How Do MedTech Companies Position Themselves for a Successful Acquisition?

Sarah Igoe, MD, MBA
July 08, 2021
tPreparing for a successful acquisition

In seeking corporate venture capital early, positioning a product competitively, and/or bringing a novel, groundbreaking product to market, medical device executives have a clearer path a successful acquisition.

What’s your end goal?

If you are like most medical device companies, you may see an acquisition in your future. Perhaps not right away, but for many MedTech executives, a successful acquisition is a highly favorable outcome. For others, while you will likely seek several rounds of funding as you build, it is also true that significant chunks of growth come through acquisition.

So, whether your goal as an executive or founder is an eventual exit or a large, thriving company, quite often an acquisition is on the path. Which is why thinking ahead and starting with the end in mind makes it more likely that you will achieve an optimal transaction and outcome for your organization.

Below are three key ways that leaders can position a medical device company for a successful acquisition, whether it takes place in one year or ten.

3 Ways Medical Device Companies Prepare for a Successful Acquisition

How medical device companies prepare for a successful acquisition

#1: Get in with a strategic early.

In some situations, companies don’t need to wait until they are ready to be acquired before the conversation starts. Some companies in the startup phase approach a corporate entity early in the process.

As we all know, the largest MedTech companies – Edwards Lifesciences and Medtronic for example – regularly acquire new products to build their portfolios and dominate a market. Most have a venture capital arm that seeks to invest in new technologies that complement their strategic plan for growth.

If your product aligns with that of a large player, connect with their internal corporate venture capital group. Not only can you secure a significant amount of funding, corporate venture capital gives you access to resources and insights that most startups do not have. Plus, if your product performs, you are likely on the path to acquisition.

#2: Cause a disruption

While large corporate entities regularly acquire startup companies to build their portfolios, their success is in identifying the right ones. Sometimes the right ones are complementary to what they already offer. But sometimes the right ones are companies that cause them the biggest headaches.

Products that serve as clear competition to a larger company’s existing offerings will disrupt market share and cause the corporate entity to lose ground – and revenue. If your product rivals one within their portfolio they may be willing to act, which generally means they will attack – or acquire you. In this case, “if you can’t beat them, join them” can make the best financial sense for both parties.

#3: Open their eyes to new market opportunity

MedTech entrepreneurs and executives are in the business of bringing new technology to life. And often, those innovations are in response to a need in the market that has gone unfulfilled.

When you solve for an “X” that no one has been able to address before, there can be tremendous benefits for patients and physicians. And there can also be tremendous financial and strategic benefits for corporate acquisition and investment.

If your product is completely novel, first clearly demonstrate clinical and commercial value. Once you prove efficacy and can show that stakeholders are willing to adopt and pay for your product, corporate entities will likely see your technology as something they simply can’t pass up.

The First Step on the Path to Acquisition

A successful acquisition is the goal for most founders of a medical device startup. However, getting to that stage can take time, and having a strategic acquisition plan will benefit you in the long run. In all, founders should keep each of their long-term goals in mind from the very beginning to ensure their company vision becomes a reality.

Jaunt helps MedTech entrepreneurs, executives, and startups connect the dots from a concept to a commercially viable, fundable product. Contact us to learn more.

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