Perspectives on The State of Medtech Funding: Insights from Industry Leaders Terri Burke and Shyam Parekh

Less than 24 hours had passed between the industrial jolt to the medtech and life science innovation ecosystem from the SVB news and my as-planned “state of medtech funding” interview with Epidarex Capital’s Terri Burke and Parekh Advisory Services Founder Shyam Parekh.

Thankfully, it appears a full-on crisis has been averted. While not intended at all as an analysis of what that event means for the medtech innovation ecosystem, it certainly does color the following Q&A with Terri and Shyam on the state of medtech funding, especially for early stage companies captured on March 10, 2023, we are proud to share below.

How would you describe the state of medtech funding, especially for early stage companies?

Terri Burke, Venture Partner, Epidarex Captal (Photo courtesy: Epidarex)


Prior to the last 24 hours, medtech funding is in a pull back. Concepts are still getting funded, including some big rounds for late stage, pivotal clinical trials. But much of the funding for technologies with merit are of smaller sizes, seed and A rounds.

A sizable gap exists between what I would describe as late A and C or D rounds. That gap puts strain on technologies in cash intensive R&D stages trying to advance into pivotal clinical trials or 510(k) submissions. Some VCs are considering inside rounds to bridge portfolio companies through the next 18 months to avoid going out into the marketplace for a technology’s next round.

[A potential] SVB demise will likely put a pause on investing as both venture funds and portfolio companies take stock on exposure. This will almost certainly overhang the space while everyone digests its implications.


Building on that, from the strategic buy side, my observations are consistent with Terri’s. The current lay of the land is such that patients, providers and payers have learned to expect more from the medtech industry in general. For a majority of mainstream MedTech, simple ‘widget sales’ is not sufficient. New technologies from startups or earlier stage companies need to think hard about “solutions.”  The Go-To-Market plan needs a solid, robust roadmap to achieve ‘level 1’ evidence and a well-defined burden of proof requirements as evidence from a set of case studies will be unlikely  to encourage someone to buy.

From the buyers’ side, emphasis continues to move further downstream as more risks need to be retired; e.g. engineering v&v (verified and validated product development) are the table stakes for most investment considerations. It helps enormously, if the sellers can articulate a clear roadmap as to what needs to get done to complete pivotal clinical trials along with robust reimbursement strategy including how to achieve new codes if needed.

Has the high emphasis on fully de-risked technologies by investors eased, increased or stayed about the same?


It is probably increasing some. Strategic buyers can afford to be more cautious. They won’t likely pick up a technology early on clinical promise because not only are they reevaluating their risk situation specifically and holistically, but also they don’t need to move quickly. This is where longer-term funding, revenue sharing and creative development partnerships – Orchestra Biomed and Revival Healthcare are good examples – these more differentiated models will be interesting to watch in the short to mid-term.


This is the current status, as Terri described it well. We all in the industry need to think through business model innovation; e.g. Go-To-Market models, how aggregating multiple inputs can improve the offering, “a total solution” as buyers of the solution want to reduce their own cost burden. This approach would help with the pathway to commercial success. The ‘lone wolf’ strategy (our offering alone) is not likely to be a winning one for medtech startups for the foreseeable future.

What should readers infer from the SVB “news?”


A fascinating case study is unfolding right in front of our eyes. If equity investors are expected to take business risks in banks, they should understand the risks or strengths. Should depositors be doing that as well? Absent significant, systemic financial regulatory action, it appears the answer is yes.

Should startups have or require more than one business bank account? The answer in hindsight appears to be yes as well.

What seems particularly remarkable is that the incredible reputation of that bank, one of a true ‘trusted partner,’ still didn’t keep depositors from quickly withdrawing, or attempting to withdraw, their deposits en masse.


It’s too early to say just 24 hours later, particularly given SVB’s benchmark examples on so many deals across the spectrum. They fill such an important void that something different will emerge.

What do the spate of “tech layoffs” in light of interest rates and return to pre-pandemic life mean for medtech? Is the opportunity to add from a deeper talent pool significant?

If a company is flush with cash in their funding cycle, yes. If the company is in cash preservation mode, I think that is uncertain to doubtful. Bigger medtech companies will be more opportunistic in this regard.

