Light at the End of the Tunnel in Medtech Financing | LSI Europe '24

 Nick Pachuda 00:05
 Nick. I'm Nick Pachuda, and we're going to have a session today on the light at the end of the tunnel in med tech investing. There is light at the end of the tunnel, we promise. So we put together an amazing panel of highly experienced investors and operators to give a diverse set of insights and also some practical knowledge that you can take away. So I'm Nick Pachuda. I was a surgeon for 10 years, with over 20 years in the industry. I've had three successful exits and worked for 10 years at Johnson & Johnson, leading external innovation in med tech. In the last four years, I've been a general partner at Mountain State Capital. We're going on to our second fund, a $100 million seed stage fund, and I'm also an operator at a clinical stage biotech called Peplogics, creating new antibiotics for medical device infections. Let me turn it over. We'll just go down the line for some quick introductions. Hi.
 Sean Morris 00:55
 Hi everybody. Sean Morris, with Cultivation Capital. I also run a company called Amplify Vascular. I'm based in St. Louis, Missouri. I started my career holding the bag, selling medical devices to image-guided physicians doing treatment under X-ray guidance, whether it's vascular surgeons, interventional radiologists, or cardiologists. I made my way through the chain and ended up operating a division at AngioDynamics. Then I started a company building a vena stent that Boston Scientific acquired, and I did a stroke company. So I have the operational side, and then on the investor side, with Cultivation Capital, again, a fund for life sciences focusing on vascular medical devices. So it's a pleasure to be here. I look forward to this panel.
 Eman Namati 01:48
 Hi folks. My name is Eman Namati. I'm the CEO of SpectraWAVE, an intravascular imaging company based out of Boston. My background is in medical imaging. I did a PhD in X-ray CT for pulmonary applications and then jumped into a startup. I switched from academia to industry to help lead the technical division of a startup that was being founded in Boston for the oncology space using optical imaging technologies. About four and a half years ago, I joined SpectraWAVE to take it from concept to commercialization, which we kicked off about six months ago. I'm happy to say that I just closed, with our incredible team, a $50 million Series B financing led actually by Janus Henderson, so it's great to be here. Thank you.
 Anita Watkins 02:36
 Great. Good afternoon. I'm Anita Watkins, the managing director of Rex Health Ventures. I'm the non-operator up here, but I get to operate a fund that serves as the corporate arm for UNC Health Care. We're a 12-year-old fund. We invest all across the healthcare spectrum and certainly have seen the rough times and the good times, and I look forward to talking about the good times.
 Omid Akhavan 02:59
 Hey guys, I'm Omid Akhavan, with Anthro Ventures. We're a family office based out of D.C. We mostly do clinical through commercial stage med tech. My background is as a bioengineer by training, with an early career in clinical research and management consulting in strategy and business development for Becton Dickinson. I moved into investing about eight to nine years ago.
 Nick Pachuda 03:21
 Great. So obviously, we have a fantastic panel with a ton of investment and operational experience. With that, let's kick it off and start with something maybe not so simple: the current macro environment. I'll start with you, Omid. Given the current macro situation, what are your thoughts on it? What kind of deals are getting done, and what kind of risk are people actually taking right now?
 Omid Akhavan 03:45
 Yes, you know, what I've seen over the last year—I think we had a panel back in Dana Point where we were talking about the challenges in med tech and the harsh realities. This last year has been pretty hard for early-stage med tech. The macro environment is a little bit confusing. The market is very volatile. We hit new highs, then the market dropped, and with the elections coming, I think people are wary to deploy capital. A lot of folks are just holding cash, collecting their 5% on T-bills, and waiting to see what happens in the market. But we are still seeing deals get done. Eman is a perfect example. There are a bunch of other LSI alumni, and I think the market is opening back up. Investors, I would say, over the last two years have been very cautious, but they all raised funds in 2020, 2021, and 2022. Ultimately, they have to deploy that capital on behalf of their LPs, and so I'm seeing the checkbooks really opening up.
