a lot of, is it mean to say, Done, dumb capital in the market. There were a lot of followers, a lot of people who were just excited by med tech without actually understanding it, or had become really excited about life sciences in general during the pandemic. And I think a lot of those investors have exited the market. And so now you see the dedicated investors have stayed in. I don't know what what you guys think, Well,

Owen Willis  3:56  
I think, I think part of what I've seen is that seed rounds have actually gotten more competitive. So when we're investing a pre seed, what we've noticed is that a lot of founders that who could have gone out right away and raised the seed round now have to do pre seed, right? They just need to show a little bit more. They have a little bit of more of an idea of, especially on kind of like, what is the commercial opportunity that they're going after versus before. And so what that means is that you know, already in a tight market, it's even tighter because you're competing against founders who previously would have been able to go out and raise more capital more quickly. And so it's, I think, at the end of the day, it's about making sure that you know you're finding the right investors, but also understanding that, given the dynamics of where things are today, you might want to also look at alternative sources of capital, such as Angel such as family offices as well.

Eric Heinz  4:50  
Yeah, to build up upon that, as venture capital has moved into more of a growth equity phase of the company's life cycle, you've seen a lot more angel investors, family offices. Coming in, as well as emerging fund managers, so smaller micro funds that typically will have operators that are experienced in the industry. I think the benefit there is that they're able to co invest with the Angel Network and really bring that med tech experience to help out with sourcing due diligence and ultimately value creation as the investment is developed

Amy Salzhauer  5:21  
so Shai, 

Shai Policker  5:22  
yeah, just maybe one comment, although, you know, I'll be very happy to agree that everybody else is dumb, except those that are left over. I'm not sure that this is actually so much the case. I mean, definitely there was some kind of hot air in the especially in the digital health space. But we have to recognize how difficult early stage investment in Medtech is, and how easy it is to be wrong, even if you are, you know you have the information, you have the experience. The cycle is so long and the market has so much time to change and kind of prove you wrong that it is truly difficult, and a lot of that has to do with luck, because of the of the effect of time. The only way we found how to handle this is to try to, you know, think as much as we can about the exit point from day one, and work with the buyers of our technologies. As we start, we think without that, we will be as dumb as the other, as the others as well. So I

Owen Willis  6:24  
mean, I think even from an investing perspective, one of the things that we do is we actually try to identify who the lead of the seed round is going to be even like, or could be, even before we put a check in, right? So we want to start building that relationship with those investors earlier. Because I think that is, that is the big risk is you're you're putting money into a company, and they get to a point where they just can't raise the next round of capital. Running out of money, obviously, is the existential risk for businesses, and anything that you can do to help de risk that as a firm is going to be beneficial to the portfolio.

Amy Salzhauer  6:58  
So we have a similar strategy to Shai. We have some of our portfolio CEOs in the room, and they can tell you that we press on the exit and who's who are likely acquirers before we actually even make the investment. So that's one thing for a founder in the room. I think you hear that fairly consistently across funds. Actually, for us, we're looking for, for portfolio companies we think can exit well in five to eight years in any market they mature into. So we're really focused on something we think transforms their particular field. But even then, we're looking for the acquire, if you are a founder. Therefore make it easy for us, and it shows something to each of us. I think everybody's going to agree. If you come to the pitch and say, I've already thought about who's you know, what the competition is, who's likely to acquire me? I've maybe started talking to them. If somebody is a likely acquirer of your technology, they actually do want to meet with you, even if it's too early, they want to see that you're building the company, but they likely will still want to meet with you so and that brings me to my next question, Shai set us up, which is, have you changed how you're working with portfolio companies, either towards their exits or in terms of how much market traction you think they're They need to have in order to engineer that.

