Inside the Investor's Mind: What VCs Look For in MedTech

In this episode, host Etienne Nichols sits down with Josh Eckelberry, Principal at Solas BioVentures, for an illuminating conversation about venture capital in the MedTech and life sciences sectors. Josh shares his journey from a medical background to a career in venture capital, driven by a passion for creating "leveraged change" by helping innovative technologies reach a broader patient population. He explains how this approach allows for a greater impact than what's possible in one-on-one clinical care.

Josh delves into the unique investment philosophy of Solas BioVentures, which is an operator-led firm that provides hands-on guidance to early-stage startups. He introduces the firm's core "dote, goat, float, and moat" framework, which evaluates a company's therapeutic efficacy, management team, economic viability, and intellectual property. The discussion provides a candid look at how venture capitalists assess risk and make investment decisions, highlighting the importance of building a strong, emotionally intelligent team and demonstrating a clear path to market.

The conversation also explores practical strategies for startups to de-risk their investment proposition. Josh offers insights on how companies can use a pre-submission to get crucial feedback from the FDA, and how leveraging the right advisory board can instill confidence in potential investors. He explains the value of bringing in key opinion leaders and how a well-structured clinical trial, with thoughtfully designed inclusion and exclusion criteria, is essential for proving a technology's safety and efficacy.

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Key timestamps

• 1:02 - Josh's transition from medicine to venture capital.
• 7:27 - The unique, operator-led investment approach of Solus Bio Ventures.
• 12:47 - The "dote, goat, float, moat" framework for evaluating startups.
• 15:02 - What makes a great management team ("the goat").
• 24:43 - De-risking strategies for early-stage MedTech companies.
• 27:55 - The importance of regulatory discussions with the FDA.
• 30:13 - Building and compensating a strong advisory board.

Top takeaways from this episode

• Focus on the team: Investors, particularly at the early stage, place significant emphasis on the management team's experience, emotional intelligence, and ability to navigate challenges. Past success and a positive, collaborative culture are key indicators of future performance.
• De-risk early and strategically: To attract early-stage capital, companies must proactively address key risks. This includes securing strong intellectual property, proving therapeutic efficacy, and engaging with regulatory bodies like the FDA through pre-submissions to gain confidence.
• Build a knowledgeable advisory board: A well-vetted board of advisors with a strong reputation and deep industry knowledge—particularly in areas like reimbursement and regulatory affairs—can be a major confidence booster for investors.
• Understand the "Dote, Goat, Float, Moat" framework: Companies should be prepared to address these four pillars: Dote (therapeutic efficacy), Goat (management team), Float (economics/reimbursement), and Moat (intellectual property).
• Embrace the conversation: Early-stage investors are often more accessible than founders might assume. Reaching out and engaging with firms like Solus Bio Ventures can lead to valuable feedback and potential opportunities.

References:

• Solas BioVentures: The investment firm where guest Josh Eckelberry serves as Principal.
• Etienne Nichols' LinkedIn: https://www.linkedin.com/in/etiennenichols/
• Greenlight Guru: A medical device quality management software (QMS) and electronic data capture (EDC) platform for a medical device company's entire product lifecycle.

MedTech 101:

• Venture Capital (VC): A form of private equity financing provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential. VCs invest in exchange for an equity stake in the company.
• Pre-submission (Pre-Sub): A formal request submitted to the FDA to receive feedback on a medical device before a marketing submission (e.g., 510(k), PMA). This allows a company to de-risk its regulatory pathway by getting clarity and guidance on clinical study design, quality system requirements, and the most appropriate regulatory path.
• Intellectual Property (IP): Intangible creations of the mind—such as inventions, designs, and patents—that are legally protected from being copied or used by others without permission. In MedTech, this is often a company’s most valuable asset and provides a competitive advantage.

Memorable quotes from this episode

• "I call that leveraged change. I try to change that fulcrum of not just one patient at a time like I felt like in clinical medicine, but advocating and changing the lives of hundreds of people by getting these drugs and devices to market." - Joshua Eckelberry

Feedback Call-to-Action:

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Sponsors

This episode is brought to you by Greenlight Guru, the only medical device success platform that offers both QMS & EDC solutions. Greenlight Guru helps medical device professionals get their devices to market faster and keep them on the market by providing a purpose-built software platform that streamlines the product lifecycle. From design controls to risk management and post-market surveillance, Greenlight Guru is your partner in improving the quality of life.

Transcript

Etienne Nichols: Hey Josh, how are you doing?

Joshua Eckelberry: Morning. Doing well. How are you?

Etienne Nichols: Good. We've already got several people in the chat from all over the world. We've got Italy, Cleveland, Ohio, Wheaton, Nashville. All right, Evelina.

Joshua Eckelberry: That's awesome to see. Thank you, guys, for joining to do a.

Etienne Nichols: A Tennessee meetup sometime. I, Josh, really wanted to do this in person and I did too. I've had some life Tetris happening.

Joshua Eckelberry: We're relatively close. Our offices are maybe an hour and a half, two hours away. So, yeah, yeah, it's.

Etienne Nichols: It's gonna happen. We're gonna do something live in person at some point here, but.

And maybe we'll have Evelina along as well if. If you're in the Nashville area or Tennessee area.

Welcome, everybody. So, we've got. I'm just giving it just a few.

Just a few more moments to let everybody in, make sure we get a chance to not start without anybody.

Okay. This is a little bit different of a session than we've had in the past. So, this is not necessarily as much of a webinar as we're going to kind of.

We'd be recording a live podcast. And I'll mention this again as we. When I hit the record button, but just a full disclosure. And so, part of the reason I say this, those in the audience have your questions, have additional questions and feel free to throw them in the chat or the Q and A.

I'm not going to be strict about that like we are sometimes with webinars. I'll pay attention to the chat. Hopefully Josh doesn't get distracted by the chat. Feel free to ignore the chat as much as you want.

We will be sending the full recording and the presentation slides to the registrants after.

So, watch your inbox for that follow up email. But like I said, I say slides just because that's ingrained in me to say that we don't have slides this time. And that's by design. This is going to be more of a conversation and really, I pulled from the questions from the audience, kind of feeling out a new, I guess topic for our repertoire. So, if this is something that's interesting that we want to dive more deeply into with a full-on presentation, let us know.

Joshua Eckelberry: All right. So, you're saying I'm the guinea pig for the screen light idea we got going?

Etienne Nichols: Something like that, yeah. Sorry. Yeah, I, I spring things on Josh and he's, you're always such a good sport about it, so I appreciate it.

Joshua Eckelberry: Okay, we'll figure it out.

Etienne Nichols: All right, so I guess go ahead and time to get started everybody. Thank you for joining us. Welcome to today's session.

I'm going to introduce this a little bit differently.

So, for the full recording for when I go on, when we put this on our RSS feed to the Global Medical Device Podcasts, this is, this is where we're going to start. Okay.

Hey everyone. Welcome to the Global Medical Device Podcast. My name is Etienne Nichols. Thank you so much for joining us today. Today with me to talk about investing and really what we're talking, we're calling this topic Inside the investor's mind.

What VCs look for in MedTech and life sciences startups.

We've invited Josh Eckleberry from Solas BioVentures. He's a principal there where he bridges clinical insights with business strategy to guide early stage MedTech investments. He has a background in biochemistry, medical training and an MBA in healthcare administration.

He brings a 360-degree view to venture development, and he also serves on several boards including IO, urology and air systems. And he's passionate about advancing technologies that drive meaningful change in patient care.

