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Orthopaedic professionals can expect to hear a commercialization progress report from nearly two dozen startups at the Musculoskeletal New Ventures Conference (MNVC), slated for October 23-24 in Memphis, Tennessee.
In recent years, startups have focused their innovation in spine, extremities and robotics/computer-assisted surgery, and the list of 22 companies presenting at MNVC backs that assertion. Among the companies giving pitches at the conference for the first time are 7D Surgical (spine navigation system), OrthoGrid Systems (total joint positioning) and Simplify Medical (artificial disc). Active Implants (artificial meniscus implant), Crossroads Extremities (foot and ankle plates) and Onkos Surgical (oncology-focused solutions) are three confirmed companies returning to the event .
MNVC brings together investors, strategics (mostly from large- and mid-sized device companies and supplier companies) and entrepreneurs to network, get a collective pulse on the investment and startup climate and identify new technologies. Along with the 30-minute company pitches, attendees will hear from expert panels that include:
- Intellectual Property Case Study: KFx Medical and Knobbe Martens will discuss successful licensing and legal strategies to protect your IP.
- State of Funding Environment: Experienced investors Mike Mogul, HealthpointCapital, and Ben Joseph, Ambassador Enterprises, are confirmed to speak.
In preparation for this year’s conference, we asked Gary Stevenson, Co-Founder and Managing Partner for MB Venture Partners, how he would describe the current startup environment, what excites him about our industry and why people should attend MNVC. (MB Venture Partners and Memphis Bioworks host the conference. And, full disclosure, ORTHOWORLD is a sponsor and will be attending.)
How would you describe the current musculoskeletal startup environment?
Stevenson: One of the advantages of hosting this conference is that it gives perspective and context over a long period of time. We’ve seen a lot of peaks and troughs in the 16 years we’ve been hosting MNVC. With that perspective, I would describe the current environment as healthy. We’re nowhere near the frothiness of 2006 and 2007, but we’ve come a long way from the despair of 2009 and 2010. So we’re in a healthy spot somewhere in between. During MNVC, we will explore the strong areas (extremities) and the weaker ones (spine) with presenting companies from all segments.
How would you describe the state of the investment or funding?
Stevenson: I co-founded MB Venture Partners in 2001 and began making investments in 2002. Over the years, we have funded several successful musculoskeletal startups that have gone public (BioMimetic Therapeutics, now owned by Wright Medical) and even more that have been acquired by larger companies— Cayenne Medical (Zimmer Biomet) and Salient Surgical (Medtronic), just to name two. Since inception 17 years ago, we have remained committed to the musculoskeletal space while we have watched many other investors abandon the industry and in some cases, medical devices all together. The fallout after 2008 resulted in a shrinking venture capital industry to support not only musculoskeletal startups, but the broader medical device and biotech industries.
Today, there remains a shortage of venture capital focused on the musculoskeletal space. This creates opportunity for the investors who are funding startups and challenges for the entrepreneurs that are raising capital. At MNVC, we will hear from financial and strategic investors that are funding startups to get their sense of the current state of investing.
Is there a specific segment of the musculoskeletal market that investors find more attractive today?
Stevenson: This topic will be explored at MNVC, so we will get multiple opinions. But in preview, my sense is that there are niches that remain more attractive for investors than others. For example, investors remain skittish about regulatory risk, so they’re avoiding PMA in favor of 510(k). For implants, investors have remained skeptical towards spine and more enthused about extremities and sports medicine. There has been a lot of investment and M&A activity in robotics and surgical navigation to date, and now early interest is evident in digital imaging and augmented reality. MNVC will feature startups in all of these niches for our attendees to see and judge for themselves.
What excites you the most about the musculoskeletal market today?
Stevenson: To start with, there is the technology side of our business. There are so many new and emerging ideas in the diagnosis and treatment of musculoskeletal conditions. Entrepreneurs pitch us every day, and it is energizing to see what lies ahead on the near-term horizon. Perhaps the convergence of traditionally high-tech (hardware, software, etc.) solutions improving the diagnosis and treatment of musculoskeletal conditions is what excites me most.
But ultimately, it is a human business. Every day, I work with the entrepreneurs who are running the startups we have chosen to partner with. Nothing is more exciting or more contagious than the enthusiasm and passion of our entrepreneurs.
On the financing side, I am encouraged by the increasing M&A interest of the major strategic buyers. And I think the public equity markets seem more welcoming to worthy medical device startups. Everything in a venture capitalist’s portfolio is for sale; it’s just a matter of price. So it is encouraging to see increasing activity for exits.
Do you have advice for startups that seek funding?
Stevenson: For anybody who seeks funding in the musculoskeletal space, MNVC ought to be on their short list of conferences to attend. It’s a target-rich environment. There are a lot of investors, not only venture capital firms, but angel investors. And importantly, an increasing amount of funding has been coming from strategic investors. Our firm has co-invested with Medtronic four times with four different startups. We see other big strategics making direct investments, as well. All of those folks will be circulating at the conference. If you’re a startup in the orthopaedic or spine space, even if you’re not ready to present—your intellectual property isn’t where you’d like it to be, or your waiting on a patent or regulatory steps—companies come and attend the conference with the purpose of networking.
Finally, what one aspect of the event are you most looking forward to this year?
Stevenson: One of the keys for being a host for a conference that has lasted for 16 years (and running!) is to take a holistic view. I most look forward to reuniting with our attendees, some of whom have been coming for many years, and meeting those who will be joining us for the first time. Taking a break from our active daily schedules to catch up on the new and emerging technologies in the musculoskeletal industry refreshes and expands the mind.
