Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

MDE > Early Stage Fundraising for a Medtech Startup > Flashcards

Early Stage Fundraising for a Medtech Startup Flashcards

(63 cards)

Start Studying
1
Q

What are indications for Pathfinder Medical spinout?

A

It is a catheter guidance platform technology, that helps technicians accurately insert catheter.

  • Indication 1: endoAVF creation (vascular access - replaces fistula procedure) - approval set for 2022
  • Indication 2: CTO re-entry (occlusion of lower limbs) - already approved
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Company spin out story

A

Spun out of imperial in 2014

Strong engineering team (3 PhD, 8 engineers)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Pathfinder current market opportunities

A

Peripheral occlusion, coronary occlusion, bypass system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Capitalisation table

A

List of all individuals who hold equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Dilutive funding

A

capital raised in exchange for equity (original shareholders get diluted)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Non dilutive funding

A

Capital raised without giving up equity (e.g. grant funding)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Enterprise Investment Scheme

A

Government tax incentives for private investors to invest in early stage startups. This essentially encourages anger investors to invest in risky startups by giving them tax breaks.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Is EIS eligibility important?

A

Yes, being eligible for EIS and being able to pitch it to investors in early stages is fundamental.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Burn rate

A

How much money you are spending

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Runway

A

How much time you have until you run out of money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Valley of death

A

Hardest part of fundraising - when the startup is first taking off, and risk is very high

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Hype curve

A

Huge hype at the beginning, with the first angel investment, after which the novelty wears off and you may get pressure from early investors / angels inexperiences with medtech

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Types of non-dilutive funding

A

Grants
Prizes/awards
R&D tax credits
Loans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is a grant?

A

Non-repayable funding, typically from a government or large organisation. Some may take partial ownership over the IP you develop, but it is overall less ownership based than other funding sources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a prize/award?

A

Non-repayable funding with no strings attaches. From private sponsors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are R&D Tax credits

A

Tax relief based on eligible costs, that can come in the form of cash credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are loans

A

repayable funding (with interest) backed by the government, although rare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Examples of grant funding bodies

A

Innovate UK, Eurostars, SPRI, NIHR (NHS)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is an SME

A

Small and Medium Enterprise
Business with less than 50-100 employees
Also exists as MicroSME (even smaller companies)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How does grant funding work for SMEs?

A

There are grants that are only available for SMEs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does Crowdhelix do?

A

Crowdhelix matches SMEs and academics for collaborations on grants
It essentially helps small companies collaborate with academia

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is grant matching?

A

When the funding you need is only matched by the grant in part (usually between 30-100%) and they require that the rest of the money come from other investors.
Grant givers usually want confirmation from other investors that they will be putting in the rest of the money.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Can you rely exclusively on grant funding?

A

No, it is important to have other forms of investment.

Grant funding is arrear (you need to spend the money first to get it back, and it may take a long time to come through)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is fundamental to a grant funding application?

