Neurotech Startups Have New Tools at Their Disposal

by Jennifer French, senior editor

May 2017 issue

The evolution of the neurotechnology industry has been marked by entrepreneurs and startup companies. The organic growth of the industry has been fueled by research investments made over the last five to 10 years. As more neurotech startups emerge there are more tools available to them.

Neurotech entrepreneurs are not the pinnacles of patience and many are seeking alternative ways of raising critical funding. As we reported two years ago [NBR May15 p1], crowdfunding is a viable option—particularly for noninvasive and consumer focused devices. Kickstarter and Indiegogo are viable resources, but you had better have a strong network and concise message in order to reap the rewards of your work. Cal-X Crowdfund Connect, on the other hand, offers resources for medtech, healthcare, and biotech companies to engage in a variety of crowdfunding platforms.

Another option for startups are pitch platforms. Some of them include MedCity Invest, MedTech Innovator at JLabs, MedTech Showcase, Southeast Medical Device Association Pitch Round Roadshow, and even SXSW has an Accelerator Pitch Event. The formats are mostly uniform in nature; you get a time slot, give your pitch and see who bites. Online streaming platforms have also surfaced such as NeuroLaunch, an online accelerator program in the Atlanta area. Neurotechnology Innovation Translator is a collaborative translation center assisting neurotech startups with expertise, capital, and resources in one platform.

But where many small startups hiccup is with the value proposition of their technology. Commercialization is really about what value the particular technology can provide to stakeholders. That message often gets lost in the shuffle. Taking a page from the pharmaceutical industry, AdvaMed and Deloitte Consulting now offer a tool to craft a value proposition. It helps entrepreneurs determine a device’s value while accounting for the various stakeholders in the healthcare spectrum; patients, advocates, providers, payers, professional medical associations, government agencies, employers and innovators. “The U.S. healthcare system is undergoing rapid change, moving toward a system that puts a premium on value rather than simply reimbursing costs,” said Scott Whitaker, president and CEO of AdvaMed. “But assessing value properly is critical to support continued innovation and medical progress, so that the evolving system can work properly for patients and for society.”

For a long time, the NIH—and NINDS in particular—has offered financial support to small neurotech firms by way of the SBIR/STTR programs. The intent of these programs is to encourage early stage research and development into commercialization. Earlier this month, neurotech startups had the opportunity to interact with funding agencies at the National SBIR/STTR conference, with representatives from all 11 federal agencies offering SBIR programs. This is a funding mechanism that has a long timeline but could be advantageous for high-risk, early stage startups.

Tools like these provide a variety of resources to neurotech startups. Platforms have expanded the opportunities to refine their market pitch, understand their value proposition, and communicate to potential funding sources and investors.