Shai Policker  8:24  
Well, we are traditionally. I mean, if we can call an eight year cycle tradition an early stage investor, so we couldn't really move in terms of the range. I mean, I know a lot of investors have moved to be a later stage fund. I mean, this is part of the kind of changes that that you see. We don't think we would be as successful if we move to a later stage, so I wouldn't say much of change, but we are trying, and that's my recommendation to founders, is exactly, exactly what you said is you have to be a learning machine, and you have to know as much as you can about your market. And sometimes, yeah, you know your direct competitors, but you have to understand also around your core points, you know, who is playing there, and something you know, the the ones that will eventually beat you could be something that is completely different than your product. It you just change the market. Could change, you know, just under your feet so, so for founders is just, you know, know, as much as you can talk to the when we and again, when we say strategics to everyone, the from the the marketing people, the R and D people, as much as you can get exposure to do that. And for us, we just, we started by investing in entrepreneurs like everybody else. And we can, we still do that, but the majority of what we will do, right, you know, in the last, let's say, five years, is we will attach an. Needs from strategics to talented entrepreneurs, and this also goes to those that are coming and pitching to us. In many cases, we would like the entrepreneurs, but not their idea. So we'll try to convince them to kind of work on a different problem. Sometimes this is just taking their own technology and just shifting it to a different indication. Sometimes it's just taking their skill set and moving this to a completely different field. We actually found that this is, you know, we found some great entrepreneurs that just working on the wrong problem. So that's, that's kind of how we how we work these days.

Owen Willis  10:39  
Yeah, I would say I've almost taken the opposite approach to you, which is, which is good for a panel, but we have gotten even more focused on the founder and the founder profile. You know, we really want to see founders who have not only the subject matter expertise, but a tremendous amount of resilience and grit in going out and building what they're building. What they're building. So we actually like to spend two or three cycles of building with our founders before we put a check in. And genuinely, the thing that we are looking for is for them to make a mistake. We want to see when things go wrong. We want to understand what works and what doesn't. We want to understand the rate of learning, because that gives us a really good sense of how the founder will be as a as a receiver of capital from us and kind of getting to that next stage of building. The other thing on our end is we've actually gone even earlier. So initially we had a fairly broad range where we were going to be putting checks out, and what we've realized is that, you know, we can get into deals much much earlier, at much lower valuations, which gives us a lot more optionality with the founder, and aligns our incentives with the founder in terms of what they're building, what the potential exit outcomes look like. And so I think you know, what you'll learn from this panel is that there are many flavors of venture capital, many different ways to invest. And part of your job as a founder is just understanding what are, what are kind of like, the mindsets and philosophies of these funds that you're wanting to work with, and finding one that is aligned, you know, from both obviously a values perspective, but also an approach perspective, with what you want to build.

Eric Heinz  12:20  
I have a question, are there any pilots in the room? Yeah, so critical phases of flight take off and landing, and same thing holds true in companies. So I've seen more value destruction take place in the early days of the company's life, as well as in the exit stage and with background of me and my team in upstream marketing and product management, as well as in M and A and corporate development, those are two areas that we spend a lot of attention on in the companies that we invested because we want to make sure that we're able to bring value to the table in those areas that are our specialty, where we really feel that a lot of risks can be mitigated and bring a best outcome for everybody, everybody

Amy Salzhauer  13:00  
I want to. So I was a founder 11 times, so I have full sympathy for for the founders in the room, and and, and I can remember being so frustrated when people would say, oh, you know, find a VC that you're aligned with. And it was so hard to figure out who that person was. How do you do that? What are you looking for from the founders in terms of that?

Owen Willis  13:27  
Yeah. I mean, honestly, for us, it's we like to spend time with founders. We like to be involved and understanding, kind of, what are the key decisions that they're making at the moment when we're thinking about investing. We like, we really like, candidness about what is not working right? That, that, for me, is really important. I think broadly though, my recommendation, you know, I think, like the websites for VC firms, can be inaccurate in term, because a lot of it is actually marketing for their investors about what it is that they want to present out to the world. And so I think what's more valuable is actually spending time with the individual investors and then also understanding how does their investment process actually work, right? Because as a founder, what you're running with VCs is effectively a sales process, right? And so similar to how you would run an enterprise sales motion, you need to understand how decisions actually get made, who the real decision makers are in a firm. Because I think the place where a lot of founders get stuck is that you you might have a really good relationship with a junior partner at a firm, but they have no decision making authority in actuality, right? They're bringing deals to the table. They are pounding the pavement, but they are not, at the end of the day, the person who decides what they put checks into or not. And so it's really figuring out who are the stakeholders that you need to be engaged with, and building that relationship with to get those over the finish line.

