Hello everyone and welcome to this session, Navigating Device Development Seed to Exit. So the objective of this session is to provide from the company viewpoint, resources and tools for you to develop your product from very early funding for NIH seed to hopefully exit. So, so it is me here, uh, we have a few panelists, uh, and, uh, uh, and this, uh, I, I would like panelists, uh, to introduce, uh, themselves, uh, briefly, uh, introduce themselves, uh, companies and where they are on a super-exit scale, if it's applicable. So, uh, my name is Steve Flynn. I am a, uh, a, with disabilities and commercial disease therapist at the Nassau Urban and World Institute. Uh, with my program is, uh, I work on domestic disease therapists by training, uh, I've worked in academia, in research, uh, I work for a pharmaceutical company, uh, in the tech industry, uh, and, uh, I'm, I'm, I'm currently doing a consulting, uh, work now. Uh, at this point in my time, I already deal with, uh, standards for commercialization, and I, I bring to the office, uh, experience on fundraising for early-stage companies, uh, uh, especially in the angel, uh, investment world. And, uh, the reason that I'm there is, uh, remember that I'm not as chair of, uh, one of the larger organized angel groups in the country called Mission Investment, located in, in San Diego, and where we do, uh, early-stage investing in, uh, healthcare technologies, as well as other types of technologies. So, with my, uh, experience brings, uh, for, to, to the office, uh, the, the type of, uh, uh, things that are necessary for companies who are in a strong choice to begin to become investable and to attract early-stage funding. All right. Hello, everyone. This is Erica Diversi, I'm CEO of a company called Sanguina. We make single-use diagnostics and patient management tools, so we make single-use test kits as well as smartphone applications for patient management. We were founded, well, we have true academics in our story. Um, we've been funded by non-dominant grants for quite some time. We've also received seed, uh, funding from private sources, and we are, um, pretty, pretty true series A if we were, if we were to define it on scale. Um, happy to talk about our journey and where we've been, but as a founder, I've never even been able to come from this as an engineer. In the start of this, and for a lot of entrepreneurial, regulatory, medical testing, and market commercialization skills, um, where we're at, uh, companies rather than generating, very happy to say that, and looking to make profitability next year too. So, thanks a lot for tuning in. I'm very pleased to, um, receive this discussion, um, by confounder, uh, Dr. Bessie, uh, who's a team member of Team Medical. Um, in 2008-2009, um, this, uh, device for surgical management, uh, that, uh, we developed, uh, to meet, uh, clinical, uh, clinical need, and, uh, clinical practices for responsive testing, that, um, ended up being used more commonly in retrophysiology, uh, for, uh, slightly different application, uh, but similar concept, uh, way, uh, the patient can pay, uh, for this. And, um, we raised, uh, pretty amounts, uh, seriously at ESC, uh, a couple, a couple of trillions in between, uh, now, and, uh, totaled $22 million, uh, over 15 years. And, um, we sold to, you know, edX, uh, about four months ago now, five months maybe. Um, plus, uh, you know, um, April 1st, um, um, for, uh, $160 million. We, at the year, uh, at the final year, uh, um, the, uh, uh, independence, we sold, uh, about $24, $254 million, uh, in, in product. So, uh, you know, multiple, uh, uh, being tested. Uh, thank you. And so, my name is Julia Berlanska. I'm, uh, a program director of Transcend IAHC Physician Evaluation and Commercialization Hub Program, uh, and also lead, uh, for Innovator Support Services and the Office of Innovation and Commercialization at NHLBI, uh, London Web Institute. Um, you might have heard of our session, um, uh, yesterday, and we were talking about all type of, uh, modernity planning, uh, available from NIH, uh, to, uh, startups and maybe also startups companies, uh, and, uh, how NIH is on their part of, uh, ecosystem. So, this session, uh, would, uh, look at it from the company perspective. And so, I would like to ask, uh, uh, our panelists here questions, um, um, being one or more, there's another. Um, so, I would like to ask first, uh, how did you get from the idea to your first finding, let's say, of more to use NIH, uh, or was it more to use a different typicalization thing, or why don't they both? Sure. So, to build upon the intro, uh, St. Lina spun out of an academic partnership between Georgia Tech and Emory, who was an undergraduate student at the time, and a couple of ideas that we ended up disclosing to one of those universities. Um, now we're at the point where we've licensed the back, but early on, I had a choice of whether I wanted to graduate and go into industry, start paying out my student loans aggressively, or