The Great Medtech, Healthtech, Biotech Debate | LSI USA ‘23

Transcription

Henry Peck  0:07  

Thank you all for being here. It is an absolute pleasure to join you all in Dana Point and to moderate this panel. As Mike said, my name is Henry, I work with LSI on the growth and strategy side of things. And this is a conversation that within our community, I feel like is a little overdue. And I'm excited to have these investors from different stages, leading companies here to talk this out with us and really start to dissect a little bit about what are these different verticals, that the companies in our community that's continuing to grow, are working in? How are different funds looking at these verticals differently? Similarly, see where there's alignment and maybe a little bit of misalignment in the overall community and talk about what companies across these verticals need to be doing in order to best position themselves for the investor community. So I'll pass it down. We'll do a quick round of intros and then jump into some questions. So why don't we start all the way on the end with Owen?

Owen Willis  0:59  

Awesome, thank you, Henry. Hey, everyone. My name is Owen Willis. I'm the GP at Opal Ventures to precede Health Tech fund. Prior to that, I ran a healthcare community for early stage founders and ran a health tech company that was acquired by Elsevier.

Jayon Wang  1:14  

Hi, everyone. My name is Jayon Wang. I'm a Director at General inception, leading medtech and digital health. If you were here in the room, like 20 minutes ago, you know, my background, I was the founder CEO. And our Evergreen Venture Studio Firm is intending to really replicate that artisanal process of starting companies at that very early inception phase.

Megan MacDonagh  1:36  

Cool. Hi, everyone. I'm Megan McDonough. I'm a VP with SV Health Investors, which is based in Boston. And we invest kind of across healthcare, so biotech, med tech and health tech, but I work mostly with the early stage medtech Fund, which is called the medtech convergence fund. And that's a $90 million fund and we invest usually around Series A.

Auriel August  2:00  

Yes. Nice to meet you, everyone. I'm Auriel August. Ex-surgeon turned medtech investor at Sante Ventures, which is an early stage Life Science venture fund. We also invest across medtech, healthtech and biotech. And we're based out of Austin, Texas, as well as an office in Boston, Massachusetts.

Henry Peck  2:18  

Awesome. And so I think just in that intro alone, I heard med tech, biotech, health tech life science, a lot of really cool terminology, which we know kind of delineates these different companies. And so let's start with defining a little bit for the audience what these different verticals are and what they mean, specifically, we are at an emerging Medtech summit, but we know that that term is now growing to include companies that are pure hardware met devices, traditional FDA regulation, digital companies, so let's maybe go down and Auriel your Fund invests across all these verticals. So let's maybe start there, and then have some others jump in to kind of add color and context where appropriate?

Auriel August  2:58  

Yeah, I think it's really important thing now is that how it's emerging that a lot of these lines are actually becoming more blurred as we move forward. And we find even at sante, we do have specific verticals of medical device, which is mostly the team that I work with, which we think of as traditional hardware, treating a disease. And then there is biotech, which you think of therapeutics, these are drugs. And then there's the big hairy monster of health tech, right, which may be software, which may be a device, which makes sense often is both. And so even though we've created these kinds of verticals, there's often a lot of crosstalk. And so what we tend to help separate these different areas is traditional medical device, people tend not to have a hard time with that, right? This is an implant, this is something that is treating a disease, biotech, it's a drug, usually something that's going to be ingested, that's therapeutic. And then in health tech and digital health, we think of it as service, or also treating disease. So it's something that usually does have more of a software component or a primary aspect. I'd be curious to see how others are thinking about the health tech vertical itself?