Josh and I actually met in South Carolina at UC Bio, if I remember correctly, several years ago and I've wanted to do something with him ever since. But so glad we're finally getting something done here.

How are you doing today, Josh?

Joshua Eckelberry: Doing well. Thanks for having me on here.

Etienne Nichols: Yeah. And I know we wanted to do this in person and we're going to do something in person at some point here, but thanks your willingness to do it this way.

This is great.

Joshua Eckelberry: Looking forward to that.

Etienne Nichols: I'll throw one other thing out there for those of you listening. This is while it's not in person, it is in front of a live virtual audience. We have so far, a couple hundred register.

Well, we've had 600 people registered register for this event and we have about 150 in the audience as of right now. We have people looks like from New York, Texas, North Carolina, Blantyre, Malawi and South Africa. Roland, welcome. I actually spent three months there in 2016. So near and dear to my heart, but Spain, Italy, all over the world.

Joshua Eckelberry: That is amazing. So cool to see.

Etienne Nichols: Really exciting. Yeah, this is awesome.

So, Josh, let's go ahead and get into the conversation. We want to talk about venture capital and what, what people are really looking for when they're investing in medical device companies.

But before we get into that, I'm curious, what led you to venture capital and, and you focus on MedTech and life sciences? What, what drove you there?

Joshua Eckelberry: Right.

You know, you kind of mentioned my background. Did undergrad, BioChem, went to medical school for about two years and pivoted into business of healthcare.

You know, I, I really saw an opportunity to kind of make a, a bigger difference. So, I was doing a rotation early in med school. We had this rural track program, and I can remember sitting across from this, this trucker with long hair and burly dude and I was this young 20 something year old Med student and I was like, oh, your sugars are off the chart. You really had to change your lifestyle.

I just, I felt, didn't feel like I was getting through to him. And this was in the like the Appalachian region.

And I felt like I was just a band aid on a really deep wound.

And so, I thought, you know, I want to go see what else I could do.

And I actually first left medicine to try to pursue healthcare policy and management.

And so, I was just exploring, you know, sciences, world of medicine, how could I best help people.

And then I ran into our managing director here in business school. His name was David Adair. He was also getting his MBA in healthcare administration. And we gravitated towards each other, and he introduced himself as a venture capitalist.

And I basically said, what is that?

I had, you know, my own business ventures going on, but I really, you know, fell in love with this industry.

The ability to advocate, attract capital and push as much as I can into innovations that are going to actually help people and get that across the finish line.

No one might know exactly that Josh Eckleberry helped structure and fund the Series B for this company that got them to their FDA approval. But I'll know, and I'll know that that technology on the market and all the technologies that we're investing in advocating and going into will just be able to affect millions, hundreds of millions of people in one fell swoop. And so, I call that leverage change.

I try to, you know, change that fulcrum of, of not just one patient at a Time like I felt like in clinical medicine but advocating and changing the lives of hundreds of people by getting these drugs and devices to market.

So, it really felt fit this personal, this personal like thesis that I had to try to do the most good.

And yeah, I've kept that as the center point for my career, and it's led me to some amazing things like, like adventure.

Etienne Nichols: That's, that's pretty awesome. So, when, I mean at Greenlight Guru, which is where I currently work, our goal is to improve the quality of life. And I think the people in the audience who are listening to this, that's a lot of the reason we're in this industry.

I mean there's, there's lots of reasons to be in medical devices, but the patient is really what sets this industry apart from so many other industries.

Joshua Eckelberry: 100%.

It's not, it's not the, it's not the easiest industry. You really have to have a passion and when you have that passion it makes it easier. Right. Everyone's always, even from undergrad all the way up. Psycho.

Why are you studying these harder topics? Because I enjoy it. It's what I like. It's not so hard to me when I find joy in reading and helping and advancing this stuff.

Etienne Nichols: Well, tell us about Solas BioVenture. What sets your investment approach apart? I mean there's so many different because when I think about investment, sometimes I think about. So, let's say we're a software as a medical device and so it's pure software developers and they may go straight to a, a fund that focuses primarily on B2B SaaS but they're going to do some education. I would expect there's some education as far as looking at the life cycle of a medical device and how you get it to market.

That might not be the same. I'm curious about your approach and what the advantages, disadvantages and what you look for are.

Joshua Eckelberry: Yeah, so at Solas, most of us, all of us in some way have had our own companies.

We are operator led, we say deeply engaged, you know, you hear from everyone. But we don't want to just write checks. We want to roll up our sleeves, get in there. I travel with the companies that I'm on the board with.

I help them fundraise, act as another person because we're early-stage investors. So, a lot of times we're some of the first institutional capital and we really want to help our, guide our companies through these regulatory, clinical, commercial strategies.

And so, we, you know, we try to add value to our companies. The Best we can most of the time. We're also leading our term sheets, so we like to really work with the founders and the management team to figure out, you know, what can we clean up, what can we do, what can we bring, who can we bring to the table to really set your company up for success not only with this round, but future rounds and, and, and beyond.

Etienne Nichols: What is.

I'm curious, I just want to dig in just a little bit deeper there when you come especially since you're the first oftentimes with those being the first on the term sheet, it seems like I hear more and more people talking about how there's less venture capital out there, true venture and, and it seems to be all growth.

Especially in previous years when people are kind of like the very way just there seems to be a constriction in the market.

Curious your perspective on that and what the difference is.

Joshua Eckelberry: Yeah, so I mean you touched on a big reason why you know, there's constriction in the market and capital kind of gets less, less available and therefore less risky. And the earlier stage stuff is, is riskier and a lot of venture. The natural progression of a venture capital firm is to, to grow their own war chests, their own assets under management, their own size of their funds.

And the bigger you get, the, I want to say less risky you get right. The, it gets easier the later stage you go because you're able to, to say oh you know, you, you've you done a phase one trial or now you've done your first in man.

And so, I can. There's a lot less risk on the table.

And I think venture capitalists just naturally progress to these larger rounds and these larger amounts of funds because they view that as success and then they take less and less risks as they mature.

And so, I think people have a confirmation bias of the funds that have persisted the longest have grown to a size where they end up in growth capital.

I do think there are some know early-stage investors like ourselves out there. They're just haven't built the brand so they're not right in front of you and you gotta, gotta find the right people.

Etienne Nichols: I can see it being a different talent building a company or well from a company standpoint or a fun standpoint I look at really any.

The way you build something and the way you maintain it is two slightly different I guess muscles.

Joshua Eckelberry: Oh, a hundred percent.

Yeah.

We rarely do commercial stage companies just because we believe that takes an entirely different skill set.

And the same thing kind of happens with the management team Right. There's a management team that builds and a lot of times you can kind of pass that off to a management team that commercializes and scales.

It's natural progression.

I'm curious.

Etienne Nichols: In the audience, I should have put a poll up.

I'll do that while you talk. Maybe I'll put a poll together. But I'm curious who is starting a company right now who's looking for investment?

Other people in the audience who are looking for investment capital and Zachary's looking for it. Okay, well feel free to put those in the Q and A. Just say if we can always pass things on.

But what I'm curious is you mentioned that conversation early on with it's, it's a little bit riskier for early-stage companies. What can companies do to show that they're less risky of an investment, especially for a first-time investor or the first one on their term sheet.

How are there things I could see two answers to this, one being I'm going to present myself in this way. But then the other is what do you actually do to be less risky?

So however, you want to answer, that's fair.

Joshua Eckelberry: That's fair.