work on a startup idea that, uh, truly needed, um, some pilot funding to be de-risked. I was fortunate enough to have a great team, and I got a summer internship right after graduation, and they had one of the local hospitals where I was able to be a research tech, and my friendly work on this idea, when I left, I was able to, um, get into a lab and start working on one of our first summer test kits with real patient samples. So, it was, it was lucky. I didn't get paid a lot, but that was technically our first funding. Um, and then, coming from that university and staying relatively close, uh, we also participated in a few, uh, student prize competitions. So, uh, I'll never forget the first prize we won was the Georgia Tech Inventure Prize to a local competition at Georgia Tech. Now it's expanded to the ACC. That's of any interest, but for undergrads and Ph.D. students to compete on a live stage of a live pitch, it's televised on Georgia Public Broadcasting, so think of nothing I've ever done before as an engineer, or as not a movie star, or not used to being on stage whatsoever. Um, and we came in second place, and that was a $10,000 cash prize, which did shoulder some of our expenses, um, throughout that internship period. Shortly after that, it led to an introduction to another competition called Ideas to Serve. Um, our technology first platform is for media management, which does affect low-resource settings and disproportionately vulnerable populations, and so this next competition was really focused on tools that make, um, life better for those that are in local-local states, and we won the grand prize in that one for another $20,000. So, from then on, we got a still well-affected non-dominant funding, but our first, uh, funding, if you will, was from a local high school internship combined with a couple of high school prizes. Um, we had really interesting sex event endings that actually wasn't as high on the media as we are going to. Um, Eric, what about you? Yeah, the best first funding is, is primarily our, and, um, so, from Idea, uh, to first funding, I mean, we, we basically went through about four months to start it with, you know, all of us as, as funding. Um, and then went to, you know, friends and, and family, um, eventually, uh, our first SDI, um, and so it's, um, from 2000, I think it was 2004, maybe 2009, that, uh, that our first SDI, we had about 10 different applications across a few different agencies, um, and our first grant, um, went through, and, um, that was kind of a turning point for us, since it forced us to kind of become a, a kind of sort of standalone entity instead of just being running it by our own wish, and, um, it forced us, uh, to take advantage of the face of what the, uh, like, what society wanted from that grant, um, forced us to go out there and get raised money for tens of years, and, and, and, uh, the, the request for the money was to get, um, uh, tens of millions, uh, But that's not quite how it works. So, if you want to talk to, if you want to speak to us, we would speak verbally. I think we probably would. I don't see a problem in this, you know, having in-depth conversations between American companies. So, one thing that I learned over many years in the investing world is that the company that's going to receive the investment really needs to do due diligence on the investor in the investment world. And, you know, just to be sort of really obvious about this, if you're talking to an individual, a high-level individual, for example, that has made a lot of money in real estate in your company, you know, a medical technology company, you're probably not going to be very happy with that investor at some point because they're going to get really frustrated with how long it takes you to get them to turn on their investment. So, what we always recommend is consider investors' value requirement or as they have a good reputation, if you can, if that's possible. So, for example, in the angel investment world, there is the Angel Capital Association, which is a well-known organization, and there's a lot of members of the ACA, and they are respected investor groups. And so, if you are looking for an angel investor, your best place to start is with the Angel Capital Association and see which investors are available in your area that will invest in your type of technology. Thanks. That was good advice. So, that was a good discussion about various stages of company formation and maybe thinking about key points. If you have an exit point, I wanted to pivot now from business side to maybe a science or a technology side. And I wanted to ask you a question that I hear a lot from NIH-funded businesses. It's about the role of pivoting, pivoting to pivot. Pivoting from your original product to a different product or pivoting to a different indication. And I hear that's very important. Can you comment on that? Maybe you should go ahead, Chris. Sure. There's pivots pretty much in every domain, I