 Anita Watkins 04:48
 I'd add to that, we're about to close on three deals, and we didn't do a net new deal last year, so that's a big change. We certainly did follow-ons. One of the things that we're hearing from co-investors, especially since we play a big role in helping pool a syndicate together for companies, especially when we have a lot of conviction around that we have clinical buy-in. One of the things I'm hearing from funds is they are so heavy on overvalued companies that still haven't hit their valuation inflection points. They want as safe a deal as possible to round out their portfolio. They're looking for really investor-friendly terms and commercial stage opportunities. One of the ways that I'm seeing deals get done is that the terms are really changing. I look at the three we're about to close: there's liquidation preferences, there's warrants, and there's big drops in valuations. I think that's the key market indicator right now: to get a deal done, you've got to be willing to look at it. I don't like the phrase "flat is the new up," but in a lot of ways, it is something that has to be considered to keep the company going.
 Sean Morris 05:58
 Yeah, we found that to be the case as well. It definitely has warmed up in the last probably six months, I would say. When we first kicked off our Series B fundraise about 12 plus months ago, it was a really tough period. I think you have to give some concessions, like you said, Anita, but ultimately, getting the right syndication is key. As long as you can get the right people to the table, then I think you can have a good path forward, even if you have to make some concessions on valuation.
 Nick Pachuda 06:30
 Eman, what was the trigger that went from trying to raise capital to actually being able to get it across the finish line?
 Eman Namati 06:39
 Yeah, I think, you know, it's interesting. The process itself was not typical as far as meeting with really good quality investors and sharing the vision. One of the things for us was that we had just transitioned into a commercial entity, so there was a certain amount of de-risking that had happened with the business. Now the question is, are we going to get traction in the market? One of the things I would just say, generally, to anyone out there raising money, is don't take your eye off the core business. You need to keep pushing that forward. Ultimately, at every stage as we brought in new investors to the table, it was the positivity around how well the business was doing that drove them into the investment round itself. For us, I think ultimately, just to pull it all together, it was having a strategic lead the financing, which I think a lot of the venture groups, although they were quite excited about what we were doing, brought us another level of validation for the company today and also its future valuation.
 Nick Pachuda 07:53
 Just a question for Anita and Omid. You brought up creative terms and being strategic about what you see with preferences and warrants. Are you sort of looking for that as a fund? Are you having CEOs come in and be proactive and say, "Hey, this is what we're looking to do," or are they just trying to reach the finish line? Where is that more from, from your side?
 Anita Watkins 08:18
 Actually, it's a little bit of both. One of the deals, it's an $80 million deal, will close in the next couple of weeks. It was CEO-driven, and they said, "Oh, I've got all this interest. No one's going to get across the finish line. They all keep coming back and saying it's a valuation issue. Let's tack on a preference, let's tack on some warrants to incentivize." I think we filled out the syndicate in about four weeks after that.
 Sean Morris 08:45
 I think sometimes, if you're a CEO, you're reluctant to do that because you feel weak, or maybe your board isn't aligned that way. To go to an investor and say, "What else can we do to make it more attractive?" You always take pride in wanting to fund your company, or maybe not use a placement agent to help you fund the company, or to go to your board to say, "You know," because you feel maybe it's a point of weakness. But you're really just trying to be creative and make it a win-win situation. So I was just really curious, Omid, what do you think about how people approach you to say that? I know you're creative anyways.
 Omid Akhavan 09:18
 So I think it's about balance. It's always a balancing act as an investor because you obviously want the best deal, but you want management to also be incentivized and properly incentivized. As an investor, your job is to balance ensuring that whoever's sticking around with the company—let's say there are some legacy co-founders that have left and gone on to do other things—you're a lot less worried about their interests than you are about the management team. I would say one, it's about ownership, right? And kind of where the company is in the cycle. As an investor, you generally want to maximize ownership for the least amount of dollars. Depending on where you are in the life cycle, if it's all been great and you're continuing to progress and you had great clinical data and you're moving to commercialization, you'll have an easier time raising. If you've had trouble and you have to now re-engineer your device, you're in a different position. As an investor, it's about managing risk. The risk is: is your management going to stick around after you make this investment and actually drive? If they go from owning 15% to owning 2%, as I have going on in one of my portfolio companies, it's how do you defend their interests so that they stick around and are motivated? In terms of optimizing for risk-adjusted return, sometimes you have to add a liquidation preference. There are always standard terms, like a 1x liquidation preference. Investors get their money back if you sell for a very low value, but generally that goes away once you clear the hurdle of dollars invested. For the audience, participation means that you not only get your money back, but you also get your percentage ownership in the company after that from the proceeds. You kind of get one more turn or two more turns or three more turns on your money. I know that was very common post-financial crisis in 2008, but it started to go away in 2015, and I think liquidation participation features are coming back just because investors have to manage downside risk and optimize for return.