Amy Salzhauer  14:57  
Anyone else? 

Eric Heinz  14:57  
Yeah, I would say that things I look for and have found. There are. Number one is this somebody that I'm going to enjoy working with over 10 plus years, and he'd see it's all about relationships and having that good match, and also alignment and values and how you see the company, where's What's your vision, what's the culture you're trying to build in the company, and how do we, how do we have alignment and moving that forward? The other thing is really being candid about what you know and don't know. So, you know, I love doing extensive due diligence. Take pride in that work, and I could really tell if somebody is answering a question in a way where they're kind of BS ing it. And so one of the things I really appreciate is that candor and transparency that, yeah, that's a great question. And by the way, I'm going to update my VDR for the next investor, because that was a good idea that you recommended that we take a deeper dive on.

Amy Salzhauer  15:48  
And I'm going to add that you can so venture capital is actually pretty personal. You're you're really pitching specific partners, so you can look and see what they've been interested in, what they've invested in. I think it's also important to look and you can look in crunch, base or pitch book, see how long ago did they raise their fund, right if they're, if they're at the end of the investment cycle for their fund, which is usually three years right then, and you're pitching a really early stage deal that's going to take the full 10 years to exit. It's not the right fund for you at that moment, in all likelihood, actually for me at my fund, I think so. Sam Schofield, our Senior Associate for Life Sciences, is in the audience. We have a really senior team of advisors and operating partners, et cetera. But if Sam says, No, you're done. So I do think that you want to really look at the power and power in Doni. So I think sometimes people don't appreciate that, that, you know, they think, Well, I'm just talking to the associate rebel, but the associate is the gatekeeper. There's no going through if you're not getting through with the with the associate. So, you know, the other part, I think that is important for people to understand, as you were saying, is what's actually happening at the fund, right? And another piece is, if you look at the investments that that fund has made, if they have a lot of investments that are belly up, then that's going to affect how the partners are thinking about your exit, even if it's a great company, right? You want to look and see, did they, did they raise a fund, you know, or do they, are they having trouble raising a fund? Are the partners staying with the fund? Has there been a lot of turnover with the fund? There's, there's a lot that you can understand. And then just the piece that I was saying at the beginning, which is, don't try to put, you know, $2 million investment opportunity out to NEA. They'll be very polite to you, because they're polite people, but they can't make that investment. Imagine if you had a multi billion dollar fund and you were trying to deploy it in half million, 2 million, 5 million, even $10 million checks would be impossible to manage. So that's my two cents on it. I want to go back to the the question about what has changed, because clearly the exit market has changed for the moment, although we're doing early stage right. So are you worried about the IPO market and choosing not to do deals where you think it's going to be an IPO, or you're thinking that's going to change by the time these things are exiting?

Eric Heinz  18:31  
I'd say that that's so far out that it really is going to change. We know it's going to change. Markets are going to change, and I think that also in Medtech, the majority of the investments are going to exit through M and A so being able to have that expectation going in, that's my expectation is based on the history in this sector.

Shai Policker  18:52  
Yeah, my view is the same. I think even when the IPO window was fully open, you were talking about companies with, I know, $20 million of revenues, more or less, to be, to be successful and be serious, and honestly, as an early stage fund, if we get to that point, we have failed already, because it's been, you know, we missed an M A window that we should have taken before.

Owen Willis  19:17  
Yeah. I mean, I think for our fund, what we're looking at is, you know, we are targeting exits between 250 and $500 million right? That is our you know, that's a home run for us. I think with the IPO market, it is warming up. It's starting to see early signs of life. There is there is something there. But that's part of the reason why we invest so early is to give us as much time between now and that heating up.

Shai Policker  19:43  
Yeah, that's, I mean, again, everything that talking about the changes, I mean, in the past, PMA products were something that you, you know you can touch as an early stage investor, because it's going to take, you're going to be so much diluted until you get in. This is not true today. You can invest early in a PMA product and do an exit way before they before they even start the pivotal trial. And that happens more and more recently. So the you know this high risk, high reward is becoming, I think, open again for investors like us.

