1. Dr. Yuval Binur Orchestra Medical Ventures
The Innovation crisis or How to finance your CV startup in the fast changing environment
Dr. Yuval Binur
Orchestra Medical Ventures

2. The world has changed…

3. Are we loosing the ability to innovate?
The three components of innovation:
entrepreneur
IDEA
The problem is in the gas supply

4. What kills Medical innovations?
The classical venture capital model is dead
The corporations are focused on EPS – no longer big acquisitions without contribution to the bottom line
Commercialization is beyond the financial mean of venture investors
No IPO market to companies without revenues left only M&A as an exit
Almost no traditional funding for early stage

5. Each has a different financing strategy
So What we do? Two categories of startups: defined by the cost of the regulatory approval
Small product
Under $3M
Large product
Over $3M
Each has a different financing strategy

6. Case example – small product
InSeal Ltd. - large hole closure
Define unmet clinical need and simple solution
Run on minimal budget to get prototype – 4 engineers, no infrastructure and no complex BOD
Spend $1.5m to complete FIM and IP - no big VC
Spend $1.5M to complete CE - no big VC
Sell for $18M with 6x return in 3 years

7. Why this make sense?
Avoiding the trap and problems associated with large VC financing
Capital efficiency minimize risk
Angle investors provide huge added value
Run it as a “project”
Ensure returns to founders (no layers of preference)

8. Case example – large product
MitraLign – mitral valve repair
Very complex product that address very complex disease
Ensure corporate strategic unmet need in addition to clinical unmet need
Secure very large VC fund as anchor investor with the ability to invest over $50M in multiple rounds
Ensure deep pocket to post approval
Build a strong management team
Get corporate support as early as possible
Create curve out for management at exit

9. In addition:
Think globally as the US traditional market is nearly saturated and regulatory barriers are increasing by the day
Leverage non or minimally dilutive funding: grans and venture debt when appropriate
Do multi year planning with financial buffers to cover for delays and be capital efficient
Identify your patient population (disease and geography)

10. So are CV innovations dead ?
No, however the climbing became harder, the slope to the top became steeper and it became more challenging to find technology solutions for the remaining unmet CV needs

11. Can they effort $30,000 valve replacement?
The emerging market needs Require different kind of medical innovations