Startup companies, especially CEOs and management teams with boards of directors, should be looking closely at cash burn, inflection points, milestones and pressure testing budgets. Hiring needs to focus sharply on critical talent profiles most capable of efficiently achieving the next critical milestone, and ensuring operations ‘map’ to that outcome.

Companies in those heavy R&D phases, the phases that suffer from the funding gap we discussed above, should already have the requisite talent and third party support on-board. The most pressing question for them to answer is, how do we expedite critical milestone achievement or at least minimize the potential for that achievement to take 20, 30 percent or longer than forecast to achieve; a common occurrence with outcomes no one enjoys.

Shyam Parekh


The way I’ve seen it, execution roadmaps and system architecture become critical. When engaging vendors for verification and validation testing, for example, young medtech companies need to test and retest the roadmap and milestones and match them against the funding necessary for those activities so that the capital is deployed the right way with the right vendors for the right set of activities.

As we know, talent and effective team structure are, undoubtedly, critical inputs for any development program. The nuance I can underscore is capital efficiency. This comes from clearly understanding what due diligence we have done and what needs to get done so that financial stakeholders will have the the confidence that it’s been done correctly. Companies have a well defined stage gate approach to manage R&D projects. As companies tighten the belt and re-evaluate checks and balances along the development milestones and activities and allocate resources as we all want to limit  the number of “$10,000 days.” All of these reevaluations will bring more efficiency and give young companies and the boards of directors, more confidence to forge ahead.

How far down the development and commercialization pathway should earlier stage companies be prepared to depend on other funding sources like NIH grants?


As far down that pathway as they can while achieving as many meaningful milestones in the path to pivotal trials or satisfaction of activities that lead to a regulatory submission as possible.


In general young companies need to be scrappy, but at the same time they need to be thoughtful about the investment of time and energy compared to how much money they’re chasing with those investments. NIH grants can be very long cycles before funding decisions are made and those funds become accessible, assuming the application was successful. Just how much time, and at what cost, will those activities really take? Will it take two or three people to successfully unlock a $50,000 NIH grant?

If a young company’s CEO is a researcher or physician adept at writing grant applications, those might be a good use of his or her time because they can do so with high efficiency. A company without that resource, or a CEO whose strength is operations, team building or raising venture capital would have to pay for that resource or risk the cost of the time required for grant writing, which could outweigh its net benefit.

Where are some other funding resources earlier stage companies should be exploring beyond what we’ve discussed?


To build on that, I have seen the Office of Naval Research issue RFPs on specific medtech problem statements along with the Department of Defense, the national labs, including even the FDA give funding for some specific innovations that may treat rare diseases or technologies that can help FDA panels better evaluate cell therapies.  There are other government programs that award funding to its Prime Contractors where industry can come in as a subcontractor and leverage its expertise by securing a portion of the total grant. This an example of some other ways funding streams can come about for some earlier stage medtech companies.


There are a significant number of tech transfer offices that have funding support available for technologies and startups that emanate out of institutes of higher education.  There are also some funding opportunities available from pitch competitions like Medtech Innovator, incubators like Ignite in Houston, and with organizations rooted in pediatric innovation like NCC-PDI.

The team at Southeast Life Sciences thanks Shyam and Terri for their insights. Stay tuned for a follow on considering the following:

  • If you’re a young company working on THIS … watch out.
  • If you’re a young company working on THIS … consider a pivot.
  • If you’re a young company working on THIS … keep going or go faster.

Taking a Holistic View: Lessons from a ‘Circuitous’ Career in Life Sciences

Our interview with Shyam Parekh, Strategy and Corporate Business Development, Avanos Medical (NYSE: AVNS)

Since 2005 Shyam Parekh has been primarily focused on inorganic growth initiatives for Kimberly Clark Healthcare, Halyard Health and eventually Avanos Medical as the enterprise’s healthcare business evolved. 

“Where can we go from here, two years or five years out from Avanos’ innovation roadmap? That’s been my focus,” Shyam says of his role.

But how did he get “here” and what can others learn from his circuitous career journey?

Shyam was born and raised in Gujarat, India, 7,729 miles – give or take – from Toledo, Ohio. As unlikely as the match seemed, Shyam earned his Ph.D. in organic chemistry from the University of Toledo in 1989 following degrees in chemistry, physics, business and a masters degree in industrial (applied) chemistry from MS University in Gujarat.