think, in a small company. And I don't know what I expected going in, given it was my first rodeo. Maybe I was actually better for my role. I just keep taking the twists and turns as I can. But I think I even expanded more so from a technology perspective, I think, as you go through preclinicals, and then doing human subjects testing, you learn a lot, specifically in my case, I like making brand account and home use technology. So a lot of them might have to be very simple. You know, it's really heavy scrutiny from regulatory agencies on any technologies that are used at home. So the way that that happens on any technology that I come up with is usability, human factors. And so doing these things in usability studies, figuring out where they're going to mess up because they're not home users. They're going to mess up a branding technology they don't understand. And how can you make it as safe or as ineffective as possible? So always having that lens on from a technology perspective, and then dealing with the actual tech itself. Is there a sales life component? Is there a value supply lifecycle? Where does it start? Where does it end? Who are the parties involved at each one? Learning all of that and then being able to pivot when you learn about a roadblock and then you have part of that journey. And then you have other pieces that I think cost dividends, so you have the market itself. So you'll have a wave of interest from everybody and the runner dropping out the news. When let's take the pandemic, for example, doing PCR testing was never talked about at dinner tables and then it all of a sudden was. And if you had a pocket PCR test, you were in a much better position to get funding for it and get it out the door. And then from another perspective, from a lot of these medical devices, you have an FDA that's ultimately going to tell you what your claims and intended use are. So you can do it to the very end of your review process. And at the very end, the FDA can say, well, this is where we think it needs to be. And they're balancing timeline. They're balancing a risk pendulum of their own to figure out what they're going to allow on the market and what time FDA's thinking can constantly change. And I don't think it's just to make us crazy. I think there are digging in the facts and learning as we go. The pandemic was a really good example of that. But just a couple of more from my side. I think the tech is certainly has to do this. I think regulatory and market and library co-founders and now our chief medical officer, Wilmer Lamb, would always say, you have to have several things for a company to succeed. You have to have the right idea, the right team, the right time, the right funding, but even all four of those aren't sufficient because you still have this amorphous external forces, if you will, that you have to work with. So we see a lot of that. Do you want to, let us know when you have any feedbacks. I think that was so specific. Well, I will, we don't really, but let's see. When I first started on a media platform, it was very simplistic, I would say. I saw myself without a media my whole life and I don't really like tools that I can manage at home. As opposed to having to use it so bad that now I'm getting rushed to ER. And I'd really like something to add at home to manage me without considering what reimbursement pathway that I might use, if at all, without thinking, well, how many are actually like me that know about technology and are willing to do blood testing on themselves every day in order to rely on inspiration from the diabetic population So in the very beginning, I had this very naive look at how a home test for a media management might exist. I also ended up thinking about what FDA might put it first if it's the person that's coming to the market. So in our case, we actually had the most success in working with businesses that address the media management as a symptom of either disease of a different condition or as a result of a therapy or a drug. So we're working with those companies that are addressing management at which a media is an end point. They're not really interested in having their patient populations use it. So it's much more B2B than I ever thought our company would go. Times like, I think Steve could really help us too, but it also works a lot better for many investors too. Because going from a TTC company, medical device right from the get-go to it's a lot of money, a lot of different marketing effort. If you're going to go that route, if you're going to even have adoption, if you have to educate anything, it's just more difficult. So we're starting to work in our team as a big pivot and we continue to learn more as we go. Sounds pretty big. So we've got a super list of these two. The first one, we're lucky, was the best phone number company. We named it the best phone line therapy just for too long, for too many times, too long for anything. And we've been working with them for a