Well, first off, anyone in the audience who is looking for capital wants to reach out Solas BioVentures.

Look us up on LinkedIn at myself or any of my colleagues, whether it's David Adair, Travis Manasco, Isaiah Reeves, we're a great team and would love to love to dive in.

My favorite part of the job is talking with these entrepreneurs just like yourselves and it's a passion of ours. So yeah, please reach out. That's probably the best way to do it.

Our inbox, our emails stay pretty full, but what you can do to de risk is prepare as much as you can.

We really look at the management team as some of these higher things.

We have this back of the napkin thing that I think I've talked to you about before and it's a classic solace kind of mantra.

We bring it up in a lot of our conversations and it's the dote goat float and moat. Right.

When early-stage company comes to us, one of the first things we kind of look at is does this drug or device offer therapeutic efficacy? That's the dope and that is the science. It's almost one of the easier ones to kind of de risk and look at, you know, there's it's objective.

You can say, here's my hypothesis, here's my thesis, here's my tech, here's the market and here's what you know, here's how we're going to change patient care. So, does it help people? It's patient first, patient centered.

How does this offer therapeutic efficacy? Through your idea.

And then the second, arguably the most important is the goat.

So, it's the greatest of all time or is it the four-legged, furry kind of, you know, the management team is by far one of the most important things. We kind of have to click.

Etienne Nichols: You're being a little bit more polite than when you and I were at breakfast and you were telling me about this several years ago. You said, is the CEO the greatest of all time or is he a four legged.

So, I don't know if you're. But I obviously expanded to the management team. But don't mean to interrupt. Go on.

Joshua Eckelberry: Well, yeah, you know, maybe that's my development too, is that it's more than the CEO. You know, the CEO is definitely leading these charges. They're smaller teams when we're getting involved.

So, CEO is, is, is a lot of it, is most of it.

But.

Etienne Nichols: Sorry to interrupt again. Patricia actually asked a good question. What makes that good management team or, or how. What's the criteria you look for? Yeah.

Joshua Eckelberry: You know, the, the standard answer to that one would always be the biggest indication of future success is past success. So, like your experience, what have you done have. Why are you the right person for this, this job, this team, what makes what uniquely about you, sets you up for success in this company? Do you have prior experience in this field? Do you, have you run a company like this before?

You been there, done that successfully?

Maybe you were the number two in a company that successfully did it and now you want to be the CEO.

You know, that's, that's one of the biggest answers.

Secondarily though, we always go out and meet any company we invest in. The people are the most important part.

So, we want to sit down. Maybe it's just us being Southern. We want to break bread with whoever we're about to invest in.

And it's a very telling dinner. Right. We'll, we'll sit down and we'll just notice how, how do you react to something going wrong in your meal? Or how do you treat the waitstaff?

How are you generally a good person?

We'll walk through your facilities, and we'll notice how does, how do the employees react when you enter the room? Are they heads down and like, oh no, I need to work, or are you having a good culture and relationship with everyone around?

It's just those small things showing emotional intelligence to get you to the Next level are huge indicators and, you know, red flags, green flags for us to look at because this is not going to be a linear up success path.

It's just not.

Etienne Nichols: It's gonna.

Joshua Eckelberry: It's a roller coaster.

It's gonna be ups and downs. And when things are down, are you gonna throw your colleagues or your investors or your board under the bus and just blame other people?

Or are you gonna, you know, have the, The. The forethought to say, you know, this is what's going on. This is how we're handling it. This is how we move forward and work together with everyone.

So awesome.

Etienne Nichols: I really, I really like the idea of actually eating, sitting down and breaking bread, to use your terminology, and evaluating how it's a much more. We let our guard down during mealtime. And I think when I'm at conferences, that's when I like to talk to people.

Breakfast and lunch, those are the two times when just. I just like to hang out with people. So, I think that's.

Joshua Eckelberry: Yeah, I think you eat and your, your parasympathetics just have to kick in. You're no longer. You're relaxed. You know that there's some science to it, you know? You know.

Etienne Nichols: Yeah, yeah, we'll. We'll come up with some studies here. So, Evelina actually asked a question I thought was good. And I'm not trying to be preferential to my. Towards my Tennessee people, but what does it look like working with faculty and university patents do.

What do VC VCs look for if faculty are interested in licensing or starting their own business? I can put that on the screen if you're interested.

Yeah, reading it yourself.

Joshua Eckelberry: Ooh, fancy. Cool.

Thumbs up. Yeah, happy to talk through that. So, as I was going through the dope, goat, float, moat, the third thing was the float. And that economics, it has to just float on its own, has to make sense. You have to have good margin, good reimbursement, good, good price.

You know, I would love to help all advise all these companies, but I also have to keep helping companies by making money. So, it is an important factor.

And then to get to the question at hand, the last thing that we look at is the moat, the guard around the castle here. And most of the time, almost all the time in biotech and MedTech, it's your patents and your patent life.

So, when we're working with the university or tech transfer offices or just any company really for.

Oh, uh.

Etienne Nichols: Oh, did I lose him?

Oh, well, you guys are stuck with me for just a minute until he comes back. But I'm just gonna mention there were a few questions about regulatory risk and that's something I'm curious about as well.

So, I'm gonna ask him about clinical risk, regulatory pathway and market risk in just a moment. In the meantime, while we. I'll kill just a minute to give him a chance to come back.

Are. Are there any other companies out there who are looking for investment? And I'd also be curious if there are any investors in the audience who are looking to connect to make deals.

Because this is more than just a presentation. At least I hope it is. I always look at these as opportunities for those in the Greenlight Guru audience to get together and learn from other attendees as well.

So, I see just looking in the comments here a little bit. Lewis Claus is looking for investors and planners. Nigel is looking. They have series A1 and Class IIB a little bit late, later stage, Jeff Hutchins and any others.

And also feel free to put additional questions in the Q and A.

One other thing I'll mention about the Q and A because we don't always remember to do this is in the Q and A. Even if you don't have a specific question, feel free to jump back over there and upvote any other questions.

That way we can make sure we're asking the most relevant questions to Josh. Hey, Josh, welcome back.

Joshua Eckelberry: Hey, sorry about that. I don't know I want to what technically happened there, but I'm switch to my phone just to recover as quickly as I could, so.

Etienne Nichols: Still sounds pretty good.

Joshua Eckelberry: I'm impressed.

Etienne Nichols: That's great.

Joshua Eckelberry: All right, good, good.

Etienne Nichols: Yeah, no worries. So, I interrupted you. I can't believe that you came back to the float. So, let's. Or we're on moat now, I think. Right, right.

Joshua Eckelberry: Trying to finish wrap that up. Brought it back around best I could.

And the moat, the JP.

Let me make sure I'm answering the question specifically.

But for JP, it's almost the last thing we do.

It definitely is one of the last things we kind of look at. I mean, we're looking at it as we go. But I'm no IP lawyer. We don't really have a strong IP group here.

We'll kind of look at it and be like, do a search and kind of think through it.

But once we are comfortable with all the other things, we will do a formal patent.

Like we'll hire an IP attorney and do a formal patent review.

And you know, that's kind of costly. It's kind of why we save it for. For the last thing.

And normally we ask our, our IP guys to give us kind of a scale. We'll say like 1 to 10. How investable is this? How defensible is this? And if they're in a 7 to 10 range, that's normally pretty investable.

And then anything below, we, we kind of have to take a step back and talk through that.

Maybe, maybe look to get a freedom to operate or something to really make sure that someone with more money, more time doesn't come and just knock you off the road here.