 Nick Pachuda 11:37
 I don't think anybody's going through the standard process anymore. You've got different types of investors leaning in. Everybody I've talked to this week is doing a note, and then they'll do their priced round when firms get a little bit better. There are folks taking venture debt, etc. I wanted to maybe touch on the topic of the different types of investors. Given this macro environment, we know there's high net worth and family offices, early venture, growth capital, private equity, and strategics. Who's leaning in right now, and who's sort of leaning out? I'll just turn it over to whoever wants to jump in on that one.
 Eman Namati 12:13
 Yeah, sure. I think they all are. It's a very wild, wild west sort of thing. As a CEO, you have to put yourself out there and talk to everybody. Some people might say, "Well, if I have a strategic on board, then it caps my upside." I've had personal success with bringing a strategic into my cap table. With Amplify Vascular, I had both Philips and Volcano, which got acquired by Philips, and then Boston Scientific. At the end of the day, there was a hot minute of competition, which was really exciting. Boston Scientific was the entity that took us out, and it was a good return for investors. I think it's a level of comfort that paves the way for who might acquire you. There are, of course, dangers if they say, "Well, we don't like you anymore," and then everybody's wondering why you smell like a dead fish. So I think strategic investments are very interesting. More and more corporates are doing their own venture funds and looking at either white space opportunities or investing in areas where they want to look into and eventually build portfolio strategy around. I also see family offices really coming into play a lot more because they're getting more organized and more structured. They run a better diligence process, and they're really interesting to work with because they're sort of all over the board and looking to make an impact.
 Sean Morris 13:57
 Yeah, I would echo that. Through our process, we took on a pretty significant amount of convertible note dollars, and then culminated in the final Series B. That came from individuals, family offices, employees, and then existing investors in some cases. Ultimately, it was a very typical VC round, although it was led by a strategic and included blue-chip venture groups in the final Series B. To the extent that you can speak to every single person that will listen to your story, even if it doesn't lead to any dollars today, you never know. In 12 months, 24 months, or 48 months, those relationships will come back in a positive way.
 Anita Watkins 14:55
 I definitely feel like it is a lean-in moment. I feel like everybody's looking. I compared to 2022 and early 2023, where I had investors saying, "Look, we're just pencils down right now," especially some of the funds like mine, other health system funds. There are like 30-something of us now, so as a sector, we've grown quite a bit over the last 10 years or so. There was a lot of concern with balance sheets, and folks were just penciled down. I'm not seeing that now. I feel like it is definitely a lean-in moment, and people are looking for deals. As you pointed out, there's a lot of money that needs to be put to work, and they're just looking for the right terms.
 Nick Pachuda 15:43
 Yeah, I've certainly seen strategics that either have internal strategic ventures that they're deploying because they have a different risk tolerance. They see the valuations where they are and want to be able to lock in companies that they're looking to acquire or commercialize down the road. I've also seen strategics that didn't traditionally have venture create a pathway to do that, and that's been really interesting to me, especially in the last six months. There's definitely a difference in the market from Dana Point in the spring till now. I've seen it; you can feel it. You can see the deals being announced, a lot of strategic activity. A lot of people are teeing up how they're going to deploy that capital and making decisions about when the inflection point is coming. When we talk about who's able to raise capital easier than others, we have to consider CEOs. There are serial entrepreneurs, which are obviously less risky to invest in, and then there are first-time CEOs. There are a lot of first-time CEOs here. We need to give less advice, maybe to people that have done it two or three times and had exits, and more to first-time CEOs, especially when you're thinking about investor readiness. Every CEO here is trying to raise money for the most part. What are some thoughts we could impart to first-time CEOs about being investor-ready?