Owen Willis  4:05  

Yeah, I mean, I kind of think about it as being on a spectrum, right. So we have kind of things that are getting to market a little bit quicker, you have things that are reaching patients earlier, more on the health tech side, and then it gets, you know, kind of more regulated, the time to market is delayed kind of the further along that you go along that spectrum. And I think, you know, one of the big things and this is what we're going to dig into a little bit is it really impacts kind of how you're defining that company impacts what investors are going to be looking for, what investors are you going to be talking to or should be talking to, and then their ability to actually evaluate your company. So I think actually kind of figuring out that definition for you, if you're a founder for yourself and your team is actually incredibly important is actually a pretty big shortcut and being able to fundraise.

Jayon Wang  4:55  

I'll throw it out there beyond just primary mode of action, which I think was really well laned the de risking pathways for each of these types of companies completely different a general inception, we have a separate team that does therapeutics, separate team that actually does synthetic biology works very closely with therapeutics as you'd imagine, but different triage points, different scopes of work that they really need to accomplish at the seed stage. And then our lion's share practice is diagnostics, proteomics, multi omics genomics and IBD. Given that's where our general partners really cut their teeth, as ventures investors at at Paladin, Capital Group and genuine and so on. And I would say the expertise in terms of being able to, in a capital efficient way achieve those milestones is really what sets I think teams apart in each of these verticals, and general inception, the reason all of us were pulled together as pods to then work together, as I think now the interface between each of these categories is all of a sudden a new opportunity for company creation, and potentially at later stage, pre commercials pre commercial or post commercial, I would say the lines become a little harder, but when it's really still in IP disclosure, early product, prototyping and thinking about clinical demonstration, that's when there's a lot of crosstalk and a lot of opportunity.

Megan MacDonagh  6:14  

Yeah, I would definitely agree with that. And I think the other thing that kind of separates the those verticals, as well as, you know, how you think about capital raising, and what's the appropriate amount of funding, to raise to get to an exit, and I think in in medtech, you know, it's usually exit through m&a, and there's a limited buyer universe. So it you know, it's always been the case that, you know, you need to the less you raise, the better kind of the outcome for, for everyone. And I think that's quite different actually, in health tech, and biotech in certain in certain ways. Like, for instance, health tech, you know, sometimes it's the land grab, and you just have to, you know, if you can raise the most money, you're probably going to win. Whereas, in medtech, you know, it's really, it's really about being capital efficient. And I think, you know, especially, you know, when capital markets are tightening, like they are right now, like, you know, being able to actually achieve your milestones with less capital raised is kind of, you know, what the game is all about.

Henry Peck  7:17  

So I'm gonna, before we jump into an interesting point around how the funds and how you guys look at doing diligence and resourcing yourself to do that, in these different segments, I want to dive a little deeper on something you said, which I think is maybe part of where the founder puts themselves in the shoes. And when you listen, it sounds very black and white, right, as a health tech company, you're raising a bunch of money to grow really fast. And it's this big land grab versus med device. It's all about capital efficiency, lower rounds, working towards an exit. guess my question is, in the sober point of view, isn't that black and white? And is it something that as a founder, it takes time early to figure out and set from the get go? Is it something that evolves and changes as in maybe you're starting out thinking you can raise large and you're in this health tech vertical, but really, now as you pivot or adjust technology, you move more into this med device, business model, capital raise model, etc?

Megan MacDonagh  8:11  

Yeah, I mean, I think it's it definitely varies, depending on the company, for sure. And I think, you know, as as, you know, med tech has evolved, the lines are definitely blurring between med tech and, and health tech. But I think, you know, each company just needs to kind of think very clearly about the market that they're going after, and the potential, you know, exit opportunities that are there. And, you know, you kind of build build from that really build the financing plan around that. So it's very individual, to different companies, for sure.