Amy Salzhauer  20:18  
Yeah, we joke amongst ourselves about the portfolio. Could see the CEOs who come in and say it's absolutely it's an innovation. Nobody's ever done it before, but there are multiple, 510, K predicates. Doesn't fit. All right, yes, I promise you 20 minutes for questions I'm going to ask if people can come to the microphone and to keep you from pitching, if you have a question, please just say your question. Don't say the name of your company. That's that's not what we're about here. We're happy to take you afterwards. If nobody's nobody has a question, is that right? All right, the microphones right there. I think they're trying to record it. So if you can use the microphone, that would be great.

Audience Question  21:01  
As investors how hungry are serious to acquire control of the company, control of the EP, control of the business decisions. And from experience, I've seen people taking control and destroying company, so it's been a painful experience. So as well said, before I look 10 times before I figure out, not only to take your check, but can I get along with this guy

Amy Salzhauer  21:29  
who wants to take that?

Eric Heinz  21:30  
Yes, I would say that for a pre seed investor, one of the things to think about is that any kind of terms that I'm going to put into a deal are going to end up propagating in every financing round, and so it doesn't behoove me to have preferences and control rights and things that are, you know, like doing what you say they're going to do, because it's going to at the end of the day, hurt me as the early stage investor. Curious about your thoughts?

Owen Willis  21:56  
Yeah. I mean, we try to invest. Most of our investments are actually on safe notes. So we actually try to be as founder founder friendly as possible on the terms but, you know, one of the things that I will say in terms of who we are backing, you know, we are backing a founder. We're not backing a CEO, right? So, you know, for us, we're really focused on the person and their ability to go out and execute on the business that they're gonna execute on. And at some point, you know, it that person might realize that they are not the right person to lead the company on that next stage. And, you know, ideally, we're backing somebody who has the drive to build an incredible business and the humility to understand when it's the right time to step away. 

Amy Salzhauer  22:43  
That's fair. 

Owen Willis  22:44  
I would agree. 

Audience Question 2  22:45  
Amy, you mentioned strategics. So when you're talking to early stage founders, how many strategics Are you wanting them to be speaking to? And what traction can they be showing you? Aside from just, trust me, I've spoken to a couple. What are you actually looking for in terms of those conversations. 

Amy Salzhauer  23:02  
All right, who wants to take it? 

Eric Heinz  23:04  
Yeah, well, thing, let's see. The thing is to have key relationships with strategics, where you get to know both people on their business development team as well as people on their commercial side of things. So product managers are great because they are on the front line. They understand the needs that the Field Sales Team is seeing and that the customers are experiencing, and they can really push things upwards to strategy and to BD and to their management to help make sure that you're on the radar for those companies. So that's one group that I'd recommend looking into.

Shai Policker  23:35  
Yeah. I mean, I would want to speak to everyone that you have spoken to and actually get their sense. See how much you understood what they told you and and, you know, check our own thoughts with them. So as many as possible is the right is the right word, and usually at least two that are really competitive in that in that field, is very important.

Owen Willis  24:02  
I think, in addition to obviously building that relationship with a potential acquire, one of the valuable things is understanding your place in the ecosystem right, and understanding the type of company that you are wanting to build, right, what you where you fit into their ecosystem. Is it that has a huge impact on your exit potential and the type of exit that you have, and the type of capital then you would want to raise for that business? But I'd also say one of the things that people tend to miss is they forget to actually talk to their customer, right? And so you spend a lot of time looking at the exit, thinking about the exit. But when you talk to the people at these strategics, what they actually care about is, what is the commercial viability of this thing that you're building for the most part. And so in addition to those strategic relationships, it's also understanding, how are you fitting into the ecosystem? How are you fitting into the kind of the incentive stack of the different. Groups that might be buying or using this product, and just having a really good sense of, like, what is the potential, actual commercial pathway for this thing that you're building that's beneficial to the investors, it's also really beneficial to building that relationship with the strategics.