while until we were in the contents. Well, for a while, it's just a steal. And we were interested in using the device for warning and maybe one or two of them were actually using it for warning. And in the trial of this, it was my turn to keep a picture of Warren. And, you know, we had done a sales run. At the time, we looked at each other and we just realized, oh my God, we're doing this, no one's thinking Warren. We're missing 50% of the market. And so when we took the business for an example we have incentive writing in my hand, and we're making it, you know, pretty, you know, early in the course, and I'm always thinking back to when I got a word in therapy. And, you know, it's just, it's funny, this is the time, but that's, you know, what we're going to do with that going into day, we're still going to do it, just to get that attention. And so, what we've been doing, based on what I've learned in therapy, making all of the money in the universe, you know, actually, that's the point where it gets, like, it took me such a long time, one, to at least try to step up what we're saying, as we saw in the CP market, and it's sort of new thinking, thoughtful sufficiency is everybody's, you know, it doesn't have to be patient. And that was the biggest thing of it all, because all of a sudden, critical care was sort of not that attractive. We were grossing about 15% a year, wage critical care, which is, you know, something for big, large, sustained business, like, for a startup. You need to be much bigger than that to actually have this kind of position. And then, as you know, the employee grew by 15% a year, for, you know, for the most part, you're not doing job forcings. Well, thank you for stating that. So, what I think I want to hear is that the ability of an organization to pivot depends largely on the quality of the CEO and the C-suite team. They need to be a learning organization, and they need to recognize when things change, and they need to be able to grab opportunities when they present themselves. So, that's why investors will tell you that the C-suite team is probably the most important component of a startup. It's not really the technology, it's more the quality of leadership of the company. I'm really pleased, yes, thank you. A lot of opening things up an idea. Okay, so now, since the CEO or founder, yet still is an associate, I want to direct a point, so, for which you're there, for the video channels, I already see you. You still say you need to come up with a table to ask a question, and pose the question in Q&A. And meanwhile, because there are no questions now, I wanted to pivot to attracting your initial funding. So, you talked about this whole idea a little bit. And after you go to your NIH funding, what did you have to do to attract your management? Well, for us, I will say that NIH and non-government funding played a huge role. Because when we were speaking with our soon-to-be seed investors, we told them that we did have a lot of this funding that could really fund any of the R&D stuff of our company, and they viewed it as leveraged funding. So, they knew that every dollar they put in, I had at the time, too, that would be coming from a non-dilutive source. And so, for some of them, they thought, well, this is a great deal. There's a lot of companies where we just put in the only money, and it's 100% of the risk. So, I think our timing was really good. We had finished our Phase 1 funding, and we're in Phase 2. And we had just started the Phase 2 funding, and we were able to paint the picture of what we were able to use, what that funding pulled in, what projects or value inflections we were all working towards. And we, truthfully, didn't take our first private investment money until we had marketing expenses, because it's a lot better. One of the categories hasn't been more legal. One of the categories that the SBIR program can't really fund correctly. At least for us, we used it as a budget order. I think someone yesterday at the end of the morning said, it's prestigious to be an NIH-awarded company. So, we definitely leveraged that. I think the timing also worked really well to our advantage. So, we closed our first round in July of 2020. This is at the height of the pandemic. And I think that our fund, along with a lot of other medical-focused funds, there was a wave that was turning towards investing into diagnostics and care and remote patient monitoring. But why telehealth, right? Because things were, the original model just stopped. The original model of bringing many, many patients to one location to be seen and evaluated just stopped. You started to see many, many products that started to use digital management technologies, which was worth it for our value. So, I think again, the timing of that universe, if you will, in combination with having leveraged funding, helped our conversation tremendously. Thank you, Anita. And so, I just wanted to clarify, for those not familiar, this leveraged