So, yeah, that's how we approach IP right now.

Etienne Nichols: Okay.

And I want to get into regulatory risk in a moment.

Actually, let's just go ahead and do that. Do you, how do you evaluate clinical risk, regulatory pathway or market risk from a CPT code standpoint? Or do you get into that level of detail? How do you, how do you evaluate regulatory risk?

Joshua Eckelberry: Yeah, we're normally pretty early stage and a lot of that stuff is changing in real time right now.

But you know, you, you can de risk clinical and regulatory with the right advisors and the right study to design for a clinical. We're really looking hard at that study design endpoints, what you are, what you're trying to achieve and trying to prove. You know, working directly with the FDA, getting, getting some feedback on it. Those are ways to de risk it.

And then ultimately you can, you can really de risk it by finding the right, the right advisors, people who are on those CPT panels or those Category 1 panels who have gotten ideas through before. You know, I'm thinking specifically neurology.

There's a really famous guy, Dr. Dan, who has just done a great job with several companies in reimbursement.

And you know, if we see him as one of your, as one of your advisors, we're kind of like, okay, yeah, I trust his statement. You know, there's, there's some key opinion leaders in, in each of these categories that if you can bring them to the table, have their kind of seal of approval, it can go on in, in de risking, not only de risking it from a, a funding standpoint and us at VCs, but from a market adoption standpoint. You know, what are other clinicians and other, other decision makers who, who are they following and, and, and, and trusting in their, in their, in their individual fields?

Oh, you're muted.

See you talking.

Etienne Nichols: Yeah, thank you. Wow. Freaky mistake.

Joshua Eckelberry: Classic.

Etienne Nichols: It's pre2020. Now in my mind, I'm actually an advisor on one medical device company and I thought it was kind of a Random. I've had a couple people come to me and ask for that case.

Only one that we've actually formalized that agreement. But it's interesting to me when that conversation comes up because I'm not as familiar from your side. How do you.

Or it sounds like you are a proponent for that sort of thing from a regulatory advisor on the board or a quality advisor on the board. What do you. Maybe if you look at that whole board of advisors, how do you assess that? Besides just knowing the person or looking at their credentials, is there certain, I guess, areas of knowledge that you expect to see there?

And on the flip side of that, I'm curious about when you look at how they're being compensated, whether through equity or honorariums at certain milestones, et cetera, are there certain things that you see as more positive or negative when it comes to those things?

Does that make any sense?

Joshua Eckelberry: Yeah, I think there's two questions in there maybe that, you know, how do you.

Etienne Nichols: Let's start with the who to have on your advisory board.

Joshua Eckelberry: Who to have on your advisory board. Right. This is a, this is a small world. In a smaller industry, it would be hard pressed not to have someone with a good CV that doesn't have a direct connection to someone else that we know. And so, it's just that classic diligence check of.

If you've worked with this person before.

I trust your opinion. I've worked with you. What do you think of them?

You know, your reputation goes a long way, right?

Reputation is everything.

Etienne Nichols: Yeah, yeah. And I don't mean to cut you off. I'm. Let me, let me nuance my question a little bit more so more, less about the qualifications of the person, more of the vertical that they're in. Are there certain verticals of knowledge? And when I think of verticals in MedTech, I think of like regulatory quality, maybe even distribution and reimbursement. You mentioned reimbursement. Are there certain ones that I. Of course, I guess it depends on the level. Depth of knowledge of the C suite or.

Joshua Eckelberry: Yeah, yeah, yeah. You.

Okay.

It depends on the depth of knowledge you, you have in the C Suite, it's true, but also depends on the stage of the company where you're at. You know, early stage is a little more engineering design verification studies.

And the later you go, the more you need that reimbursement strategy. And there's. There are great CROs that can fill these gaps for a team.

The, the C suite and the management team we like to see is kind of like the Best I can think of is like a Navy SEAL team, right?

And on the SEAL team, you'll have expertise. You know, hey, I have one guy who really knows this, this pillar, this expertise. But he's more than that. He knows, you know, he's second in, in clinical and regulatory. He's sec, you know, third is his expertise in the engineering.

And there's just, you know, multi, multidisciplinary intersection between the team where they can really help each other out.

That's something great to see, is something we kind of, kind of look for, is like diversity of thought in that way and building a great team.

Etienne Nichols: Yeah. Whoops. I didn't mean to do that. But I guess, I guess if you want to answer that question, I didn't. I'm getting click happy over here.

Joshua Eckelberry: Sure, sure. Patent Team Assess freedom to operate.

So, on our, on our skill sets, our patents, like I said, we always bring in a patent attorney and we look for someone who's done work in that field so that they can, they know how to assess.

How do we. There's, there's an actual designation you can get from lawyers called an FTO of freedom to operate.

And it's, it's a formal, like, stamp of approval from that law firm saying, I believe, you know, I'm, I'm signing off our law firm's name to say that you have the freedom to, to run with your, your company. They're, they're pretty expensive, but if you have questions in your ip, then it can be beneficial and can really.

You know, we were talking about ways to de risk, and that's one of the bigger ones too.

Etienne Nichols: Yeah.

If we kind of go back a little bit earlier in the conversation we were talking about that, you mentioned good and bad study design and ways of de risking a company, or maybe not de risking, but raising your confidence level in the company.

Are there certain specifics about that study that you see as good versus bad? And how do you, how do you determine that?

Joshua Eckelberry: Yeah, that's.

I've, I've gotten into companies where we've, you know, set up a clinical design, and it turned out the restriction criteria was just too tight.

And so, it was almost too hard to recruit patients because we just couldn't find the right patient.

So, bringing in physicians in that field who are going to be doing the work can really add value on whether or not you can even recruit to get this trial done.

Right. Because it's, it takes time and time takes money, and we can have this great idea for a product, but if we can't prove that it's safe and it works, then we're not gonna, we're not gonna go far. So, it's, it's, it's a delicate balance between.

You have to make sure that your exclusion criteria isn't too wide, where you're accepting people that could throw off your data. But, you know, you want the right patients, but you don't want it so tight that it doesn't fit.

And so, it's more of an art than a direct science in a lot of this. Right. It's the practice of medicine. It's the.

What are the right patients?

Are we, are we meeting the right endpoints?

Yeah.

Etienne Nichols: Is that something that someone on your team evaluates that study or they look at all the details or you have somebody.

Joshua Eckelberry: Oh, yeah, it's part of our diligence. You know, when we go into, you know, depending on the stage of the company, when we go into it, a lot of times they'll be in the data room.

Some of the, the protocols that you have.

And you can also sit down with the FDA and say, does this make sense to, to you guys? You can, you can have them sign off on, on a lot of these ideas that you have.

Etienne Nichols: So, a pre submission or conversations with the FDA sounds like that is a, a confidence booster.

Joshua Eckelberry: Oh, yeah, definitely. Can get a letter from them saying agreed. Then we're like, okay, that's something we look for in the, in the diligence room too.

Etienne Nichols: Yeah, we like your product code, et cetera, for your predicate, et cetera. Yeah. Yeah. Okay. Okay. I'm jumping around a little bit too much and apologies for that. I don't mean to do this, but going back to the advisor, just because I see Jim question in the chat there, What's a typical option size as compensation for a key advisor? Or is that something you're familiar with?

Joshua Eckelberry: Yeah, we pulled data from a database called the Lander to kind of reference off of.

Yeah, they do compensation data and kind of, they do a, a poll and have people reply back a survey and then they report those surveys and there's some specific to med devices and there's some that are specific from a range.