Owen Willis  8:47  

Yeah, I would say to, you know, with with Healthtech, it should be a little bit less capital intensive, upfront, right. So like, right at the beginning, as you're proving out the model, if you don't, if you don't have novel technology that you need to get through the FDA review process, like, generally, it's going to be a little bit cheaper. But then when it's time to kind of actually scale, that's when you need to pump money in. And I think for founders, you really do want to raise the least amount of money possible early on, so that you're not diluting yourself out and making it more difficult in the future, or less incentivized for you in the future to then to take on big rounds of capital. But I think overall, it's going to be dependent on the founder the opportunity, what they're building, and it kind of a controversial statement. Venture capital is not for everyone, right? It's not for every company, I'd say a large percentage of healthcare companies out there shouldn't take VC dollars, it's not going to align with the type of business that you want to build. But for the ones that really, really, really want to scale quickly. That's where venture capital can be really helpful.

Auriel August  9:49  

I'd say it's never that black and white, right? You kind of set it up easy to say absolutely not. And it's always better to be capital efficient, actually, I think no matter what vertical You're in the farther you can get on the less amount of money, the better because that's you're working towards milestones. And I think what's important between healthtech biotech medtech is what are those value inflection points for each of those different verticals, and also your particular company that you're working for? So the you're trying to retire risks with your capital and with, say, this is a pure software play that right that has a lower upfront r&d costs, right? Because it's mostly coding. But then it's you have to scale now you need to tell us what is that business model? How are you going to acquire customers? What are your sales channel is? Is this a b2b? Are you selling to insurers? Or is it direct to consumer? Are you empowering patients, those are where a lot of the risk lie in that particular vertical as opposed to biotech, you're developed, like drug development takes time and money, it just does, you can't really shortcut it. And that's where you're trying to retire risk on the on the front side of really understanding the science because usually on the back end, the market is there, right. And it's a different exit opportunity. A lot of biotech companies IPO with good, you know, phase two or three data. And then we talk about medtech somewhere in the middle, right, where you kind of you don't get a break on either side, there's usually development and r&d risk, as well as a further regulatory and commercialization risk. And so when thinking about what you're raising capital for, and thinking through those milestones, and what are those value, inflection points and how much money exactly you need for that is always going to get you further. And I actually really agree with your point that venture capital isn't for everyone, and may or may not be a controversial statement. But venture math is actually quite simple. But it's but it varies from firm to firm. And so it's really important to finding the if you're going to do venture capital, finding the right kind of venture capital and the company or the firm that is comfortable with the risks that you're trying to take, because that's ultimately what it's developing a risk tolerance tolerance group, that you're all in the same point, as opposed to it's when mismatches happen that that those relationships can can be more difficult.

Henry Peck  12:02  

Talking about kind of the the world of venture capital and how this conversation plays into that. Oh, and you made a statement earlier about how how these companies are set up to look at companies across these different sectors how venture capital funds are set up to look at companies across the sector's. And for example, Jayon, on on your team, you have separate teams all working under one common roof to invest in these different segments. Owen, as a solo GP, you're committed hard to that one segment. And so I'm curious, how are you guys thinking about? How are you guys thinking about the different needs that on your end, you need to have to be able to do something like, invest across all of these different segments and or to focus in hard on one segment.

Jayon Wang  12:49  

It's worth I think, I look in the mirror for us to have the opinions and the perspective that we represent as an early stage venture, right? We're by no means doing later stage post commercial, I would say at the level of technical development of the projects that we're typically looking at the the group of contributors that I have to always extend the bottomless thank you to our KOLs. I mean, if they stop picking up our calls, we have a very difficult time being able to look around the corner as to how medical care technology standard of care is going to evolve. Five years, 10 years, we're certainly not investing for the two to three year horizon, we're doing much longer term, hold hold periods. And that's why in some ways why our firm is evergreen is because we want to actually open the back end of what that may look like. So I would say, of course, we have a core team that has spent 10 30 years in medtech or or Healthcare IT or therapeutics development that can kind of be the glue to coalesce opinions and present them to investment committee, but very much so we're leaning on physicians, scientists that are outside of the confines of our walls in order to really guide our opinion. And we thank them endlessly like.