funding is at, I think, close to phase one, and phase two is there, and phase one is the feasibility phase. It's typically for the applications, maybe it's 300K now, or before, or every year. And then phase two, it could be two years, maybe three years, and it's, right now, maybe a position up to the same end of us. So, yeah, so I can see how investors, that would be a factor for the point. So, I hear that you've joined us. I know that before you asked your question, I wanted to speak about Jesus. So, do you think just funding from institutional investors, so, again, when we first started trying to raise money, and the unemployment rate was 91%, most people had not been attracted to the funding, for some time, or not to be part of it, and your points for the unemployment goals, were highly unapproved. And so, we kind of just stayed at what it was, and said, well, let's raise it. Now, as we go around the presentations, you don't have to raise the money. And so, we kind of just, you know, jumped on the bait, and said, well, let's do it. And then, post-October, we're going to have, you can apply the goals as well. We do typically use the best towards the last round or two, where we really want to just get in front of a lot more investors. But then, again, you're being assured, you're not raising the value, and 92% of the time, you can get a lot more interest and hope for that. But, you know, that's really, that's how we try to allow our employees to really do a lot of the thinking, and get a lot more people to initiate that, and to find the real person. And, you know, there's a lot of comments, and there's people that tell us, you know, this was two years ago, and it's been a fortnight. You've made progress. It's a lot of things, so, I don't know. And sometimes, I wish that, like, we should be the real, or expected people to be able to come in to work and say, well, it's always a better investment. And, you know, sometimes, you want to come in, and you can't tell what it's going to do. Well, you know, you have to go, you know, it's always a better investment. So, I mean, some people go, and some of them don't, and they'll never get seen. So. Yeah, and I just want to add that, sophisticated, for whatever it calls for, investors recognize, who invest in healthcare technologies, recognize the benefit of NIH funding in a company. They recognize that the technology has already been voted, and the technology works, because the NIH has funded it. So, we're making a lot of new diligence on the technology that's already been done. So, now they can put more on the business side of things. Thank you, Thomas. Very informative. Two questions. So, in terms of public interest, for public age, when do you have the ability to mitigate a time for that, and mitigate it? And if it doesn't mitigate it, what do you do? Institutionally, investing, no one pointed out to do that. And the second is, for everyone, it's very, it's very, it's very, it's very, it's very, it's very obvious. What do you do? And this is a good, what I found out, when do you have, when do you have the control that I have, and why I'm sitting there, and what's the regime that we're operating, what kind of policies are we talking about? When you sign your name. So, I signed my name, and it was great. So, let me take a crack at that. So, in terms of IT, if you're gonna do a startup company, you should think about negotiating with universities as quickly as you can, to acquire worldwide rights to the IP. And you need to, hopefully you have a good tech transfer office that you're, you know, they're willing to work with you, and so forth. When you deal with therapeutics, you're gonna need worldwide rights to technology. If you're a medical device, you don't necessarily need worldwide rights, but it's always good to pursue that. So, do as early as you can, and get those negotiations started as quickly as you can. And, Sam, where were you in your question? I forgot. I didn't have a question, and so, then it's not that you guys don't have anything, so I'm just curious if that is what you're talking about. So, I'll give my answer, and Gary's gonna weigh in on this. When you start taking delimited funding, I think, it's true that, typically, if you're, let's say you got your seed rounds from an angel group, for example, it doesn't make any difference whether it's an early stage round, or a later stage round. On average, the investors in the round are gonna end up owning about 20% of your company when the round is closed. So, if you're raising a million dollars, at the end of the day, the investors are gonna own 20% of your company. If you're a later stage, and you're raising $59, the investors are gonna own 20% of your company. So, that's kind of a, I don't know if the audience agreed with that, but that's been our experience. Yeah, I'll agree with that. And so, benchmarks are, in our seed round, it was just over $2 million. It was right on that 20% dial. And truthfully, as they