 Omid Akhavan 16:59
 Eman, I'll jump in. In any investor process, you need to convince them that the problem you're solving is important and that you have a solution that has the potential to generate a return and serve the market. Anything that you can do to reduce friction in that process is key. Have your data room ready, have your budget ready, have your financial projections ready, and have different scenarios ready. Have reference calls. I did diligence on a deal and called three of the company-provided KOLs. One of them said, "Yeah, you know, it's interesting, but I wouldn't use it." Just make sure that your references are solid. Obviously, every investor takes those conversations with a grain of salt, but you want to hear that KOLs are jazzed up about what you're doing. They're excited about it; they feel it's transformative. If it's not, you instantly lose an investor. Those are some things, but I don't know if you have other thoughts.
 Anita Watkins 18:10
 A couple of things I would add: surround yourself with board members who've been there and done that—independent board members who can make those introductions. Also consider, especially if you're early stage, a fractional CFO who's raised money 10 to 15 times. They've done the roadshow; they know what they're doing. Just be careful with your terms in the market. Make sure you've tried your pitch out on a lot of people. You can usually spot a first-time CEO if they're using buzzwords like AI or chatbots.
 Eman Namati 18:48
 It's more around the investment itself. If I hear one more person pitch to me, "Just for you, potential customer, we're going to open up our Series A from two years ago," it's the same terms, and it means they actually aren't able to generate the revenue they need. Just be honest with what's going on with your company. If you're having trouble with customer traction, you could really use a corporate, especially a health system fund, to help you understand that sales strategy. Really know who the investor is, and don't try to sugarcoat what's going on within the company.
 Omid Akhavan 19:29
 I think that's so important. Ultimately, people are investing in you and your leadership team. Just be genuine and have high integrity. Be honest about where you are today. Ideally, you have some good track record, whether it's being a serial entrepreneur or even within the ecosystem of that one startup. If you can say, "We said we were going to do this three years ago, and we did it. We said we were going to do this two years ago, and we did it. We had some issues, and we resolved them," I think that builds a lot of confidence. Just be very genuine, and I think that resonates strongly with investors.
 Sean Morris 20:07
 I'll just add that everybody was a first-time CEO once. I didn't know what a cap table was or what preferred equity was when I started my company in 2009 in St. Louis. Everybody was complaining about having a board meeting in St. Louis, where there are cows. All I knew was that I had to figure it out. I ended up working with a guy at Baird Venture Partners who I had never heard of before, and I dragged him on an overnight flight to Germany to close a half-million-dollar deal with an orthopedic doctor. That was part of my syndication. Getting him going, and then everybody touched on it. You have to be really honest because you don't want to lose credibility. These are really hard things to do to run a company, so everybody knows it. If you can identify your headwinds and have some ideas on how to address them, that's obviously a really needed thing. People make the difference all around, so align yourself with really good people who will go to battle with you and incentivize them, and you're off to the races.
 Nick Pachuda 21:20
 Yeah, speaking of the races, when I think about investment, you can either invest in the jockey or the horse. You've got to have a good jockey first, then you get to the horse. To me, I'm looking for a CEO who's got passion, conviction, and is coachable. They will listen and know their blind spots or be willing to hear what their blind spots are and then address that. That is so critical. You hear so many pitches of, "I've got it covered. I have a slide on that. It's in my appendix. I have every answer." There's no chance you have every answer. If you're a first-time CEO, pressure test your story with board members, independent folks, and find out what those blind spots are early and address them. You're not going to be perfect; it's okay to learn and evolve. This brings up a sticky situation that I've been seeing lately: sticking to your story versus pivoting based on the feedback you've heard. Given times where it's hard to raise money, I see a lot of people pivoting their story. It was this indication six months ago, but now we're over here. What are your thoughts about perseverance and sticking to the story versus taking that input? When is the right time to pivot your company? Companies fail because of a lack of pivoting at the right time. Given the macro environment right now and how hard it is to raise money, what's the importance of sticking to the story versus pivoting?
 Eman Namati 22:45
 I think it depends on why you're pivoting. If it's because of a buzzword or something that's percolating in the community, and you think, "Okay, I'm going to get the money if I say I have AI or crypto or something silly," versus if you really understand your business. You've learned something unique by putting it into practice, and you've decided, "You know what? This is actually a better use case or a better business proposition," and you can explain that. If you can explain it in the context of a pitch, it's fantastic. People want to see that you're learning, that you're open, and that this is not a move-forward type situation where, under all costs, you're just going to plow forward even though you know it's not quite the right direction.