Owen Willis  14:08  

So my model for my Fund is a little bit different. So we have a foundation of founders and operators that serve as kind of the drivers for a lot of the deal flow that comes in that serve as advisors when we think about the diligence process, and then actually help our founders post investment. And so when we're looking at companies, the big thing that I want to understand, you know, beyond the the market opportunity in the team, is is this a company that I can actually help? Right? Is this something that I can, you know, through my network through the value add that I bring them? Can I help de risk this investment for my LPs? And so that becomes a big part for me and looking at whether or not I can I can bring a company on similar to kind of the advisors and folks that you work with? Are there folks in my network that are actually going to be able to help them And, you know, obviously, it's going to look a little bit different depending on the type of company the market opportunity that they're going after, they're things that I can help with, I have a lot of experience on the go to market side, for better or worse, I've sold into almost every part of the healthcare system. But, you know, if there are things that are kind of outside of my expertise, you you have to have that network of people who are going to be able to help you understand what questions you should be asking. And that I think, is a big part of the the de risking process there.

Megan MacDonagh  15:32  

Yeah, and I think I think as, as we, you know, we actually operate pretty separately, so biotech investors, or biotech investors, medtech or medtech. But, you know, I think the being together under one, one roof is helpful in terms of it just broadens your perspective on, you know, what's out there. And I think, you know, as, as the years go by, we have, you know, medtech, playing in biotech markets, and vice versa. And, you know, it's always important to understand the, you know, provider universe as well. So we get kind of exposed to that from our services team. And so I think, you know, everyone does bring their own expertise, but it's really useful for every other vertical to kind of see what's what's going on, in in each other. Each other's landscape escapes, yeah,

Auriel August  16:22  

I would say, actually almost a little bit opposite. Sante's foundation is on physician. So a lot of the founders, I'm a former physician, the head of the medtech portfolios, and ER physician, the head of the biotech portfolio was a medical oncologist or their CMO, in addition to a head of our health tech portfolio was a CEO of a large healthcare system. And so that's what allows us to feel very comfortable going early, because we're a lot closer to the end users and closer to the needs. And that's where we see that we add a lot of value, because our network is a initial understanding of a lot of clinical disease states, a deep understanding of the healthcare system of health economics of just really, we can retire science risk earlier than than a lot of other firms. And then moving on, we also have additional some operators that have seen on the further side to kind of across that continuum. But still, it's thinking of like, how do we think about those different risks from reimbursement from development for the end user, and we rely heavily on our ongoing context within different healthcare systems to help us address those things.

Henry Peck  17:27  

It's really interesting to hear that the different approaches the similar ideas and philosophies, but the different approaches that are taken from separate teams under one roof from the founding ethos of the investment team. Obviously, these terms have meaning to you, because you use them in your conversations and the descriptions of your funds in the categorization. categorization of companies. What do you make of when new of new terms digital health? Tech bio, right? Every week? It seems like there's another new sub space or sub specialty or adjunctive space? And so are these things that are carrying weight in the investment community and to how you're actually thinking about continuing to build out your practice and differentiate things? Or are you kind of aligned in your overall thesis? And maybe these other things are sub parts of that portfolio? How does this do you see this evolving? Is it all kind of pieces of the same pie? What are you what are your thoughts on that?

Auriel August  18:21  

I can see what my hope is, in particular, around health tech and digital health, which right now, I think is a catch all term for everything. We don't quite know what it is. And so I think as we continue to develop the nomenclature, I think it'll be around where is the value, and where so something that I actually really enjoy right now is saying, Okay, this is a digital therapeutic. Right? So now, it's not a drug. It's not a device, we know that it's software, but it is still providing a therapy. And that allows us to give it a name and a thought of like, okay, we know we need, we're going to have clinical outcomes that we need to think about, versus, you know, software as a service or software as a medical device. Now, everything we're like, Okay, this is software, but it's a medical device. So I think as the nomenclature evolves, it actually will give us a better opportunity to define these areas, because I think that's what's happening right now. And really, a struggle around digital health is because each of these different companies have very, very different value, value propositions. And as investors that we're also growing and learning alongside and even all the way up to the strategics, who were, hopefully one day going to be the buyers of these technologies, or the further investors also aren't sure how to how to define it. So I think as we pick out more terms and get more specific, it actually is going to help the sector's a lot more.