said, right, pick investors that you like, and that you're gonna wanna talk to, and you're gonna be proud that they have that percentage of the company. This is a way, they will likely introduce you to all of their other investor friends, and everything. They'll start speaking on your behalf. So, we felt very good about it. We thought it was fair, so we fit right in that benchmark, in our seed. With respect to negotiating IP, again, coming from an academic standpoint, as a undergrad, I actually had an opportunity to take the IP. I did not actually have to disclose it to either of my universities. If I was a PhD student, that would not be true. But because I was a undergrad, I had the opportunity to take it myself, and pursue it myself. Well, we're doing it through the university now. Again, going back to my story, after story, so my internship with not very much money, it made a lot more sense for me to disclose it to the university, which happened to have an in-house OTT team. So, they actually have in-house legal, you know, on-school skills, but our school had in-house legal, and they started prosecution pretty immediately. So, the benefit there is, again, if your school agrees to it, and they want to pursue it, then the school actually has to see value in it, and agree that they're gonna go ahead, and take the disclosure, and do something with it. In our case, they put in a lot of extended expenses early on, and we got to a point where we wanted to be SBR, Small Business Grant Program eligible. We started the conversations, because I involved three or four different academic institutions, and actually it did take a long time to sort that, and get everybody to sign up at the end of the day. There are also institutions that have certain roles, some of them can't take equity, if it's a, there are some public universities that can't actually have equity in the company. So, to think about all of that, is you're trying to make a singular deal, and if you have multiple involved, who's gonna lead? So, it actually took about 12 months, and we actually were one of our first submissions for SBIR phase two. We had not gotten our technology license back yet, and it was a huge day for our application. We didn't get the funding, because of this seemingly single point that kept on coming up in the summary statement, seeing how the panel talked about it. So, by the time we submitted, we were able to say, no, we got it done, and we were able to get it. So, from experience. So, yeah, I looked at all the ways that I wanted to do it, but there were a lot of risks before me, and so, yeah, we've had some experience, hopefully. Yeah, we, at the time, the comfort was fine, but we also had a lot of education that was going on, and so, there have been several months where we had the responsibility of prosecuting a case, and so, you know, we were trying to do it, so this was a panel session, and then, you know, we had to have a decision, but I think we were very civilized. I don't think this, neither me nor our colleagues, much like the other, I think the other organizations, had decided in terms of it, which happened in Australia, if they were forced to file, or forced to invite, the USCC forced to invite, to do that, and so, you know, there was a, and so, you know, George has to be in line with the rest of them, or, you know, like, forced to file, et cetera, to do so. It's not, it's not because we're saying it's something, we think we're very civil, but, you know, it's, you know, it's very civil, just to have, both of our interviews, just like, you know, like, that, and, and, in terms of the percentages, I remember, when the percentages were released, each of us, we had to remember, or guess, in which way, was it, in West Liberia, and, you know, was she, you know, just needed money, to get out into the public, was it, for which representation, for instance? And so, you know, it was a long wait, and so, we had to figure it out, and, and, and finally, we realized that, the USCC was, was, what's the answer, I don't know, I don't know. Not to mention that when I was in graduate school, which was fun to do, I had a lot of guys who were saying, we're going to be great, we're going to be one of the best, we're just too good at it. You know, I mean, I love being, you know, one of the best at geography, and I also knew that it was true, I knew that some people didn't show up on the desk, and that's the number one reason. It's just that you don't show up and say, this is the best you're doing ever. It's just the number one reason. It's the number one reason you're doing it. Let me share, so Joe, the way you guys speak, for that, for me, it's normal. So Joe, for Christian, for us, Steve, for me, Eric, to the end, David, and to just, you know, you smile at us, and it's terrible, but we all get the confidence.

device development

fundraising

NIH funding

exit strategies

intellectual property

early-stage investment

technology commercialization

leadership team