A lifelong interest in science, chemistry in particular, drove his studies and his career, but did not come without its challenges.

“I failed miserably in the first semester as a graduate student at Kent State, clearly prior to Toledo, and lost my financial support,” Shyam told Write2Market’s Paul Snyder. “I guess I was right in my hunch that I was not quite prepared when I started my graduate studies in the United States. Do I go back to India or keep trying?

“Somehow, I could not accept defeat. That experience strengthened my resolve to earn a Ph.D. in Organic Chemistry, publish papers and teach chemistry.

“Thankfully, the University of Toledo gave me an opportunity – and I believe the benefit of doubt for my poor performance or experience at Kent State – at least in part because of my complete absence of experience and study in ‘English medium schools.’” 

Like many, Shyam worked hard, overcame the challenges of language, maintained good grades and, as mentioned, earned his Ph.D. in Organic Chemistry from the University of Toledo.

A “No Contest” Post-Doctoral Opportunity 

Subsequently, he had a decision to make between industry or post-doctoral work; a much more predictable, easily-chosen fork in the road to navigate.

“When Professor Barton invited me to join his research group to work on reaction mechanisms at Texas A&M, it presented a ‘no contest’ situation,” Shyam said.

Sir Derek H.R. Barton won the Nobel Prize in Chemistry in 1969 for adding a third dimension to chemical analysis. He served as professor of chemistry at Texas A&M from 1986 until the time of his death in 1989.

“Working with Dr. Barton was a metamorphic transformation in my path,” Shyam said. “It taught more about what an academic research career requires and how research translates into applications beyond the academic corridors than I would have imagined. It also brought out an aptitude for developing research proposals that had me very seriously considering a career in academic research.”

Alas, Shyam transitioned from academia to industry in 1993 upon accepting a chemical research position with Abbott Laboratories (now Abbvie). 

The Intersection of Science and Industry

“I had a wonderful opportunity to work on HIV protease inhibitors in the thick of the AIDS epidemic,” Shyam said. “Over time, I had an opportunity to work in the area of API development; for numerous drug targets such as anti-angiogenesis (oligopeptide based oncology) targets, GERD and anti-infective agents based on macrolide chemistry and many other pharma process research initiatives. This work also involved scale up, technology transfer to various vendor sites, and transfer of manufacturing technologies.

Shyam’s experience as a line management functional lead with Abbott required him to ‘represent the franchise’ to leadership, commonly a Venture Head (SVP level leader) that had the  soup-to-nuts responsibilities from concept to commercial launch, after which the franchise’s project or product would transfer to the commercial operations under the President of Pharma division.

“A holistic view of business, especially how money meets the market, has held high interest for me for a very long time,” Shyam said. “Generally, corporate executives in medium to large enterprises, including the life sciences, ask you to play your position and play it very well. My innate desire to see the whole picture including how basic research in chemical sciences leads to drug programs, how the external innovations are progressing and how all of the ‘parallel journeys’ impact millions of lives motivated me to validate the ability to speak both the languages of business and science fluently by earning an MBA.”

He did so at the University of Chicago in 2003.

Where Corporate Strategy Meets Business Development Through Open Innovation

When Kimberly Clark created a function and opportunity to combine corporate strategy and business development that previously had not existed, he pursued it with vigor.

“Joining acquisition targets with investment rationale and ‘owning’ those transactions fit my holistic interest in business and linked it directly to my life-long interest in science and medicine,” Shyam said. “Ever since, including through Kimberly Clark’s spin out of the health business into Avanos Medical, my interest and focus on innovation in medical technologies has been very, very high. What criteria make a sound business decision for investments in life sciences – where does the money meet the mind and the market – is a question I find continually interesting. Put another way, ‘Is the juice worth the squeeze?’ ‘Is the view worth the climb?’

“Building and continuously refining an open innovation program – one that starts with our own strategic initiatives and then leverages others’ work in the area through strategic alliances like option agreements, joint development & commercialization agreements, structured deals like distribution agreements with metrics for acquisitions – whatever works for both sides – has been highly fulfilling work. Developing and executing on those agreements, undertaking investments in promising early stage companies – whatever is possible to advance innovation from a very wide variety of sources is always an exciting enterprise.”

We hope you will enjoy Shyam’s insights and answers to a few questions in his own words.

