An IBM prototype fingernail sensor for detecting cardiovascular and neurological conditions. [Photo courtesy of IBM]

6. Series A Investors are looking beyond proof of concept.

“Investors have become more astute over the last few years in assessing value, clinical efficacy, and reimbursement potential,” the report said. “Innovators have gotten the message that investors may be less willing to make significant investments without clinical evidence or near-term regulatory approval. Most companies seeking series A are clinical or later in their development stage (66%).”

More than three-quarters of the startups reported that they would need more cash to continue operations beyond 2021.

Most of the MTI startups are seeking series A funding. Of those, cardiology is the primary medical focus, followed by cardiac, thoracic and vascular surgery, and then preventitive medicine and wellness.

“While strategic acquirers depend on a thriving external innovation ecosystem for acquisition targets and new sources of growth, many of them shy away from making investments in early-stage, unproven technologies,” the report said.

If unwilling to invest, the medical device industry can support startups in other ways, such as licensing deals, co-marketing, co-developments and joint ventures.

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