 Anita Watkins 23:35
 I agree. If it's clinically valid, especially if there's reimbursement, tell the story around it. We started in this indication, but there's no room in that DRG, so we're pivoting to this indication. Otherwise, you're not going to be able to sell. What I don't want to see are five pivots over the course of a couple of years. We've seen that recently, and I do think that speaks to inexperience. It's important to really understand your indication and not say, "If you have a chief medical officer that's like, 'No, we're staying in this space. I know it. Trust me,' the physicians do not understand the business side of this world." At least I'm sure there are some that do, but certainly, the ones that are practicing do not. So listen to the business side. If there's not reimbursement, if there's not a pathway to actually sell your device, you need to look elsewhere.
 Nick Pachuda 24:41
 You know, I always think about the startup world having to have a three-legged stool: a big clinical problem, a technical solution that's differentiated and amazing, and then a business side—the ability to be investable, to commercialize, and to be able to exit. You have to balance those three. You don't go too far clinical; you don't go too far technical. You make sure that you've thought about the business considerations early. I always say it's never too early to talk to strategics. It's never too early to think about reimbursement. That's come up a few times. I want to go back to a point that you made earlier, Anita, about the role of the chair and the role of the executive chair. Let's be really practical about it. When you're making a first-time pitch to investor X, what is the role of the CEO versus a board member chair or executive chair? I'll start with you.
 Anita Watkins 25:36
 The CEO needs to do the pitch first and foremost. You've got to believe that the CEO knows what they're doing. Really, it's the board member and others with expertise who are there to make the introductions and to make that soft handoff. This is a social practice. It is who you know and who you can get in front of, so utilize them for that soft handoff. But first and foremost, the CEO has got to be the one that knows it and can do the pitch. Going back to your point earlier about knowing what you don't know, I had a company pitch recently. The CEO, a first-time CEO, was in the final stages of negotiating a term sheet ready to sign in a couple of days. I said, "So when do you think you'll close?" They said, "Oh, four weeks." You won't even have deal docs done in four weeks. Just know what you don't know. Say, "You know what? I'm hoping to close as soon as possible. I recognize we've got quite a few things we've got to get in place." That will give us a lot more confidence that you're not just puffing your way through this.
 Nick Pachuda 27:01
 How do you perceive what a board member gives in terms of the presentation versus the CEO? What's the immediate implication of that?
 Omid Akhavan 27:10
 You're going to have a new CEO.
 Nick Pachuda 27:13
 Yeah, be careful. They can be useful, but you want to make sure the CEO can carry the story. Does anyone else want to comment on the role of board members?
 Eman Namati 27:23
 I think just to add, being able to find at least one of them that you can be vulnerable with, but they're not going to judge you. You should be able to go and say, "Hey, I have this issue." I have a dashboard that I try to use in my board meetings where I say, "Here's what's going well, here's what's not going great, and here's what keeps me up at night." You have to have credibility to discuss with your board member or members about things that are keeping you awake at night and make sure that they're not judging you based on the fact they're asking questions or asking for support. That also extends into the community as well.
 Nick Pachuda 28:01
 Yeah, that's one of the things I tell CEOs. There are conversations that you can have with board members, some you know better than others. There are conversations that you can have with your leadership team, and then there are conversations you don't want to have with either one. Find yourself some advisors that are independent, have no financial interest in your company, and just honestly want to give you good feedback. You can have those tricky conversations, especially at really pivotal times in the company, to make sure you're not talking to people that have different incentives than yourself. It's really important to get independent feedback. Let's go back to what board members can sometimes do for you: access. The relationships that the board has are typically broader than many of the CEOs. There are warm introductions, and then there are cold calls. We talked about this as we were prepping. If you get that email from someone—maybe you know them, maybe you don't—but you've got a long email with a lot of items in it and an attachment with a teaser or a non-disclosure, versus three sentences from someone you know, what is the perception of that? I want to hear from everybody about the perception of the cold call email with the teaser versus three sentences from somebody you know. Let's go right down the line.
