Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick Flaming enthusiasm, backed up by horse sense and persistence, is the quality that most frequently makes for success. – Dale Carnegie Reasonable men adapt to the world around them; unreasonable men make the world adapt to them. The world is changed by unreasonable men. – Edwin Louis Cole

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick How to Prepare Your Medical Device Company for Acquisition Is it really a well understood business methodology? The secret is………positioning for sale requires the same basic effort and elements Financial Buyers vs Strategic Buyers Strategic buyers acquire either (i) fully baked businesses that are accretive or (ii) technology that fits with their product portfolio What is most important to strategic buyers? – “proof” Revenue is not a necessary element You and your people are probably redundant

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick Elements of a Successful Medtech Start-Up Company A highly motivated, effective and dynamic leader(s) that understands the concept of “enrollment” Novel concept or technology Experienced advisors from specific field of endeavor – Physicians, Researchers, Executives with start up experience, Regulatory expertise Large under-served market and detailed market research & analysis – How big is the market? what is indication for use? competition? Incremental product improvements create products not companies - there is a distinction btwn a “technology platform” and a “Product” Intellectual property protection – Initial landscape analysis, filing provisional patents, enablement of invention A well conceived FDA regulatory strategy - 510(k)?, PMA?, Clinical Studies? Pre-clinical safety & efficacy data (bench data if device) A concise and easy to understand PowerPoint presentation – No one reads business plans!, 5 yr projections are useless

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick Investment Capital Yes, you need it. Capital is the life blood of early stage and growth companies Rule – Things always take longer and cost more than you think Sources of Investment Capital – Friends & Family, high net worth individuals – Incubators - The new concept for start ups – Professional “Angel” investors – Venture Capital Not all VCs are created equal How do you get an introduction? The dilution dilemma – They don’t teach you in B-School is how 100% can turn into 1% Preferred Shares, Common Shares, Stock Options

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick Growth Phase - Positioning the Company Enroll the right people Be lean, fast and capital efficient Good science is critical – don’t take shortcuts Focus on establishing proof that the product works Focus on filing patents Understand how and by whom similar products are sold to end users Most early stage companies only prove that adoption is hard and devalue opportunity. Hence, what are you alternatives? Consider an early sale of the Company!!!! Consider a strategic partner to take product to market Consider distributors (US vs Intl) Consider direct sales to a limited market or geography If you plan on taking product to market, Revenue is the key value creator. Profit is not

Students to Start-ups Entrepreneurial Skills Workshop Series The Les Kilpatrick Critical Exit Elements Size of market must be clear Marketing survey of likely end users Proof of safety and efficacy Third party validation by key opinion leaders Intellectual property is protected issued patents are much more valuable than pending patents. If you have to buy someone’s issued patent that’s better than dancing around it Bill of materials must be well understood Gross margin of product will drive the exit price