Tips for Startups: Secrets from a VC | elemed

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Tips for Startups: Secrets from a VC | Diana Saraceni | Panakes

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✨ Introduction

Welcome to another exciting episode of Career Diaries by Elemed, the podcast dedicated to exploring careers in the MedTech industry!

Elena met with Diana Saraceni, co-founder and Managing Partner of the renowned VC firm Panakes Partners. This episode is a fascinating exploration of what VCs are looking for, the best way to ask for investment, which technologies are HOT right now, how startups can really make money, and much more!

Understanding Panakes Partners

Panakes Partners is an independent VC firm specialising in series A and series B rounds of funding, with potential interest in seed and later-stage companies. Operating mainly across Europe and Israel, Panakes exclusively invests in life science companies, including digital health, diagnostics, medical devices, and biotech.

Diana's Journey into Medtech

Diana’s background as an engineer with an MBA led her into consulting and investment banking before venturing into the world of venture capital 23 years ago. Initially focused on digital investments, Diana’s passion shifted towards medical devices when she identified the untapped potential in the MedTech space.

Founding Panakes Partners

About seven years ago, after co-founding another investment company, Diana and two other co-founders established Panakes Partners. Over the years, the firm has grown and has increased its funds, currently managing two funds for a total of more than $250 million. Last one being a $180 million fund.

Success Stories and Market Conditions

Panakes Partners has seen success with its portfolio companies, many of which have progressed through multiple funding rounds and demonstrated significant value creation. Despite the challenges in the fundraising market, the MedTech segment has remained robust, benefitting from active strategies and promising opportunities.

Insights into the Funding Market

Diana discusses the current funding market conditions, noting the influence of both the biotech and tech sectors on Medtech. While tech faces challenges, Medtech remains resilient, driven by active strategies. Diana suggests that Medtech is a good space to be in, even amid market fluctuations.

Qualities of a Successful VC

Diana emphasises the importance of financial returns and the ability to quickly identify opportunities. Successful VCs need to understand market trends, exchange insights with peers, and collaborate with companies to build attractive business plans that generate financial returns.

The Role of IPOs and Exits

Diana clarifies that an IPO is not an exit; it’s a step in the process. She highlights the need for careful selection of companies for IPOs, considering liquidity and market conditions. The ultimate goal is to ensure the asset has enough liquidity for a successful exit.

Exploring the Medtech Landscape

Diana shares insights into the hot areas of MedTech, including cardiovascular, robotics, oncology treatment, neurostim, GI endoscopy, ophthalmology, IVD, and AI in drug discovery. She also notes that the digital health sector, while once popular, has seen a decline due to reimbursement challenges and concerns about IP protection.

Impact of European Regulations

Diana discusses the impact of European regulations, such as MDR and IVDR, on MedTech startups. While some companies adapt by raising more funds and combining FDA approval with CE marking, others face challenges in achieving profitability due to regulatory changes.

Equity Value Generation and Founders' Mistakes

Diana emphasises the importance of founders understanding the financing world to guide decision-making. Founders often make mistakes by overvaluing achievements, underestimating financial risks, and lacking a realistic view of how investors can generate returns from their investment proposals.

Due Diligence and Identifying Successful Founders

Panakes Partners conducts due diligence by verifying preconceived ideas, talking to industry experts, assessing reimbursement strategies, and carefully reviewing business plans. Diana emphasises the importance of chemistry, competence, and team dynamics when evaluating founders.

Legacy and Future Aspirations

Diana’s legacy aspirations revolve around bringing innovative products to market that address patient needs and improve lives. Her dedication to ethical business practices and passion for the MedTech industry underscore her commitment in making a positive impact.

As the episode concludes, Diana shares her experiences and insights, wishing listeners success in their MedTech careers. This engaging conversation offers valuable perspectives for aspiring professionals, founders, and investors navigating the dynamic world of MedTech.

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