 Sean Morris 29:16
 Huge impact. Having that warm handoff as opposed to coming out of the blue. A lot of these independent board members will talk about them because they don't have the conflict. They're really brought in for that reason, I think, to be the mentor and to be the safe repository of your concerns, and also to work the board and soft-sell some of the ideas and concepts you might have. I forgot the question; I'm just going off on a tangent.
 Nick Pachuda 29:45
 The difference between warm intros versus cold emails and that part too.
 Eman Namati 29:50
 Yeah, I think it's a night-and-day difference. Ultimately, you just want to get in front of someone to give them your short pitch. I don't even think you want to send them a teaser, honestly. There are too many nuances there. You want to get in front of them. You want them to meet you and resonate with a relationship. There's no question that getting a warm introduction is key. For us, one of the things we did was list all the different venture groups we wanted to get in front of. We sent that list out to all of our board members and a few close advisors and asked them to rank how close of a relationship they had with each individual person. We ended up picking the one that we felt had the strongest relationship.
 Anita Watkins 30:39
 Ditto. I have a call with one of my CEOs in a couple of hours. We're doing just that. We're going through—they're raising a round, and he wants to talk while I'm here so we can make sure to get those introductions to folks. Don't send the email you described; we won't read it.
 Omid Akhavan 31:01
 If you are going to send an email, make it three bullet points. Don't send me a page-long email about the market. I can see it in the deck. I don't need that. The key highlights are: "Hey, we're raising; here are the terms. We have $2.5 million of $5 million. There's a lead investor, or you're interested in participating." Whatever the highlight is of what you're trying to get from that interaction. If the email doesn't work, look at LinkedIn. Look at who your mutual connections are. The med tech community is very small, so you're probably one degree of separation from anyone that you want to get to. To Eman's point, if you have a relationship with that person you're connected with, say, "Hey, can you introduce me to X, Y, and Z investor?"
 Nick Pachuda 31:53
 Given the current macro environment, it's challenging to raise capital. There are a lot of people out there who claim they can help you raise capital. A lot of CEOs are approached by bankers and dealer brokers saying, "I can help you for a term retainer A and a percentage B." For first-time CEOs approached by dealer brokers and bankers, what are some of the panel's thoughts on how to handle that approach?
 Anita Watkins 32:21
 You want to ask them to leave the room.
 Omid Akhavan 32:25
 So I think it comes down to this: generally, the way bankers get paid is they get a big chunk of the money that comes in from the investor, and investors hate that. They say, "Oh, we're paying them what, 7% plus 7% more?" Generally, terms on private capital raises and private placements are like 7% cash and 10% warrants. If you're raising $10 million, you're having $700k of cash go out the window. Investors hate that. I do think having advisors around the company is important. Sometimes you can't get that advice from a board member because they're too busy or overcommitted. You get them in as a big name because they can send the email intros, but you need that help to refine the pitch, refine the story, and make the warm introductions. Having those advisors can be helpful, so long as they're real with you. They're not just giving you 10 minutes here, 20 minutes there; they're going to spend time with you. They will spend hours going through your pitch deck with you. I think that's helpful, especially if you're a first-time CEO and you've never gotten up on stage before. It's helpful to have an audience that will give you candid feedback. Say, "Don't say that. Say this. Change the slides around." The story doesn't flow this way. I think if you have that kind of hands-on support, it's helpful. Bankers generally don't do that from my experience.
 Anita Watkins 34:00
 There's definitely a role to play. Two of my portfolio companies right now are working with bankers in different capacities. One thing to keep in mind is: don't fall for that first date. If they come to you and tell you they're very excited about what you're doing, there are probably five or six others that are also very excited about what you're doing. Don't fall for the first date. Find the right partner for you. It's going to be somebody who is a trusting partner that you can be vulnerable with, who can really work through some of these issues. They can also play the role of an executive chair or board member to do that handoff. None of that should come at a cost. They should be in it for the relationship, and the upfront should be next to nothing, if nothing at all, to just build the relationship.
 Nick Pachuda 34:57
 I get very wary when there's a huge retainer right up front, plus a big percentage on the back end. You see a lot of activity of introductions very quickly. I look for: are they really optimizing investor readiness before they call anyone? Number two, once they're setting up those calls and meetings, are they prepping the target on the other side, and are they prepping the CEO so that each one of those is really a curated meeting? It can't be a shotgun blast. I'm always wary when someone says, "Yep, I love it. I love what you're doing. I'm going to make 200 introductions in two weeks from now." That's a huge red flag that they're not really putting in the work to help you get it right.