Shai Policker  25:14  
Yeah, I just want to just maybe one, one additional comment. I mean, speaking to strategic is very important, and gathering as much as information. It doesn't mean that if everyone says, Yeah, this is this product doesn't have a place in the market, that we will believe them. We can be contrarian. And I you know, there are some great examples of products that, you know it will be hard to think how they will become a success, and they have. So sometimes you can, at least, when you're talking to the VC, they need to have the conviction that they understand it and they have enough information to make up their own mind. And that, I think, is the is the real is the real

Eric Heinz  25:54  
essence, I think looking for technology scouts as well at these companies, because they're much more forward thinking and thinking five to 10 years out, versus a lot of the other folks that may be much more quarter to quarter and not thinking about the big picture. So that's a good point that you raised, that it's not, it's all about who you speak to as well, and what their what their role in the company.

Shai Policker  26:14  
Yeah, I mean, I was, we had a conversation today about watchmen of Boston, Scientific I'm sure you all know this, if somebody would to tell the truth, if somebody would pitch to me, I don't know 20 years ago if I was in a VC, a metal implant into the heart for prevention. You know, think about that, and nothing like that ever exists. You have to have a lot of kind of imagination and vision to invest in that and look at that market today. So, I mean, you need the VC to be to understand that and to get the sense. Sometimes you need to talk to 100 to get the one that gets it, and then they will do

Amy Salzhauer  26:53  
it. You know, I'll just add, I know it can sound intimidating. We're saying to how, you know, how do you reach the strategics? There's another way to the strategic switches through KOLs. So you know, if you are, let's say you're Boston Scientific, you are going to actually know who are the cardiologists who are likely to do that implant. And if you can convince them, then they're going to talk, to be talking back and forth pretty readily with people who are, I mean, that's, that's part of the job, right? Of the entire sales force of those strategics is to understand what these guys want next, or women want next. We say that we're looking on to invest in things that, when we talk to the clinicians, they want it yesterday. And we have, some devices where the clinicians are saying, Please, can you, can you get it to me faster? I really need that thing. That's the thing we're going to invest in. I promised you you were next 

Audience Question 3  27:53  
Yeah, curious, how do you define traction for a what's a seed stage Medtech company with a lengthy regulatory pathway in front of it and then tagged on that is, what value do you place on pilot studies as a form of traction?

Amy Salzhauer  28:11  
Good question. I see Eric already,

Eric Heinz  28:13  
yeah. Well, I love pilot studies because it means you're out in the field and you're learning about the pain point that the customer is facing and the patient's facing, and that you've got a technology that might be able to help out with that. So that's a great demonstration of traction. The other thing would be, you know, from an IP perspective, making sure you have a good IP strategy you want you have licenses that are established with third parties. I've seen situations where somebody doesn't even have an option to the IP that they're trying to license from a university, and it's like, look, this is a non starter for me. Let's go back, get the option in place, and then have another conversation. So those are some from IP perspective, anyways, but there's many, many others.

Shai Policker  28:52  
Yeah. I mean, I agree with every word. And you know, there's so many things that we can learn as investors from your pilot study, even something like enrollment rate, if, if you are trying to enroll, I don't know, 1015, patients, and it takes you two years to do that. It tells you something about the unmet need. Maybe it's not that big as you think. We can talk to you, over to the physician, and get really, you know, I use that, and that's how I felt, that what need, what needs to be improve. And then immediately they will tell you, after the trial, will can I use it? And then, okay, how would you charge for it? I mean, it becomes more real in the eyes of the physician when they use it. Sometimes physicians have, don't have that much of an imagination, so they actually need to use the product to tell you what they think. So,

Eric Heinz  29:37  
yeah, yeah. The thing is, the usability that you get out of a study like that, because you can have the brightest engineers in the world developing this in the lab, but until it's actually in the real world and the environment with the nurses and staff and everybody that has to touch it, you don't know. And so the pilot study is a great place to be able to demonstrate usability and learn from from

Shai Policker  29:57  
that experience. Yeah. Sorry. One of the. Comment. It also tells you a lot about the founder, because almost without any without an exception, there will be some things, bad things that will come out of the pilot, some problems. So it's very interesting for us to see how the team responds to that, how quickly they fix it. Are they trying to hide it, or are they kind of focusing on those problems and how they can make, you know, maybe eliminate out of those lemons. So this is, this is really an eye opener for us. It's, it's, this is really our sweet spot for later stage investments, for