What surprised you as you navigated through multiple stages within your medtech career?

“Accountability to the rigor of all aspects of diligence, deadlines, budgets and cross-functional teams is endlessly more intensive in industry than academia. Industry seeks prudence in resource commitment, alignment and goals, not science for the sake of science as there are always competing priorities for corporate resources. 

“Those transitioning from academia to industry are generally not accustomed to thinking this way. They will likely find themselves facing questions like, ‘What have you done for me lately?’ with surprising frequency.

“Beyond measurable results, career growth in industry has just as much to do with perception as potential. Perceptions are like snapshots of you in the minds of your peers or superiors. Who you are, including your true potential, can never be fully known to others until you spend significant time in an organization with them working, contributing and engaging in dialogue with you on multiple fronts.

“Most of your colleagues, including those senior-to-you, know you from brief interactions around program reviews and ‘water cooler’ conversations. Impressions get left behind and those drive perceptions and perceptions drive career development, at least in some part.

“‘I’m about to schedule a meeting. We are going to talk about X. Someone from regulatory will be there,’… those details do not matter in those brief, yet perceptively impactful interactions.

“Better sounds like, ‘The last EU-MDR update that needed to happen is complete. We now have updates from engineering and clinical, but still need input from regulatory.’ Don’t say ‘hopefully.’ Instead say, ‘I anticipate these updates by X and will report to the team accordingly.’ Don’t ask questions to satisfy your own curiosities. Ask questions that move the conversation forward in a team setting.

“Intentionally synthesize your thoughts into succinct, consumable snippets or refined progress reports in a succinct manner. Don’t embellish, don’t ramble, be succinct, state facts and deliver what they seek to understand. These are the marks of an effective communicator, especially in the life science industry.”

What did you learn as you went that you put into action to some very positive effect?

“The hard learnings came later than I would have preferred. This was just my reality. Inside an industry enterprise others’ interest in how your work serves their career is often intense.

“Don’t use jargon or heavy scientific language. Identify and clearly communicate challenges, uncertainties, risks and the mitigation approach. This shift in communication goes hand in hand with a transition from a role deeply embedded in R&D to corporate strategy including mergers and acquisitions.”

What, if anything, would you like to share about diversity, equity and inclusion in the field?

“Inclusion of diverse perspectives is just as important as all other facets of DE&I. Every individual is looking for respect and an opportunity to prove that they too can contribute, that they are vital to a purpose, an organization, a charter. Give sufficient opportunity for the entirety of a team’s perspectives to be heard.”

What needs to change most urgently in the industry and for what effect?

“Giving credit where it’s due, I agree strongly with Boston Consulting Group’s insights on the need for a material change in medtech’s commercial model. One of the key focus areas for the industry is to improve on SG&A allocations and selling costs as the profit pool continues to shrink in most major medtech market segments. This is needed to meet the investor expectations and the changing market demands. The incremental model is not in any way gaining market adoption by taking the price as the requirements for acceptance of new innovations by the practitioners continues to be intensely competitive and demanding due to changes in payer policies. This is another challenge the industry must address. 

If someone was going to commit one or two things to memory from this, what would it be?

“As we know change is the only constant. Business is no different and frequently change happens at very high speed. Economies change and evolve. Markets change and evolve. Thus, organizations need to evolve with varying degrees of speed. 

“Therefore we all have to learn to evolve with it. If you see an opportunity where you may be sidelined or ignored or otherwise ‘boxed in’ based on perceptions that have driven the reality, ask for an opportunity to prove yourself. Seek out opportunities to be helpful in others’ initiatives. It’s hard for anyone to turn down an offer of more help that can advance their work with the potential to shift their own perception – and career reality – in a positive direction.

“Lastly, own your own deliverables. Your future is in your own hands and you need to learn to manage it.”

Thank you, Shyam!

Shyam has recently shared his plans to retire from Avanos in the next 18-24 months.

We wish Shyam all of the best in his future endeavors and thank him for sharing his story, his energy and his insights with the Southeast Life Sciences ecosystem. He has been an active member of SEMDA, Southeast Life Sciences and the broader southeast medtech innovation community for decades. He also serves, and plans to continue to serve, on the Biolocity Oversight Committee and GCMI’s Industry Advisory Board.