We'll, we'll refer to that for a lot of our compensation data.

But you know, if the question was, you know, for key advisor, if this is, you know, someone who sits on your board and is like, is the, is the main guy on board here, it can get as high as 1%, but normally, you know, somewhere in that like 0.1 to 1%, depending on how far you guys are, how, you know, how he is this individual to you. You know, don't want to cheap out, but you want it incentivized to do work for your company. And if a lot of times you don't have the capital to do, you can make that up with some equity grants.

Etienne Nichols: On that note, if we just go one level deeper because, or not deeper, but necessarily maybe an additional to it. I have some companies come to me. Well, it's maybe a stretch to call them a company. A physician who has an idea, maybe even a patent. They have a certain amount of money invested. Yeah. And they're looking for a CEO.

They just want a CEO to take over the company and run with it. And they say how much equity do I give them or what do I pay a CEO?

I don't know. You have some data on that, but I don't know if you could give some criteria or some way of establishing that number.

Joshua Eckelberry: Yeah, you know, I hate throwing numbers out there. I know people to me later is kind of my biggest reason I'm, I'm, I'm like slowing down here.

But we can see CEOs, you know, upwards of 5% in their equity grants for being the CEO.

You know, again, this number is 3 to 5% early stage, later stage, how much they grow.

But typically, when we put together a term sheet, we're trying to, we'll also put together, carve out for the management team a specific option pool. An option pool is anywhere, you know, let's just say 15% around that amount and out of that 15%, you want to, you want to divvy that percentage up amongst your entire management team to properly incentivize key advisors.

Anyone, you know, good employees.

Your C suite, that, that number is, is highly variable though. So yeah, yeah, happy to talk one on one on a case basis with people, but generally, yes, a CEO close to 5%.

Etienne Nichols: Well, it looks like there's a lot of early-stage companies in the audience who are looking for investment. So, I guess feel free to reach out. I don't want to flood your inbox necessarily, but if, yeah, feel free to put those questions in.

The one other thing I'll mention to those listening, if you want to put all the questions that you have, we're not going to get to all of them. I can't get to all the ones that we currently have.

But what we'll do is I can pass those on to Josh if he's willing and able to look at them, you know, at his leisure. Maybe we can get some of those answered and, and maybe we could even work together and come up with some articles or white papers.

Joshua Eckelberry: There's a. If there's a way to reach back after this, I'll sit down and answer all these questions. Sure.

Etienne Nichols: Keep them coming, guys. Keep them coming.

I'm curious about something and that is what are some of the top reasons you've turned down companies? I can see it. I could pontificate about ideas. Oh, it's just not feasible in the industry or whatever.

But you already mentioned that sometimes it's too early to really tell what CPT code they're going to use, what predicate, whatever. So, what are the things that you look for as an early-stage investor and say, these are the things that I turn down for these reasons?

Joshua Eckelberry: Yeah, I mean there's, there's some, there's never a fast yes.

So, the best thing we feel we. The second-best thing we can tell you as a VC is a fast no.

Etienne Nichols: Yeah.

Joshua Eckelberry: And the reasons behind it. Right. Number one thing we can tell you is yes, here's money.

But it's not going to be quick. We're going to slowly get to that conclusion.

So, a fast no can have a lot of reasons behind it.

Maybe it's just not something we feel we can add value to. One of the bigger reasons is kind of the lollipop eyes of a CEO or a founder who thinks this idea is worth a billion dollars and is going to use this idea to buy an island and retire in a few years.

Just some unrealistic goals and ideas is one of the bigger reasons we run into. Right. Because we'll get down to term sheet negotiations, explain our case and just can't get to an agreeable number.

That's a reason that it gets further and then turns into a no.

Sometimes it's the IP. It's not just defensible. Since we talked about that, that's a reason for a no. Sometimes just not in a good fit for Solas. Maybe the timing's off.

Right.

Maybe we're between funds or we're in the later stage of our fund, or we're in the early part of our fund and we're just pressured into looking at different stage companies.

You know, maybe you have a great company that we would have invested in a few years ago, but now our, our incentives have just changed. So, it's nothing to do with you and everything to do with us.

Sometimes we say, I'd say the number one reason we say no is just out of our, our scope you know, not in our thesis we have. There's just a lot of ideas that come by that we don't do like orthopedic and spine right now.

It's just not in our expertise of here at Solis we feel like this is a different strategy than what we have.

What we know a lot of ideas are commercialization stage. That's not something. We're still early-stage investors.

Not really like growth capital.

So, we look for life saving ground changing ideas.

We don't do, you know, Class I devices.

We really want Class III, if not Class II, you want one of those heavier high risks. We feel like we can really manage regulatory risks well here and it served us well.

Etienne Nichols: What about De Novo?

Joshua Eckelberry: De Novo's great too. Yeah, we'd love to take a look.

Etienne Nichols: Yeah.

Joshua Eckelberry: You know and sometimes we just say no because we don't feel like the team behind it has.

Has the right skill set, you know, or it's just not the right. Right people.

Etienne Nichols: You mentioned a couple things in there that I think is interesting. Particularly the higher risk. I guess that ties back to the moat when you're.

The dots floats moats, goats the moat of having a higher risk or a Class III device would make sense as far as something that.

Would that be accurate way to kind of classify that section.

Joshua Eckelberry: Say that again it was. Is it a. Yeah.

Etienne Nichols: Having a Class III medical device, it gives you a little more of a.

Joshua Eckelberry: Moat than definitely a Class I, you know, higher barrier.

Higher barrier, exactly. And there, there becomes a disconnect in the market when less people can do it.

You know, there's.

It's an arbitrage opportunity and you get paid for that. So, we like to take advantage of those.

Etienne Nichols: So, you, you kind of mentioned what you don't do. You know, this specific firm, Solas doesn't. You know, right now you're not pursuing this and at different stages you're going to be looking for the growth early stage.

Are there ways that.

I mean, I love that you want to get to a fast. No. But sometimes I guess when A maybe a CEO's trying to raise funds, is there any way he can get to that fast? No. Just by looking at that firm or I suppose there's probably thesis on your website and so on.

Yeah.

Joshua Eckelberry: A lot of venture groups will post portfolio. Right. We want to be cheerleaders and advocates for all the companies we go into.

And so, if you look at their portfolio and you say oh here's some trends I'm noticing, here's what they're investing in.

Look at their most recent funds or successful companies that a lot of times will tell you, oh, they've been there, done that, right?

They've likely sat on the board or seen this company go from their series A, their series to their M and A or their IPO.

And you know, you, you want, there's a tendency a lot of times for CEOs to just, or management teams to really just want the dollar, just get the investment.

But I would definitely encourage you to look at who's the right person to take the dollars from because if you're pitching, you don't want to waste your time. So, you don't want to pitch to someone, a random VC who doesn't even know medicine, doesn't devices, doesn't do any therapeutics or you know, nothing even adjacent to it.

They're not going to, that dollar's just not going to add more than, than a dollar. It's, it's going to create probably more headache than help in the, in the long run because they just won't understand.

They'll be pushing you for, you know, why don't I have my return on investment yet? And you're like, well these take time.

Where's the revenue?

Oh, we're not there yet. You know, there's just, you really have to have more sophisticated dollars. So, take a look at their website, take all you can from it. Look at their portfolio.

Have they done medical investing in the past?

Have they done investing in your space?

