Expert Analysis for Informed Decisions
70% to 80% of healthcare startups, including those in the medical device sector, undergo more than one round of funding.
Medical device startups, in particular, are susceptible to HIGH cash-burn rates and market uncertainties. Therefore, the chances of investment failure are elevated, and the losses can be extensive.
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If Technology and Product due diligence are insufficient, investors could unknowingly take on higher risks.
PRODUCT DUE DILIGENCE
THE RISKS OF POOR
FINANCIAL IMPLICATIONS
Overvaluation: Without proper product due diligence, investors might overvalue the company, resulting in a poor return on investment.
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Wasted Capital: Funds that could have been allocated more judiciously will be wasted, potentially causing liquidity problems.
DEVELOPMENT PATHWAY
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​Timeline Delays: Inaccurate estimation of the development phase can result in delays, which can be especially damaging if the device is designed to address a timely need in the market.
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Resource Misallocation: Investors may have allocated resources based on the assumed development timeline. Delays can lead to higher capital requirements and even employee burnout.
TESTING AND TRIALS
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Incomplete or Skewed Data: Inadequate testing can produce unreliable data, making it difficult to get regulatory approval and jeopardizing market success.
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Adverse Events: Failure to account for all variables in clinical trials can result in unforeseen adverse events post-launch, leading to recalls or even lawsuits.
INCOMPLETE TECHNOLOGY
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Validation Risk: Products that haven't been properly validated against clinical needs or performance criteria can lead to longer timelines for market acceptance or even product failure.
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Pivot Costs: If the technology is found lacking or incompatible during the later phases, significant resources might have to be invested to make the necessary adjustments or even pivots.
SYSTEM COMPLEXITY
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System Integration: A device MAY not be as advanced as claimed and might face hurdles integrating with existing healthcare systems, making it less appealing to end-users.
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Data Integration: In the era of Big Data, poor capability to integrate with data analytics tools can limit the device’s utility.
DUE DILIGENCE
BENEFITS
Reduce your investment risk with detailed Technical and Quality investigations of a company and its technology.