 Omid Akhavan 35:44
 I've seen a lot of stories where companies go out with a banker, they blast everybody, and everybody's heard the story. Things don't go well. Now they come back to market, and it's a stale story. It didn't go well, and they didn't deliver, and all the things that were promised a year ago didn't happen. You've lost a big audience. The comment around curated interactions is so important because you need to understand what these funds are looking for. For example, if you're a preclinical stage company, you shouldn't be having conversations with Endeavor Vision and MVM because they're revenue-stage investors. In the same light, you have to be deliberate about who you talk to and approach. It's fine to say, "Hey, you're running your clinical study. You may be prepping for a commercial round." Go talk to those folks, but if you don't even have your product developed, you're never getting traction, and you're just going to be frustrated.
 Sean Morris 36:50
 Yeah, agreed. I was going to say that for a venture round, at least for me, just my own style, is to have a direct connection with the venture group, particularly someone who's ultimately going to probably be on the board, who I see as a part of the team. Hiring someone that's in between you and them, even in that initial outset, just doesn't feel as impactful and doesn't build on the relationship the way that I personally would like to do it.
 Sean Morris 37:23
 What you've got to do is, there's no shame in talking about bankers or placement agents. Placement agents are usually a step below the run, and you're going to have a relationship with that individual or entity for a while, but they're going to have a tail. When the investors they bring to you say, "Hey, they invested again. I want another dip on that." You have to be really careful, as you were saying. Make sure you know who you're getting in bed with. It's very much like dating. Sorry about that; that's a horrible reference. If you're out there and you're talking to people, you want to have good credibility, and you want to be the person that's talking to the investors. But there's no shame in it. Sometimes you just need to do it because you're operationally focused on something so important that you just don't have the bandwidth to go out and do it. So you find somebody that can help you make some introductions, and you reward them for it because having capital is necessary to move the needle.
 Omid Akhavan 38:15
 That's a critical point. If you don't raise the money that you need to deliver at whatever terms, under whatever circumstances, with whatever partners, you don't survive as a company. You have to get the capital in the door, and I think that's the hardest thing about being a CEO. You not only have to run the business, but you also have to make sure that the business is funded.
 Nick Pachuda 38:39
 We have about a minute left. I want to give everybody an opportunity for some quick parting shots. We'll just run down the line. Omid first, and we'll just come this way. Some quick parting shots for the audience—something they can take home.
 Omid Akhavan 38:55
 I just said mine.
 Anita Watkins 38:56
 I think this panel is appropriately termed: there is light. There are a lot of deals getting done. I think we're going to see, between now and the end of the year, deals probably that exceed what's gotten done up to this point. So I think just keep at it, but most importantly, use this conference as an opportunity to build those relationships. There are a lot of good people here, and this is a perfect venue for it.
 Sean Morris 39:24
 Yeah, great. I would just say, build the relationships. You don't know when and where they'll come back. It may not be directly with that individual or that group, but everyone in this community speaks to each other. I think strength will build on strength, and positive references to the company and to you and the leadership team will come back in a positive way.
 Eman Namati 39:49
 I would just say, keep pitching. Pitch away, and even if you get a no, ask for feedback. Where did we miss the mark? That's going to make you better at telling your story, and they may come around again in a year or two when they're more ready for that investment.
 Nick Pachuda 40:07
 I would say, as we talked about earlier, people matter. You and your story matter to me. You have about 30 seconds, and you're either going to be getting a next meeting or we're going to be done. In the back of my head, I want to know that our relationship—if we're going to invest in your company, we're going to be working together for years, probably—and you're someone that we want to work with. You also have a relentless focus on bringing that clinical transformational technology to market. At the same time, you also have a relentless focus on liquidity, and you are focused on the same goals that your investors are focused on. To me, people matter. Keep it quick and brief, and keep it simple. The story you're telling should have a focus on the same goal that the person you're talking to has. With that, what a great panel. I really appreciate everyone's time. Thank you very much. Thank you, everybody. Thank you.