See if they're invested in competitors. You know, maybe you don't want to pitch them some of your confidential or non-confidential information if they're already invested in the competing product.

So do your own due diligence beforehand and it'll save you a lot of time and money.

Etienne Nichols: I've heard other things as far as don't bother sending an NDA. It just is that is do you look at it, is that something that matters or not?

Joshua Eckelberry: Yeah, I don't know. I've never had a. In the seven, eight years that I've been doing this now, I've never run into an NDA problem where you know, someone challenges it or anything. So, I don't know how. And I've heard they're not too defensible.

So, I think you'll do better by doing your diligence up front.

At the end of the day, I am looking to make investment into your company. I'm looking to buy a piece and be a part of your company and I need a level of trust.

And if you're holding back on Me and we can't speak candidly or you don't trust me enough and you're like, I need to sign an NDA before I even tell you high level about my project.

You should have the IP kind of down or you should have a level of trust with someone you're trying to sell a piece of your company to have a candid enough conversation.

I don't want you to tell me every little detail in the secret sauce and the reason behind it, but we need to at least have a front end, non-confidential conversation that's genuine and can get my attention enough to, you know, be on your team.

So, it's, it's a balance. You know, I wouldn't right off the bat request an NDA before we even talk because I have to sign a lot of NDAs, but I do it before you ask for data room. That's kind of a natural inflection point to say, you know, hey, we've had some great conversations. I want to take it to the next level. It's not a, it's not a no. So, let's sign an NDA and get into a data room and really dig into the, get into the weeds of this company.

Etienne Nichols: So that's what you used a phrase that I really like and that is I'm going to buy a piece of your company or that's what I'm looking for. And I don't know that that's always what people are thinking that I'm selling a piece of my company.

And maybe I could be wrong about this, but I'm curious if you have any suggestions on mindset shifts on how to look at those things.

Yeah, I'll start there.

Joshua Eckelberry: Yeah, yeah, that's a classic, you know, Shark Tank kind of what we do. At the end of the day, if you look up Founder's dilemma, it's a classic thing of you can own 100% of your company and it can be worth as much as you think it's worth, or you can sell half your company and we can get some working capital to grow it to a larger piece.

And you might at the end of the day, Series D only own as a founder, get, get down into the tens, percentages and, but that, that dollar amount is worth a lot more than when you originally started.

So, it's a, it's a balance of, of getting there, getting it done.

And personally, you know, I have, I have seen some founders run into that problem of I don't want to give up too much of my company. You know, that's, I feel like my, my product is worth more.

The term sheet is not fair, and you know, at least us at Solas, it's a roller coaster and you're going to go through some ups and downs and sometimes those downs, you know, we're right there with you. A lot of times the early-stage capital, sometimes you have to make those hard decisions to let go a lot of your company just to get it to that next stage.

And we always advocate at the end of the day, whether it's a bonus or increase in the option pool, we want everyone to be properly incentivized and aligned for success of this company.

So, I think people are a little too sensitive on their prices and that ends up hurting their company as opposed to let's get the right capital in and let's get to the next step and let's get this product into patience and make a difference and then there's no sin in also making some money.

Etienne Nichols: You know, I think I'm just trying to work through why would somebody say well that's, that's not, that's too much my company. I mean, obviously there's an emotional component of that, but I also think there's a lack of knowledge and knowing where to get that knowledge.

And I could be wrong about this, but I'm curious where you have your places you go to find, hey, this is what X amount of the company should be worth at this stage with this level of expertise and this level of patent protection, et cetera, where could a founder go to get that information, to really make an informed decision? You know what, realistically I'm at the end of the day, I'm going to own X amount X percent.

If I follow the industry guidelines like as a CEO, I shouldn't expect a million-dollar paycheck for an early-stage company. There’re places to go to look, see what kind of salary ranges you should truly expect.

But where do they go to find the information about how much equity to give away?

Have a one-on-one conversation?

Joshua Eckelberry: Yeah, yeah. I mean it is a case-by-case basis, and it is an emotional question.

Business a lot of times shouldn't be emotional, but it is, you know, it is an emotional thing. It's, it's your, your baby, your idea you've probably worked on for years.

And it's, it's hard to give that up.

It's, it's hard to, to say that this baby is ugly or you know, come to that realization or you know, when it, your company grows up, you have to you have to give it more and more responsibility on its own and kind of let it go.

And that's just hard for some people.

As far as like, you know, this is a fluid industry. There's no, there's no industry.

There's no, there's no like X, Y, Z. This is what's fair, this is what isn't.

It is a dynamic market dependent on macro events, industry events, you know, field specific.

Whether it's, you know, urology or cardiology or neurology, they each ebb and flow and command different prices and different, different endpoints.

We, we sit down and have that conversation with, with founders and management teams and it's explained our rationale and try to educate. But surrounding yourself with good advisors, looking towards people who've been there and done that and what they've experienced, you know, people are generally willing to help out, especially you know, an entrepreneur to an entrepreneur or founder to a founder or clinician to a clinician. Find people who have done that and gained from their experience.

You know, it's one of the biggest advantages we have as humans is to, to lean on each other and stand on the shoulders of giants. Find those giants and get their advice.

Etienne Nichols: Yeah, I love Nicholas in the comments say connect with founders who've done it before. And I think that's a great, great suggestion.

One thing that I do want to ask about because this was asked and I think this is important to think about, is the type of money we've Talked about that SaaS B2B fund that might not know the regulatory hurdles that they're going to have to go through.

So, you're going to have to go through a lot of education.

What about other types of money?

Primarily we're talking about venture capital. What's the benefit of venture capital versus going through other.

Maybe it's different stages, you tell me, but family, office, angel investing, et cetera.

What are sometimes that you should look at different types of money from different places?

Joshua Eckelberry: Yeah.

Early on journey, if you have just an idea, you want to look towards angel capital, that's some of the earliest, highest risks kind of funds.

A lot of times it's friends or family, but there's also angel groups out there who are just looking to be that literal first check. You know, I mentioned earlier that we're a lot of times the first institutional check, but we are, we're not necessarily the very first check. You know, there's angels out there and.

Etienne Nichols: If there's anyone out there in the audience who does need a first check for your. If you're especially in your, in the, the Nordic region. I know somebody who's interested in that who follow does the angel fund.

You just made me think of him. But yeah, go on.

Joshua Eckelberry: There's a lot of high-net-worth individuals who have made their money and were an entrepreneur at one point and they love to give back to the community.

Or maybe it's a rich uncle or it's you know, a grant from your university or a lot of times in, you know, maybe not so much now, but there's federal grants.

There can be, there can be, you know like maybe Parkinson's idea, you can go to the foundation money.

There's just a whole host of different pools of money and capital for each stage of your company and finding out what's, what's the right partnering group. Corporate venture capitalists.

As you grow, anything you can do to get to that next stage.

Second mortgage on your house. You know there's.

Etienne Nichols: Yeah, I heard one person say I won't invest till they've, you know, invested half a million of their own. I don't know, it's just, I don't know how I get that.

Joshua Eckelberry: Because you want some alignment, you want some skin in the game.

But on the other hand, that's just not feasible for everyone. You know, someone who has ten grand in their company and who just doesn't have much, that, that can be a lot to them.

Etienne Nichols: Yeah. As a percentage of net worth maybe. Yeah.

Joshua Eckelberry: I don't know. Percentage of net worth is what I personally like to look at because just you know, 500,000 right off the bat is just, it's not doable for most of the world.

Etienne Nichols: What about family office? Are there any advantages or disadvantages going this way or that way there?

Joshua Eckelberry: Well, yeah, there's definitely some advantages. You know, family offices a lot of times are. Can be mission driven in our, in our industry we're the original impact investment. Right. So, if you have.

I've met family offices who are just looking to invest into pediatric innovation. If you have an idea that's pediatric, you want to you know, talk to those family offices. They can be range in sophistication just like venture capitalists.

Honestly, they can range from kind of dumb dollars to very strict and very helpful groups. It's a, it's a mixed bag. So.

Etienne Nichols: Yeah.

Couple rapid fire questions. I know. So, I think let me check my calendar, make sure we did schedule 90 minutes. I hate to make you talk for that long. So, I'm not going to make you but I do want to kind of take advantage of the time we have for a little bit longer.

Joshua Eckelberry: I'm here for it.

Etienne Nichols: One, one of the things I wanted to ask about are the industry events at the FDA because oftentimes our industry or our audience at Greenlight Guru is pretty tied into the quality and the regulatory side of things.

What do you.

Have you seen anything that's detracting from your willingness?

Well, have things that the FDA made you not want to invest in, say 510k for example, due to the change in reviewers cutting staff earlier or anything like that? Any industry, things that are changing your mind about certain things?

Joshua Eckelberry: Yeah, there, there's a lot of things going on.

The only thing I can say with 100% certainty at the FDA is that I can't say anything with 100 certainty about the FDA.

Etienne Nichols: That is. Wow, I'm going to quote you on that one.

Joshua Eckelberry: You know, it's, it's, it's. You just have to have your ducks in a row.

Don't ask too many questions and just answer their questions as scientifically as you can.

Is there anything that's attracting us as Mr. Cash?

Maybe some fringe people who aren't specifically like our thesis is medical devices and pharmaceuticals. So, we know that that's a risk. We're going into it, so we look at the risk.

We've kind of shied away a little bit from vaccines recently, but it doesn't mean that we don't still want to invest in that space.

The, the fringe venture though, I definitely think it has kind of pushed them away from, from this idea right there with markets like Certainty and like to know what's going on.

So, I think there is a lot of sideline money right now saying okay, what is this administration and the FDA, how is, how does this settle out? What are some of the new changes, positive or negative?

They just want to know at the end of the day what the path is going to be or what the changes are going to be.

I do think it is negatively affecting the industry, but I think in the long run science will win out and we will.

The pendulum will swing the other way eventually.

Etienne Nichols: Yeah, I think that's a good answer. Any. Are there any technologies or trends in MedTech that you're really excited about right now?

Joshua Eckelberry: I personally lead up the AI and data collection and kind of the tech med forward.

So, things devices are becoming more and more software enabled and that's kind of what I really enjoy digging into and getting into. You know, parsing out what is just some algorithms and claiming AI and some really deep Understanding connected to our medical databases and how can we really leverage up this big data.

And now we can crunch it and get to some actionable all items here. That's. I, I love looking at that. We have three different AI powered companies at Solas and I've, I've done a lot of work with and I just, I'm really excited about where that industry's going.

Etienne Nichols: You know, I want to ask you my. Okay, I want to run a theory by you and get your take on it then if that's the case with your AI experience.

So, I've had companies pitch me and they pitch me from a different perspective. I'm not investing in companies, but they're interested in.

What do you think is this. There's some market viability in these different aspects from, from my experience with quality and regulatory and some companies are company coming with their AI tool and saying look, we can do your.

Let's just say we can automate a report for you of some sort, so it goes through and looks at your data and generates this report.

And I look at that and I think to myself, okay, this is cool. This is great. This is make a hunter ride a report. But there's an expiration date on reports in general.

Especially if the FDA is coming up with an AI tool that's going to potentially use an AI to review your data. Why would you not have an AI to just talk to that AI on the same level is that I feel like we're in this HeadTech 2.0 where we're trying to bolt on AI and there's this other MedTech 3.0 that's completely different and going to change the way we think.

I don't know if you have thoughts on that.

Joshua Eckelberry: Yeah, yeah. Parsing out, as you put it, that 2.0 versus 3.0 is a fun part of my job right now. It's like what are some ideas that are just trying to tack it on versus fully integrated and really taking advantage of the opportunity at hand here?

Yeah, I enjoy it. I think it's going to be a big part of the future. It's part of my thesis here that I've developed out.

Finding can really help us with these subjective data points in the past and really bring some objectivity and linking some reasons why we've had really cool stuff fall out from our companies that just is mind blowing.

Etienne Nichols: Just saw Evelina in the chat talk about Launch Tennessee is hosting in Nashville. Oh, in September. Yeah, definitely. Okay, I'm going to try to attend to that. But anyway, that's different.

So, I do want to ask you one other question and follow up on that.

Do you have any, can you share any examples where maybe that you can see a company that. Is that AI, Ford or I, I like 3.0. I don't know, whatever terminology is going to stick here where, you know, that's.

That, that is a future Ford company versus just bolting it on. For example, I like to use the example of AI being kind of. We probably all heard this AI kind of being like electricity.

So, if instead of taking two prongs and I'm gonna, you know, fry a piece of toast this way, you actually make a toaster and it's fully integrated. No, it's not an electric toaster.

It's just a toaster.

And yeah. Do you have any examples in the medical device world where that's happened?

And actually, yeah, go ahead.

Joshua Eckelberry: I'd love to brag on our companies for a bit too. Yeah, that's.

Etienne Nichols: Let's hear it. Well, anything you're allowed to say, I recognize.

Joshua Eckelberry: Right, yeah. Without while being so respectful to the companies.

We have two great AI companies on the board for IO Urology, and it is the front door for urology.

It's a handheld device that you void through, and it'll tell you your flow rate, volume, time, frequency. Just about 20,000 data points on your void.

And then we can use this data to tell all sorts of things. It's crazy, right?

I can think theoretically of all these metrics and all these points like, oh, yeah, if you could link it to acceleration and flow rates and all these points. But when we got down to it and we did it, we did some AI stuff, and we linked it to some of the patient charts.

It would say things like, recommend for neurological evaluation because turns out the bladder can have essential tremors before the rest of the body does.

And the urinary tract, the lower urinary tract can, can pick up on that. And it's just something I would have never linked Parkinson's to urinary symptoms.

But a computer or our AI system can really find these, these connections and these points that our fringe thoughts and ideas.

Another one that we are, I love to talk about too, that I help out with, is called Vector Medical.

And they're able to take 12 lead EKGs and map your cardiac arrhythmias.

So previously that had to be done, you know, catheter based, stick something up into your heart and really get the electrical signal of the heart and map out. But now we can use our AI to say, hey, this 12 EDKG is showing arrhythmias in this region of the heart and give you a virtual map of that without having to go to a cath lab.

I in love with both of these companies. They both have kind of different AI applications and systems to them.

You know, they bring objectivity to a previously subjective field, or they make the clinical practice just an easier and more fluid, fluid step to help patients. So, these are just some of the close companies.

We have another one called Pathware that is Pathology AI. Right. It's your, your standard.

You know, it's a, it's a, we invested in this years ago, before AI was really this big buzzword and it's really just grown since.

And what can do is just take your pathology slides and tell you what, what the cells are, what's in it. And we're not necessarily saying this is what you have, right?

It's not gonna, we're not gonna diagnose, but we're gonna lead urologists to be able to scale easier, better point them to where to look because we believe, you know, we can identify these cells quicker and they can kind of just sit back at home and swipe, yes, that's cancerous.