Owen Willis  19:36  

I mean, it reminds me a little bit of how like real estate agents will like make up names for neighborhoods so that they see more appealing, right and are a little bit more descriptive, but there I think there is value in having that like really kind of drill down descriptive nature of what it is that you're offering and being able to then categorize and bring these companies together. You know, the, the space that I think Where it gets kind of interesting is actually that line between health and healthcare. Right. And we're starting to see a lot more blurring around things that were kind of like pretty far out there on the wellness side, that are now becoming kind of more integrated into the healthcare system. And, you know, I there's not like, that's a space where I don't think anyone has actually come up with a good name for those sorts of things. But like, we're starting to see these spaces where these things that maybe existed outside of healthcare are now coming in, and kind of how do we talk about those and think about those as part of that bigger context. And that spectrum that we were talking about earlier?

Henry Peck  20:36  

That's a sidebar with you for a moment. But you mentioned both of you mentioned about, you know, kind of coming up with new titles and a question of who gets to come up with these titles and resize it the most? Well, I was gonna say, I think is is it you? Is it me? Is it this panel? Is it LinkedIn influencers? Right

Owen Willis  20:51  

to do it? Or right? It's Twitter, Twitter? 

Henry Peck  20:53  

That's who it is? 

Owen Willis  20:54  

Yeah.

Henry Peck  20:55  

But in practice, maybe the question should be, who should be defining these titles? Right, is it? Should it be the investment community? Should it be the companies themselves? Should it be market makers and research organizations? Should it be physicians and scientists or some coalition of those individuals? Is it something that we just kind of leave to the internet to do? Or if it plays this much of a role in investment decisions? Company building information? Is it something that should be formally defined?

Owen Willis  21:23  

I mean, this is a softball Henry, you should be doing it. Right? No, I like I think a lot of it comes down to the there are going to be kind of winners in these spaces. Right. And and I think the winners get to kind of define the space. And so that might be kind of the investors who are, you know, making a name for themselves and investing in those spaces, it could be the companies that are the first movers in those spaces that are able to define it. But I do think there's a certain element of success, enabling the naming of these different categories that we haven't thought of as distinct entities.

Jayon Wang  22:01  

I have a easy bias here as a career operator that shadowed all my clinicians in the ICU, watching them and following them treat patients I think whoever is closest to the problem, should try to define these categories, where the end value of defining the category is really to highlight or to attract resources and attention in order to move the solutions further downfield. I think that that's got to be the source, the Wellspring, and it'll flow through hopefully assisted by us the venture community, and eventually it will show up on the regulatory side where the true classification definition actually ends up being a gating issue for delivery of that solution. I think we'd largely see that. But I would say, for all the operators and inventors that are out there on the front lines, trying to make themselves as available and as close to the problems that they're trying to solve. It's worth taking a Saturday afternoon and actually thinking about how do I want to define this, because they're probably the ones once they put it in a paper that gets enough circulation, that are going to influence all of our opinions as to how we see it, too.

Auriel August  23:05  

I think a good example of that is throughout COVID, right, there was the rise of the remote remote patient monitoring and the RPM codes that actually got reimbursed by CMS. And that was a huge deal. So then suddenly saw this influx of companies that were doing remote patient monitoring, they're like, oh, and we're just gonna use these codes, because we know the reimbursement is there. Of course, that's not going to last forever, but it's opportunities like that, where it might follow regulation, where you know, that there's a pathway to commercialization and actually profitability off the innovation that will continue to define these spaces. And so success, I will say