A

Declaring ahead of time how the startup plans to use the funding.
Have a strong project plan and funding plan.
Plan ahead exactly to which department the money is going to go.
You may need to get approval for specific spending plans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
How do grants and investor funding differ in terms of freedom?
Investors generally give less funding constrains and more freedom of action.
26
How good are grant writers?
They may be useful to putting finishing touches and changing wording, but you are the best person to write. the application as you know the company best.
27
How should you manage your financing with a grant?
Make sure you have other forms of investment to finance you before the grant comes in and to pay for things before you get reimbursed by the grant
28
What affects what kind of grant you can apply for?
COMPANY SIZE Some grants are meant for SMEs only and are not eligible to larger companies There is usually no lower limit for a grant
29
Grant application advice
Applying for grants is a full time job (consider opportunity costs) Post grant management is time consuming (meetings, reports, forecasting etc) Grant writers are not needed if you have written academic grants before
30
What is the fee charged by grant writers?
10-20% success fee
31
Matched funding requirement for - Grants - Prizes
For grants: almost always | for prizes: never
32
Examples of funding bodies for prizes
Royal Academy of Engineering Royal Society MedTech campus
33
How do prizes and awards work
``` SME/Founder typically apply individually Approximately 6 month turnaround No matched funding required Part of the prize is awarded upfront Often also include training and networking ```
34
R&D Tax Credits for SMEs
Government wants to encourage R&D, so it gives out tax credits SMES must submit application to convince HMRC that their expenditure qualifies as true research. Tax relief on R&D is 130% Grant funding may affect how much you can claim
35
How likely are you to get a loan, and why?
Banks are unlikely to give medtech startups a loan due to lack of collateral
36
Dilutive Funding examples
Crowd funding (small per capita investment from large groups of individuals) Angels: large per capital investment from sophisticated investors investing their own money) SEIS/EIS Funds: VC or investment manager making SEIS/EIS eligibile investments on behalf of a pool of investors
37
What is crowd funding ideal for
For the near market, that has consumer facing technology For instance, it will be useful to develop a cool pair of shoes and investors will receive a pair once produced It is less likely to be successful for medtech (more complex and harder for consumers to understand)
38
Pros of crowdfunding
``` Easy for family and friends to invest Simple online pitch Quick turn-around (1 month campaign) No need to manage investors validates market potential ```
39
Cons of Crowdfunding
Messy cap table Unsophosticated investors may be hard to persuade Investors expect short term results, while this is long term Higher success fees (7%) Limited ability to negotiate terms
40
What terms are used with crowdfunding?
There is limited ability to negotiate terms There is a set term of agreement (SSA _= shareholder's agreement) from the crowdfunding website, making it less flexible than raising investments on your own.
41
How do you evaluate your company for crowdfunding?
Look at how much the market are willing to pay for it | > Grant funding can narrow down your valuation
42
How do you get funding from angel investors?
Present and explain how much funding you are eligible for. See what they are willing to offer Check their valuations and negotiate.
43
What is typical ticket size for angel investors?\
10-50k
44
Why do angel investors like investing in Medtech/R&D?)
Because of the EIS /SEIS scheme | They must hold investment for min 3 years for tax relief
45
SEIS/EIS Scheme
HMRC Scheme to encourage investments in SMEs From investors point of view: - SEIS: 50% immediate tax credit- overall 27.5% at risk capital -EIS: 30% immediate tax credit, overall 38.5 at risk capital
46
Angel syndacates
Groups of angels grouped around specific geographic locations Very competitive Must have SEIS/EIS pre-assurance They like herd mentality, so they are likely to invest if others are already involved
47
How much does a typical seed round cost
20% in equity, 5% success fee, a board seat
48
SEIS/EIS fund
Fund managers create a sector specific portfolio and invest on behalf of angels directions
49
Pros of SEIS fund
no need to deal with investor directly, cleaner cap table, potential for follow up finding
50
Cons of SEIS funding
Higher levels of due diligence and oversight Higher costs Tougher deal terms
51
Are accelerators programs necessary to be a successful startup?
No, 90% did not go through an accelerator program
52
How are most startups funded?
90% are VC funded
53
What is the most important thing when choosing an investor?
Investor quality is very important | A high quality investor (Tier 1 VC) is correlated to better startup outcome
54
Imperial College Ecosystem
IMperial enterprise lab Enterprise Division NHS ICHT Imperial Founders Choice
55
What is the NHS imperial College Healthcare Trust split into
Clinical trial unit Trial sponsor (helps prepare grant applications) Clincal research facility
56
Imperial Founders choice
Allows researches to choose the support level that is right for them As you are going more work, the university owns a smaller part of the company
57
What routes can be taken with Imperial Founders Choice?
Founder driven | Jointly driven
58
What is the founder driven route like
Basic support from innovations, company formation, help with fundraising and finding investors, board seats University owns 5-10% non-dilutive equity
59
What is the jointly driven route like
Enhanced support from innovations | 50/50 dilutive equity
60
Where did funding for Pathfinder come from?
NIHR | Innovate UK
61
What is the maximum dilution you should have after an investment round?
20-30%
62
What does the Enterprise Lab do?
Runs Hackathons/competitions/awarss Business mentorship Incubator facilityies
63
What does the Enterprise Division do?
Run by Moore Sorts out IP (tech transfer) Industry partnership and commercialisation

MDE (16 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions