LA-based VC and entrepreneur, Paul Grand, left his investment job to set up a not-for-profit designed to matchmake between medtech start-ups and giants. Kathryn Reilly talks to him about the process and his hopes for the future.
Charismatic and enthusiastic, Paul Grand’s passion for medical technology and its potential is easy to glean. ‘It’s definitely making a difference in everyone’s lives,’ he begins. ‘It truly is something that’s changing the world.’ MedTech Innovator is a non-profit that works in partnership with the industry including AdvaMed – the US trade association for medtech – and it’s his passion. ‘I started this while I was at a venture firm,’ Paul continues. ‘We realised there was this huge need – especially for start-ups – to gain visibility with the executives at places like J&J. What I saw as an investor was that there was this incredible explosion of innovation all over the globe – little pockets everywhere.’ This proliferation of invention meant that the usual trawl of a handful of conferences no longer turned up all the goods. Which could be good and bad. More ideas mean more potential health solutions, but without the exposure there’s a risk that these life-changing innovations may miss the chance to be developed. And that’s really not so good. A matchmaking competition seemed like a great antidote.
A competition for the underdog
There needed to be a way of diminishing the risk of missing the good stuff. ‘We realised that we needed a vehicle to find these start-ups to make sure they were socialised early with the big companies,’ Paul continues. ‘Our mission every year is to go out and find the best new companies in the world and make sure they’re successful so that we have a healthy pipeline of start-ups for the industry and to make sure that products reach the market. I really believe we’re making a massive difference and impact on these companies.’
A key part of making this happen is the competition and the European round, held at MedTech Strategist’s hugely influential conference looms. The team at MedTech Innovator are already well in to the selection process. ‘Companies apply to us and then we’ll narrow that down by going out and meeting the ones that the strategic partners of our programme are really interested in.’ This filtering process is important – it means that the potential investors and backers are already aware of the entrants’ innovations and feel that they could fit into their particular sphere of interest.
‘We have a selection committee made up of nine large corporates plus the venture firm that I used to work at, and some others. This year we’ll be going out to 12 different cities and seeing around a dozen companies in each – and those companies are the ones that were selected through the original application process – so we’ll start with 700 companies and end up seeing 120 to 130 companies or more.’
Cometh the hour
After all the pre-preparation, competition time comes. ‘On the first day in Dublin, we’ll be gathering with around 12 of our partners including J&J, Olympus,
Becton Dickinson & Co, Wilson Sonsini Goodrich & Rosati and the companies finally get up and pitch to us. We ask them the tough questions that we don’t ask in front of other people – and we really dig in. This is the diligence session. It’s not like we’re seeing them cold for the first time. This is their opportunity to meet with these business investors from some of the best companies in the industry worldwide – and they get a lot of good feedback. From that, we’ll select four companies that will present to the conference the next day.’
That’s when it gets scary for the lucky few. ‘It’s a competition like American Idol or Shark Tank [an American version of Dragons’ Den]. We get the companies out on the stage to present and we have judges from the big companies there to ask questions. But it’s the audience who decides who wins, using an app to vote. The winner gets a free round ticket to go to the USA for the final part of our programme. They’ll get all kinds of amazing opportunities.’ The prize is a profile in MedTech Strategist, one presentation slot, travel expenses, and full access registration to the MedTech Conference Powered by AdvaMed in September in Philadelphia. The winner will also be in the running for $500K in non-dilutive cash prizes in the global competition.
Getting to Dublin
But what boxes do start-ups have to tick to be considered in the first place? ‘I think of it like it like I would as an investor – unmet medical need, market opportunity, regulatory and reimbursement – but more. The main thing is that they’re of strategic interest to one of the partners. That’s a really important criterion. We’re not just saying, “here’s a company that’s developing some really cool stuff, let’s feature them”, we’re picking them because they’re of interest to the industry. There’s nobody else who does that.
‘So when they’re up on that stage at the competition, you know that’s because some major player wants to see them. It’s kind of a game changer. These companies aren’t being featured because they’re the best of Dublin, of the UK, or Europe. It’s not a showcase of the best in the region – these are literally the companies that tick VC boxes and have major companies interested in them too. The bar on what we’re trying to do is incredibly high. They realise that they’re already of interest to major companies – something they wouldn’t normally know.’
The competition aside, what does Paul think of the medtech industry right now? ‘For the first time in a long time we’re seeing uptick in terms of funding. The industry really has a crisis – AdvaMed has published a report on this with Deloitte. The ability for the small companies inventing things to commercialise has been very poor for that last eight years or so. The rate of failure is huge. We have no room on the pipeline for failure. Almost all of the innovation is coming from start-ups but everyone’s been funding the later stage. The emergence of Google and Amazon as players in the health field has helped but I don’t think it’s the reason for this change. I think things are cyclical though, and it’s now time for things to pick back up again.’
So the finances are looking better but what about the technology? ‘It’s impossible not be interested in AI,’ Paul laughs. ‘Two years ago we started to see people talking about AI but none of them we really doing it. But last year we started to see practical applications, for example Arterys one of the companies on our programme, which has a Cloud-based imaging platform. This year, more than half the applications for the competition have AI in them. It’s gone from being a buzzword to being done.
‘I was up at Google Launchpad Studio a couple of weeks ago and they’re looking at AI across sectors. They’re going sector by sector but the first group they picked is healthcare. They’re working with companies that want to work with AI but don’t have the technology – they’re giving them access to the people who write the code in order for them to deliver. One of the companies they’ve picked is one we helped last year – Nanowear – who develop cloth-based nanosensors built into fabric. Google’s given them the resources to improve it even further. Doing things this way could possibly eliminate two years of mistakes. I’m excited about these practical uses of AI. The rate of change is incredible, actual devices are now being 3D printed – and it’s not a novelty. It’s an amazing time.’
Paul’s sense of urgency stems both from the obvious global need and current possibilities. ‘We don’t have time to mess around,’ he concludes. ‘We don’t have time for error. We have to do whatever we can to make it happen. We all have this responsibility.’
Kathryn Reilly is a freelance multi-channel content creator and editor. She is part-time Content Chief at MedTech Engine. She was integral in building a facilitator designed to unleash the potential of tomorrow's innovations. She determined the editorial strategy and tone of voice, sourced KOLs and experts, and found the best contributors in the industry to create practical resources and inspiring thought leadership content. MedTech Engine is now a successful and much respected content-driven platform that generates huge interest and supports innovation and collaboration.