Criteria for Investing in Life Science & MedTech
Julianne Brands [OVF Partner from 2016 - 2020]
2018
We believe there will be an increasing number of local venture-fundable startups operating in life science and medical technology markets. The Oregon Venture Fund has made 9 investments to date in these sectors…
- Healthcare IT & Technology – Bright.MD, Northshore Bio, Lumencor, Daverci
- Drug Development – AbSci, DesignMedix, Cascade ProDrug
- Medical Devices – ClearFlow
- Diagnostics – DiabetOmics
Given the unique regulations governing healthcare, the capital required to take an innovation to market, and the longer development and sales cycles, we’ve created criteria for evaluating investments that might be suitable for a fund of our size and duration (i.e., a 10-year investment horizon). These guidelines incorporate learnings from our best-practices workshops/panels, portfolio investments, and national life science & medtech VC partners.
Leadership Team
We’re looking for founders who…
- Have direct, relevant experience in bringing innovations and products to market or a successful exit in life science and medtech. They know the people, the regulations, and the process well.
- Are affiliated with, and ideally sponsored by, a research institution (e.g., OHSU) or healthcare delivery group (e.g., Providence, Kaiser).
- Have attracted world-class advisors, who bring relationships with potential customers & acquirers.
Defensibility
We’re more likely to consider startups that can…
- Show clear potential cost-savings and improved patient outcomes.
- Offer a focused and unique value proposition.
- Develop valuable intellectual property.
- Generate unique and valuable data.
- Support high margins to offset longer development, sales, and deployment cycles.
- Can attract a deep-pocketed, patient life-science/medtech VC or strategic investor to co-invest with us for the duration.
Scalability
Our fund is a better fit for healthcare/medtech markets and business models that…
- Do not require human clinical trials, an FDA Premarket Approval, or other time and capital-intensive hurdles.
- Are less dependent on buy-in from multiple stakeholders – e.g., payers/insurance, providers/MDs, patients/end users, or significant changes in medical practice or patient behavior.
- Can tap into a large local pool of specialized, expert talent.
- Have fast build-learn-iterate cycles.
- Are B2B (not B2C).
Exit-ability
We prefer life science/medtech markets with…
- Multiple potential, active, highly competitive, well-capitalized acquirers.
- Opportunities to collaborate early on with potential acquirers.
These are meant to be evolving guidelines, in the spirit of being transparent and clear with local startups and instructive for us as investors. They are not meant to be definitive or exhaustive. As always, we are eager to meet with all local venture-track startups and pledge to do our best to be helpful. In our 180-member investor base, we are fortunate to have 30+ individuals with life science and medical technology expertise, many of whom are leaders in their fields.