Building the Next Generation of MedTech Breakthroughs | A Conversation with CEOs on the Cutting Edge of Medical Devices

Session Focus

Johnson opened by asking each panelist for a state of the industry from their own vantage point. The conversation moved from the capital environment into how experienced investors and acquirers evaluate early-stage companies, and what founders consistently get wrong about strategic acquisition.

The State of the Industry

Elazer Edelman MD, PhD characterized the moment as vibrant and difficult at once. The science is unparalleled, the tools are remarkable, and demand from patients and caregivers is extraordinary. At the same time, the threshold and cost for innovation have risen sharply while users have become far more discriminating.

His central observation: when many in the field started, investors backed promise and potential. Now it has to be clinical efficacy. His warning followed from that. Discipline is good for a field, but discipline without patience is simply an urge to do, and his fear is that a field this innovative needs more patience than it is currently getting.

Jon Bloom MD described the opportunity created by systems that learn over time. Selling on outcomes means value capture can grow as the system improves. He gave a concrete example from that week, in which improved workflows rather than sophisticated AI let his company nearly double its price after demonstrating significantly increased savings for a client.

His counterpoint was on exits, which are down. Companies now need more revenue and profitability before making the leap than they did four or five years ago, meaning a more mature company reaches that point.

Michelle Fox RN pointed to a stronger connection between health policy and reimbursement awareness, and to shifting points of care creating better patient access. After decades focused on reactive care for the sick, she sees opportunity in functional health, wellness and screening as both providers and patients become better informed.

The Capital Gap

Paul LaViolette described the environment as a malnourished capital formation environment. Large-cap medtech is healthy, with major companies laying out eight to ten percent long-term growth plans, which he called unusual over the last twenty years and a sign of utilization strength.

Downstream is the problem. Very few firms do early-stage investing, capital has moved later stage, and fewer assets exist at that stage. His concern is ecosystem risk over the next five to ten years, not from any absence of patient demand or innovation, but from the contradiction between technologies capable of treating more patients and shifting the cost curve and the absence of capital to fund them early.

Nadim Yared framed the same problem across decades. In the 1980s a founder needed cool technology and FDA clearance. The 1990s added voice of the customer. The 2000s added patient outcomes and clinical trials. The 2010s shifted power to payers and health economics. The 2020s added AI and the question of how large language models assess a technology.

His structural point: deals are now either large or small with nothing in between. Rounds of five to thirty million dollars have largely disappeared. The field long spoke of a valley of death between regulatory approval and reimbursement; there is now a second valley between seed or Series A and the Series D that funds a pivotal trial.

Asked why he invests at the riskiest stage, Yared was direct. He has yet to see a seed or Series A fund in medtech make money. He and his wife do it to give back, believing he adds value beyond the capital.

How to Evaluate an Innovator

Edelman offered three questions, framed Socratically, Talmudically and in an Aristotelian way.

Be honest about what you actually have. There are many reasons to pursue something, but the worst is dishonesty with yourself about your own technology.

Challenge it to the nth degree. Identify both the unfair advantage and the absolute deficiencies.

Figure out how to get from A to B, particularly when B keeps moving away from you.

Asked what distinguishes those who make it, he named persistence, discipline and foresight, and the fact that the motivation is impact rather than money. If he does not see that, and sees someone unwilling to be honest about what they have, he tells them to do something else.

What Acquirers Actually Evaluate

Michelle Fox RN, who has worked on the buy side of more than 80 deals, said the product and the landscape are only part of it. What separates successful acquisitions is understanding the company’s culture and its willingness to execute through significant change. How dynamic is the team? Do they understand not just the present but how the landscape will shift? Are they realistic about global market access requirements and the evidence needed?

She described raising red flags during diligence so the deal team had an honest understanding of challenges and the realistic investment required.

Paul LaViolette offered two rules. First, strategics are not that strategic. They carry many internal interests, some short-term financial, some political, some about survival, and finding one genuinely aligned with a selling company’s vision is hard.

Second, saying “strategics” is like saying European countries. There is a Europe, but Spain is not Germany is not France. Each has its own culture, and identifying the right fit is close to a full-time job for a CEO and board.

His conclusion, drawn from twenty years in venture and roughly 25 acquisitions at Boston Scientific: companies get bought, not sold. Showing up at the corner office with a pitch rarely resonates. Focus on building the company, keep strategics engaged, and let the pull come from them rather than the push from the asset.

Nadim Yared, who worked at Medtronic and General Electric, put it most bluntly: do not try to convince a buyer that it has a problem. If the acquirer has not already identified the problem itself, the conversation does not go anywhere.

Building a Services Business

For Jon Bloom MD, the company’s turning point was not regulatory clearance or trial data. It was recognizing that physicians cannot absorb another task, and that the company had to operate as a services business taking work off their hands rather than adding to it.

Key Takeaways

1. Clinical efficacy has replaced promise as the price of entry. Capital is more selective and proof more demanding than a decade ago.

2. A second valley of death has opened. The five to thirty million dollar round has largely disappeared between seed and late-stage capital.

3. Large-cap health masks ecosystem risk. Strong growth at the top does not offset the thinning of early-stage investment.

4. Honesty is the first screen. Experienced evaluators look for founders who can name their own deficiencies.

5. Culture and execution capacity drive acquisition success. Product quality alone does not predict a good outcome.

6. Companies get bought, not sold. No acquirer is argued into believing it has a problem it had not already identified.