Owen Willis  30:33  
sure, I would say too that, you know, one of, one of the things to think about with, you know, what is traction? What is the purpose of traction for an investor? It's really to be able to underwrite risk, right? When you, contrary to, like what you see on Twitter, VCs are actually pretty risk averse, right? Because our job is to say no, our job is to say no to most things, so that we can say yes to a very small number of things. And so what traction does is it helps us underwrite the different risks that this business might face during the early and middle stages of building the company, and then the potential outcomes, right? So when you think about the traction, I think it's it's really about like, what are the things that you need to prove out to an investor to get them really, really, really excited about this opportunity. It's going to look different and a little different. And a little different for every single company. And from my end, the thing that I look at, and I care about the most when it comes to these sorts of things is actually retention, right? So, like, if you're doing a study or doing a pilot, it's actually kind of the retention of patients or users to understand. Like, is this something that is solving a meaningful hair on fire problem, and or is it the right form factor to actually provide that treatment?

Amy Salzhauer  31:46  
So when I was you took the word out of my mouth, it's risk, and when I was a founder and now as an investor, I think both of those enterprises are all about risk mitigation. And if you have something that is a risk that there's no way to mitigate, mitigate every other risk. So for example, if there's let's think about the sources of risk, right? You could have technological risk, you can have competitive risk, execution risk, financial risk, that you're going to not be able to raise or you're going to run out of money. So if you have a lot of technical risk, and you can mitigate the execution risk by showing me you have an amazing team that's done this before then, and you you're able to raise enough money, and you have a fantastic regulatory consultant who's, you know, who's pretty clear about the pathway, and can show you that there really is a predicate, or it's going to be a PMA, but it's going to be okay, or whatever that is, mitigate the risk for me, and then you can still have that area of risk and it will be okay, right? That's, again, where your pilot or talking or or traction, even if it's verbal traction, from doctors who are willing to say, This is my thing, show me that you know that your surgical device doesn't really change the pathway through the operating room, or it does. Or if I look at and I say, Gosh, you're going to have to train surgeons, and you come back and say, Oh yeah, I guess that's true. That's one thing. If you say, Yep. And this is what the what the plan for that is. And so that was how it trickles down into my sales force. That's a completely different conversation. And

Owen Willis  33:34  
I think one thing to keep in mind with all of that, especially as a founder, early on, everything about the business is a chicken and egg problem, right? You're kind of having to do everything everywhere, all at once, and it's really difficult. And just That's something to acknowledge that just building a company is really, really, really difficult when you're going from zero to one. And it's a reason why most companies don't make it, and it's a reason why many, many people you know aren't cut out to be founders, right? And so I think just one of the things that that I want to really highlight is, you know what, when you're building, it's not linear in the way that, you know sometimes can be presented, but as you're going through and doing that, de risking, you're de risking little pieces of each thing all at once, because it's just moving the needle forward, moving the needle forward. And at a certain point, if you have the resilience and you're the right founder, building the right thing, you are going to find the right people to bring around the table. This

Amy Salzhauer  34:40  
is something that hasn't changed, and I don't think we'll change in any market environment, there are no more questions. Is that right? There are requests, no no, no more questions. All right, well, we'll keep talking if there's no more questions. So I did have another question for you all, unless you have a question that you wanted me to ask. Ask, and I haven't asked it, and if you didn't. So you know, one thing that I think happens in, particularly in med tech, is there are not that many funds and and I think that's especially challenging for founders right now. I definitely see that something has changed in the market. Is that there is, there are more fantastic startups than there actually is funding, I think if you calculate that out, so we mentioned family offices, and I think family offices are investing. How what? What do you think founders should do? How do they reach a family office? How do they reach a non traditional source of funding. How do they stand out to you as a fantastic investment opportunity? I'm going to put one thing forward, which is that, since all of the funds are inundated by founders, if you make it easy for us like come on, give me a data room that we can really dive into so that you know from the start we can see whether we're interested or not. What do you think they should do to stand out for you so they get your check or get somebody else's check that they haven't thought of?