No, that's not, yes, this is that cell. No, it's not that cell. And just make the practice of medicine smoother.

Etienne Nichols: Yeah, I love that, and I imagine so this, you may not be have privy information of this, but I would imagine those companies who are building those AI tools have probably implemented AI in their own workflows as well.

They're probably one of the best practices for, for the utilization of AI in their company.

And so, the reason I bring that up and mention it is a lot of people listening. Probably they're like, I'm not developing an AI tool. Maybe it's helpful to know, okay, are there ways you could implement AI in the future to make your tool a little bit better?

But let's face it, a lot of companies aren't going to be able to, aren't likely going to do that.

Are there things that you think, man, this is the way a company is going to operate differently though in the future?

Products agnostic.

There are certain AI things and maybe as an investor, do you care about that?

Joshua Eckelberry: You know, you know, honestly, it's not something we have looked at yet on our, our diligence checklist, but I might be adding that now.

What are your managerial or task specific AI for your company? That's a great one to add, but to be honest, it's still A new field, I think, you know, ChatGPT is coming out with new tools every other month. It seems like it's getting more and more sophisticated.

Here at Solas, we're playing with it, with our own diligence and our own spreadsheets and our own internal reviews.

But right now, to be honest, even I am still at a stage where I am playing with its efficacy.

We've put in policies in place where we have to have someone sign off on everything. Right. We really don't want someone just to do these language models and then send it out.

You really got to check because it doesn't get everything right. And I think it'll have a space. And it does have a space.

With most of us here in the team, we use it in several ways. Whether it's writing an email or, or doing diligence quicker.

It's, it's going to be part of the workflow. But I think it's still new enough that those tools are still being developed. And what the. Right.

Whether you use them, you, you will use them eventually, but whether or not you're using them right now to do it, I, I don't, I don't think it's going to be a requirement.

Etienne Nichols: Yeah, I think we're still early, too.

That being said, I do think.

Well, I just saw a company recently in the news talking about how we've probably all heard how engineers may use AI to write certain code. And so people are trying to eliminate that.

Well, another company is looking to the future and saying, hey, if this is the way it's going to be, let's, let's embrace that in the interview. And we say, okay, here's an AI tool that you can use during the interview to write whatever code.

And so, feel free to use the AI tools at your disposal and let's see what your code looks like. And I thought, I mean, that's, that's forward thinking, I think. And it's.

Joshua Eckelberry: Yeah, that is.

Etienne Nichols: Yeah.

Joshua Eckelberry: Luckily, every day I have, I've played with it, but it's all right.

Etienne Nichols: No, no. Yeah. If anybody's out there has suggestions. I love learning more about these different things. I am insatiably curious. I recently learned that my mom did not actually think I was rebellious as a child.

She thought I was way too curious. Since that was such an interesting revelation, I thought. Justification. Yeah. Let me think. Are there any other questions? I mean, there's so many questions.

We're going to have to send this to you and see if you're able to plow through These. Maybe we'll come up with a, a working document or something here. I don't know. If there's one thing I want to ask, I guess last thing, just. Are there any events you'll be at or recommend?

Hey, this is a great networking event because you already mentioned how important the network is. Any place really recommend. Hey, if you're early stage, you should probably check out these different places regionally.

Joshua Eckelberry: You know, there's saw launch, Tennessee put in there. Yeah, out there. 3686. I will unfortunately not be there this year because I will be at LSI.

Etienne Nichols: Oh, that's the same week.

Joshua Eckelberry: It's the same week. It's the same week. Okay.

Etienne Nichols: I'll be at LSI as well. So. Yeah, go ahead.

Joshua Eckelberry: Good, good. We'll.

Etienne Nichols: We'll.

Joshua Eckelberry: We'll connect again. It takes going to a different country for us to see each other in person.

Etienne Nichols: I know, I know. Maybe. Where do you fly out of?

Joshua Eckelberry: Atlanta. Atlanta.

Etienne Nichols: Okay, well maybe I'll fly out of Atlanta. Just maybe we can fly together anyway. Okay. Yeah. Where else?

Joshua Eckelberry: Yeah. So, LSI has an event, it's in Dana Point, California every year. We always show up to that and we always do those 15 minute. I unfortunately I only make it to a handful of the actual events because here at Solas, we're really there to connect with entrepreneurs at those events and we spend 80 to 90% of our time on those partnering, just talking to everyone who wants to talk to us and telling them how to connect, what the next steps would be, or free advice take for what you paid for it.

But that's what we, that's what we do at those, at those events all the time.

We also go to JP Morgan. It's a pretty big industry one. I'm just kind of naming the higher-level ones because I can't always commit to these closer.

Like Life Science Tennessee does a great conference, but I try to help out every year, but you know, like 3686 is the same time as LSI. So, we're prioritizing Life science intelligence.

Etienne Nichols: Do you go to; do you go to MedTech Conference by Advamed?

Joshua Eckelberry: I have in the past. It's not on like our, our reoccurring one right now, but that's been one that we have some kind of presence. Whether it's me or one of the partners.

We try to go to as many as possible, but there's just, there's so many conferences out there that sometimes we're in the middle of a deal or head down or fundraising ourselves, and it just depends on the cycle.

Etienne Nichols: Yeah.

Well, this is great. Where can people find you? I had somebody ask in the comments, how do we get in touch with Solas? So, we'll put that in the email, but I guess feel free to mention for those listening on the podcast version, how can people find you and get in touch?

Joshua Eckelberry: A hundred percent.

LinkedIn is probably the best way.

Yeah, just reach out to any of us on LinkedIn. Look up Solas BioVentures. I think that's the only real social media platform we use as a firm.

We try to push out, whether it's our portfolio companies or our personal or events like this. We. We put out there.

Look to me or any of my colleagues, send an invite, send a message, and we will. We will try to get back to you.

Etienne Nichols: Okay. And if you any reason you struggle to find Josh's email, feel free to email me or anyone at Greenlight Guru, and we can forward that on as well. We'll be forwarding on the questions and hopefully we get some kind of answers.

But we're also working on an article with this and, and we hope to work with Josh on that, so maybe we can weave a lot of this in.

Joshua Eckelberry: All right, Josh.

Etienne Nichols: So, yeah, really appreciate this. It's a really fun conversation for me, and hopefully it's been valuable to the audience. And yeah, those of you been listening, you've been listening to the Global Medical Device Podcast.

We hope to see you next time. And until then, take care.

Joshua Eckelberry: It's fun. Thank you for having me.

Etienne Nichols: All right, and we'll just snap that for the. For the podcast section, guys. Really appreciate y' all hanging in there with us. Stefan, Christine, Melissa, Santiago, it's been really good. You guys asked a lot of good questions, too.

All right, I'm going to go ahead and get backstage, and I guess I'll see you back there. Thanks, Josh.

Joshua Eckelberry: All right, thank you, everyone. I'll reach out with those questions.

Etienne Nichols: Thanks for tuning in to the Global Medical Device Podcast. If you found value in today's conversation, please take a moment to rate, review, and subscribe on your favorite podcast platform. If you've got thoughts or questions, we'd love to hear from you.

Email us at podcast@greenlight.guru.

Stay connected for more insights into the future of MedTech innovation. And if you're ready to take your product development to the next level, Visit us at www.greenlight.guru.

Until next time, keep innovating and improving the quality of life.

About the Global Medical Device Podcast:

The Global Medical Device Podcast powered by Greenlight Guru is where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge, direct from some of the world's leading medical device experts and companies.

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