Owen Willis  23:37  

that there is a little bit of a risk and all that. Because, you know, these these phrases then become catcalls. Right. So, you know, I see a lot of companies talking about value based care, without there being a good understanding of kind of how this product is going to fit into that model. And, and that's something that is a little bit of a risk is, you know, as a founder, as you're telling your story, these these phrases, and these kind of like categorizations are fantastic shortcuts for kind of helping investors put these pieces together. But it has to line up with the actual product that you're trying to build, and the opportunity that you're going after, because that is one of the quickest ways to get an investor to pass

Auriel August  24:18  

beware the buzzwords because there's a difference between, you know, defining and just throwing every buzzword AI ML into

Megan MacDonagh  24:27  

Yeah, for sure. And I think it can, you know, an area can be really hot, and, you know, you the buzzword is positive. But then, you know, that can also like by two on the on the other end where if you have one, you know, high profile failure, you know, everything else gets defined with that as well. So, I think, you know, the focus should be on the value that you're creating and, you know, the specific area you're going after it's it, you know, is not always helpful to to just be seen to be just trying to catch away

Henry Peck  25:01  

Owen, you mentioned a reality, which obviously is the case in many, many pitches, which is that the investor passes. And we talked about this being a part of where maybe there's misalignment between the vertical that you are in versus where you may need to be the vertical that the investors are focused on where their diligence capabilities are and what they're interested in, in our conversation before the call, or before the panel, I think it was Jayon who mentioned, an investor's portfolio is not a good indication necessarily of what it is that they're investing in. And so in these cases, with these terms, kind of setting the maybe it was oh, and maybe it could have been anyone. But in this case, I'm curious if you're a company that is, you know, boldly a medtech company, should you not be pitching investors that have a portfolio of heavy HealthTech, or based on the blurring of these lines, and the constant dynamic changes is their opportunity to see, you know, investors that are in one area, maybe based on portfolio, bleed into a new area and expand and kind of catch that right wave, as you might say,

Jayon Wang  26:07  

I think we have the benefit of of operating in a very efficient and full marketplace. So if you're a med tech company, and you're going out and pitching all the largest biotech investors, you are for sure not going to find any traction. I mean, there is a certain know how of finding the mandate with the environment, and investors all have a mandate that's provided to them by their LPs or by whoever is really steering, kind of the capital responsibility at that firm, even if it's a one person firm. I think. Hopefully, that answers your question. Yeah.

Owen Willis  26:49  

I mean, I think I think part of it is just being direct, right. And you know, in those early conversations, making sure that there is an understanding of where they're investing where they're interested in today, because I do think that, you know, a portfolio is an example of where they've been interested in where they've been focused in in the past, it doesn't necessarily represent where things are today. A couple of just like very tactical things, for founders out there who are kind of having conversations with investors, I mean, I think there's a lot of value in getting an understanding of, from the investor where they are in the lifecycle of their fund, I think that has a big impact on on their ability to kind of stray outside of the the core thesis. So if it's, if they have a new fund, and they're on their first three, four, or five investments, there's almost a 0% chance that they're going to stray outside of that that core thesis versus later in the fund, they've been waiting to make an investment for quite a while, there might be a little bit more appetite for something that is a little outside the norm for them. So I think it's just about having those conversations being direct. And being comfortable with asking those questions. It's, you know, working with a venture fund is it's a long term commitment. And a big part of that is is making sure that you're doing your due diligence on the fund, as much as the fund is doing diligence on you.