Eric Heinz  36:10  
So one of the things is, as a VC fund, I want to build strong relationships with institutions. So I've made it very much a focus of mine to build six or seven relationships with those institutions. So if you are an affiliate, like through their Angel Network, or through their clinical staff, or some way where there's a tie, that's one great way to be able to be getting attention from me, because I have that trusting relationship. And by the way, it's a, you know, we want to have value going both ways. So you mean a university, University or a medical center. And so that's a very important thing to think about, is look at those relationships that the VC fund and the fund managers have, because those carry a lot of weight.

Owen Willis  36:53  
So two quick things. So first, in terms of what's being presented, I think that there's a big opportunity right now. And there have been many other panels that have talked a lot about AI and kind of what, what it can bring to the table. I think the piece behind that is data right? And so if you have some sort of unique access to data collection, data storage that enables you to create a moat that's really compelling to investors, not just traditional Medtech investors, but even the generalist funds that I work with are looking for founders that have a data edge. And hardware is a way to do that. And so it's really, I think part of the positioning is being really clear about what is the why now for building this and the why now for you know, it potentially doing really, really well on the market, and that could be one path, right? The other thing is, in terms of reaching us, this is, I think, a little bit controversial, at least with folks on the stage, but we really want founders who are able to network their way into us, right? Yeah, different, I know, but, but I think for me, like, when I'm, like, working with a founder and, like, kind of watching them build, they're going to have to be able to do that, right? That is a that is a key skill that they're going to have to be able to do. I'm a pretty easy person to network into,

Amy Salzhauer  38:21  
and so I'm going to stop you, yeah, because I think that's important point. Actually for us, you can fill in a form on their website, but we only have one minute. Yeah, that's right. Pass it over and Shai

Shai Policker  38:30  
comment, just a practical comment for the crowd about your what you said. So two, other than the family offices that you mentioned, two important sources of very, very early stage funding. One is grants. So definitely. I mean, in Israel, there is a very structured program for those. But in the US as well, you can find state and federal money. The other things are the venture arms of hospitals. If you find hospitals that have a developed venture arm, go and find the Kol first. Don't approach the venture arm, because they will, you know, they will have no interest, find the Kol, convince them, but that what you're doing is interesting. And together with them, go to the venture you can get some, some important funding early stage. So these are, like good, practical advice.

Amy Salzhauer  39:15  
We have 40 seconds still. You're on

Audience Question 4  39:17  
On one of the things I'll learn as MBAs are risk follows return, and yet in this ecosystem, a lot of times those early stage investors, be they early stage VCs, family offices, high net worth individuals, if a company needs to continue to raise a lot of money, are really hurt by the later stage VCs, because the liquidation preferences are going up, people want to do participating preferred. There's a lot of things that pile on that protect the capital of the later stage people. So what do we do to preserve this ecosystem, to keep people that are coming in and investing at the early stage, be they high net worth individuals, family offices, or folks like you coming out with good returns?

Amy Salzhauer  39:59  
I. Yeah, who wants to answer that? First? I was going to start talking about side letters, but

Eric Heinz  40:06  
I was going to say that part of the thing that I'm focused on is building relationships with the next investors, because then they see the value that I'm bringing to the table in the pre seed and seed stage. Because I want to put up these deals to be attractive to good growth, 

Amy Salzhauer  40:21  
there are some funds that nobody will work with. 

Eric Heinz  40:23  
So that reputation and that that relationship across funds is very important.

Owen Willis  40:29  
So for us, we've set up our fund structure in a way that you know, as we work with our founders, we let them know upfront that we are going to look to start taking our money off the table at Series B and Series C as a way of preserving returns for our LPs, and we do that through the founder, right? We're not going behind the founder to do that. This is through the founder. And if we have a good relationship with them, they will. They can broker that with the lead investors of those follow on rounds, especially as a small check in the fund, right? It's not a negative signal necessarily, to do that. 

Amy Salzhauer  41:01  
All right, it's my responsibility to say thank you so much for coming. And if you have additional Shai, I cut you up over you can answer that question. If you have additional questions, please get Bri.