Auriel August  28:11  

There's a couple pieces within that of finding the right alignment with a venture firm. So there is some aspect of behind the scenes back door, or at least finding out what is the capital strategy of that firm. So even every med tech firm is different. Even saying that, you know, sante is an early stage med tech firm or life science firm, but I'm in the medtech portfolio. So early stage, like what does that actually mean? That's very different across funds. And particularly looking at our portfolio, there's also aspects of, hey, this portfolio is really heavily weighted in this area, Structural Heart peripheral, there's two things of that one, maybe they may not want to do any more of that because it might be heavily weighted, and then to that somewhere that you know that that firm has deep experience and expertise, and so your bar is going to be higher. So I think those are just two things to always think about when you're looking at a firm's portfolio is the distribution of the clinical areas. And then also, if you see something that's heavily weighted, that means that they have a really good deep expertise, especially a company that they've exited in that space before and maybe look into how that went, was it a great went through in like four or five years? Or was it a really slog for 10 years, it took them forever to get out of this. And they definitely don't want to go back in that space again. And then really, really doing your best to network with other folks that have talked to these firms that have friends to say, hey, like they're really interested in, they don't mind taking commercial risk. So the regulatory risk is down, we know that there's a 510 K predicate, and you can get to market really quickly. They know they're really good at putting together a sales channel Salesforce, as opposed to like, hey, they like to big gating technologies that we know are going to take a PMA pathway that they're okay with that heavier upside risk but hoping that that exit is going to come somewhere around that pivotal or after FDA approval. Like those little things are super Super helpful because not just is there, this is not a venture deal, because there are companies where you say this is just not a venture deal that venture match just won't work. There's also, this is not a XYZ deal, because we need our venture math looks like this, our mandate looks like this, and just everything you could do on the front end, to try and tee up that conversation before you're reaching out to folks really, really helps because you're already coming into the same brain space. And we know how hard it is for entrepreneurs, like it's not fun to pitch and like you're going around, and you're really, really hustling and like, we want to help you. But we also have our own, you know, areas that we have to focus on. So we help us help us all aligned together so that we can all help each other.

Megan MacDonagh  30:41  

Yeah, I think that makes a lot of sense that I think, you know, going through your network to figure out what's current as well, it's just really important, because, you know, PCs change over time, you know, partners move in and out of firms. And I think, you know, you just really need to understand the information that you're getting from your network, if that's actually current or not, and try and, you know, validate that as much as you can as well before kind of approach and investors too.

Henry Peck  31:10  

And so, interestingly enough, we've gotten to a place where it sounds like the these terms we agree on, the importance seems to be some relative alignment on where we currently are. And the evolution of these terms will continue to be a valuable piece of how you do investments, how the community should be thinking about building companies. I'm curious, and particularly maybe, from the SP health perspective, I know you do a lot of global work. Is this something that you're seeing work similarly across the globe, in med tech communities, here and abroad? Or is this something where what these what these terms may mean here? And what these verticals? How these verticals are segmented in the US, and maybe how they align with FDA pathways, when you put them on that spectrum? For example, like, Owen said, is that going to be totally different when you go to Europe or Asia? Or the Middle East?

Megan MacDonagh  31:56  

Yeah. So I think I think, you know, the differences I see is more maybe the nuances of the, you know, the commercial side, really, right. So technology is kind of technology, wherever, wherever you are, and but on the, you know, commercial side, I think there's, you know, some nuances to the US system. So she's, you know, since it's, it's the largest med tech market, and there's some nuances to that, that it's, it's sometimes harder for folks outside of us to, to get a good understanding of and to have that kind of deep network, to just to make sure your knowledge of the spaces is current, and the you know, what kind of the market needs are? And I think that does that feeds into, you know, variations and how people talk about, you know, particularly, I'd say more so on the healthtech side, but I think, you know, we're kind of seeing more and more in, you know, more and more in Europe, that people are kind of getting smarter about that. And and, you know, there's a lot of markets in Europe where you can test certain, certain technologies, you know, the reimbursement like Germany's is pretty good on the digital health side. So, you know, we're seeing that evolve as well. And I think that, you know, there's going to be a convergence of people's kind of knowledge base there over time.

Henry Peck  33:27  

I could ask kind of a last question to tee it up. And then we'll see if we have any questions, but for, for all these different terms that we've used all these different verticals that we've talked about, I'm curious, and maybe it's a little bit of a teaser into where you're thinking about what you're the work that you're going to do in the in the near end, you know, immediate term. What within these spaces, are you really excited about? What's what's getting you you know, what's getting your ears perked up your eyes open within this health tech med tech and even the biotech world right now that folks within our community can be kind of taking some of those insights into what they're building and aligning with those really exciting areas.

Auriel August  34:06  

Go down the line. Thinking particularly with health tech and digital health, I am really excited about opportunities that empower patients to take more control over their health care. I think time and time again, studies have shown that control arms actually do really well when they're engaged in the health care system, which is what happens when you run a really well did clinical trial, they take their medications, and they actually do really well. So I think there's lots of opportunities there to to improve a lot more patients lives without necessarily having to create more devices or more expensive things. I didn't say that as a medtech investor. And then there I think it's actually one of these at the intersection of biotech and medtech is interventional oncology. There's a lot of new cancer therapies coming out from local regional therapies from ablation to radioembolization to new drugs and immunotherapies coming down the line that it's across multiple areas. That's that's really exciting.

Megan MacDonagh  35:01  

Yeah, I think I think, you know, on multiple fronts, that's convergence, whether it's healthtech and medtech, or you know, when sometimes it's your device, you can actually track the track patients better and the device performs better. Or if it's between like biotech and medtech, you know, drug device combinations and things like that. You know, I think that's, those are areas that are actually like ripe for new innovations, because you have folks who don't have all the expertise. And so it takes a while for for those things to actually come together. And, you know, there's, it leaves a lot of fertile ground then for for new, new technologies to come out of spaces like that.

Jayon Wang  35:47  

I think for me, what comes to mind first is really around the cost of early innovation to drive towards clinical optimism. So we've seen it in med tech, already, there's a lot of non dilutive funding, I would say venture alternatives for that first round of funding, in order to successfully de risk a program to then maybe qualify for traditional venture funding has really blossomed over the last five or so years, and that was in a very low cost of capital environment. I would say in a higher cost of capital environment, I believe in the efficient market, it's only going to increase the desire for those programs, and the leveraging of technology to further drive those costs down. And for all the innovators, I think it's a great thing, because the lower that cost is I would say the higher likelihood we see more projects, cross that chasm and then reach a stage where they can be really successfully venture backed to fit the venture model more more accurately, let's say.

Owen Willis  36:53  

So I'll take a little bit of a left field answer here. So I think the thing that I'm really excited about right now is looking at rural health care, and looking at, you know, the 40% of the population, that is, has more limited access to care, but also higher risk of a lot of chronic conditions. So it's from two angles, right. So number one, thinking about the Community Hospital model, and the things that we can do to make that more efficient, and help drive revenue for community hospitals. And then on the other side, looking at novel ways we can bring care to patients in their homes in rural settings. So a lot of that is thinking about the remote, remote patient monitoring. It's thinking about kind of different innovative programs that we can adopt, for helping patients with chronic conditions or who have high risk of stroke or falls. And I mean, for myself, you know, the focus of my fund is increasing access to care in the US. And, you know, I think there's a great, you know, the top 20% of the population has fantastic assets to care, probably as the best health care in the world. The bottom 20% of the US has good health care as well. But there's this middle 65% That, you know, with people who are building here, and folks who are building in different areas of health tech, we can really go after, but I think overall across all of us, you know, it's a great time to be investing in early stage healthcare, it's a great time to be building in early stage HealthTech and medtech and biotech. And, you know, as investors, we're looking at things over a much longer time horizon, which over the next 10 years. And, you know, as far as I'm concerned, this is the best time to be building a company.

Henry Peck  38:42  

Well, thank you all so much for doing this panel with us. And for anyone who has questions. We are a little over time. So we'll come off to the side. Everyone will be available for a few minutes here and you can find them on site. But thank you guys very much. And thank you all for joining us for the panel and enjoy the rest of the event.