Our third webinar in our popular Ask the Expert series focused on investment readiness, with four experts sharing their insights into how healthtech innovators can best secure vital funding to develop their healthcare products and services. Here are some of their top hints and tips for success…
1. Tap into the expertise available in the innovation ecosystem
Dr Ben Masheder, Funding and Finance Manager at Innovate UK Business Growth, spoke about the expertise and advice available through the innovation ecosystem. UK Research and Innovation brings together the seven Research Councils, Innovate UK and Research England. As part of UK Research and Innovation (UKRI), Innovate UK Business Growth drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas, including those from the UK’s world-class research base. They can inspire healthtech innovators by making the opportunity visible, involve them by bringing relevant organisations and people together and invest in business growth by convening the resources needed.
Through Innovate UK Business Grwoth, healthtech innovators can access a range of training and services to help them make their product or service investment ready. One such service is the Global Business Innovation Programme (GBIP), which helps ambitious UK companies that are developing cutting edge technologies in key sectors to enter global markets of strategic importance and find international collaboration partners. Successful applicants benefit from an intensive nine to 12 months bespoke support.
- Getting ready for the market: a preparation workshop to build knowledge and understand market and culture, opportunity, intellectual property (IP), value proposition and pitching
- Visiting the market: normally five days exclusive marketing access via key contacts, research organisations and companies at pre-arranged meetings and matchmaking events.
- Exploiting the opportunity: a follow-up workshop and ongoing support to exploit contacts and knowledge gained during the visit and develop cross border innovation projects.
Innovate UK also offers invest-ability intensive training, a pathway to investment readiness for innovation focused businesses seeking to gain game-changing equity finance. The course offers two days of intensive investment readiness training on targeting investors and building a compelling proposition. It provides an opportunity to test your pitch with, and receive constructive feedback from, active investors and investment experts to build your confidence and improve your messaging. It also provides opportunities and ongoing support from an innovation and growth specialist.
Alex Leach, Deputy Director of Programmes at Health Innovation West of England described the key role we play in helping promising healthcare innovators in the region to succeed and expedite promising solutions into the hands of clinicians to ultimately improve patient outcomes.
“We offer a range of support to innovators and help healthcare providers find and adopt innovations that meet their needs”, says Alex. “We work with the health and care system to understand what the pressing problems are, which is the type of intelligence innovators, and particularly early-stage innovators, really need. We have a key role in helping to translate the needs of the health and social care system. This helps innovators work out what products are needed, but also how you successfully sell those products into the health service. Ultimately it is that synergy of need along with product design and innovation that is the golden ticket if you’re pitching for investment. If you can match pressing need with a great idea, it’s a ticket to success.”
Our Innovation Exchange provides the support you need at any stage of your innovation – access all our business services in one place as well as local and national funding opportunities here.
2. Have a focused business strategy
Dr Harry Alexander, Investment Manager and connector of entrepreneurs and academics at Qantx, who invest in early-stage healthtech innovations, advises it’s essential to have a focused business strategy in order to gain funding.
QantX was founded to channel transformative investment into the South West’s most promising startups, supporting ambitious entrepreneurs with globally impactful ideas in Sustainability and Healthcare. Dr Alexander advises that to gain their interest, healthtech innovators need to have a clear competitive advantage and an identifiable and validated community of customers, strong teams and constructive working relationship.
Harry’s advice is to find the right business model and pricing – for a sustainable business all parties need to be winners. Qantx looks to innovators where the product or service meets a globally impactful challenge and businesses where their team’s knowledge and networks have the potential to add value – having a focused business strategy will help to make all that clear to potential investors.
It’s important to be aware that developing a business plan for investors is different to developing a business plan for the NHS. For investors, the purpose is to raise investment and set out their return on investment. For the NHS, the purpose is to generate sales and partnerships and set out the impacts and savings for the NHS – will they make savings and/or would patient benefits equate to the same or more? Your NHS business plan needs to inform the case for investment, and you need to take time to really understand that.
3. Get pitch perfect
Setting the right pitch is essential in gaining valuable funding. Innovate UK has an Invest-ability Pitch Panel. These are designed to improve your pitching skills in front of a panel of leading investors who provide constructive feedback. You are supported throughout by an innovation and growth specialist to help you make the most of the opportunity. It enables you to refine and road test your investor pitch, gain valuable input from investors, improve your confidence and preparation in going for your next raise and enhance your understanding of funding requirements.
Gloucestershire-based Anya is one success story of a local innovator we’ve worked with that has benefitted from this Innovate UK support. Anya have developed a pioneering app that uses cutting-edge 3D interactive technology and avatars to help new mothers intuitively learn breastfeeding skills. Innovate UK helped Anya’s founder, Dr Chen Mao Davies develop a clear, compelling and credible investment proposition, resulting in her leveraging £1 million of funding.
4. Take gradual steps
As Dr Nick Gompertz, a former NHS doctor and founder of EarSwitch advises, it is important to take gradual steps as it’s unlikely in the UK that someone will fund your grand plan at concept stage. It is difficult to do alone so it’s important to have a great team behind you. Valuable support is available through accelerators, grant writers, co-founders or chief commercial officers (CCO) with skills in raising your company profile and accessing funding.
5. Learn from setbacks
As Nick also advises, it’s important to be self-critical – everyone else will be! Learn what the funder is looking for and learn to tell your story in a way that answers their needs. Stick to your guns – if you have the right innovation, it will be right for market. Listen to advice and don’t argue about how to navigate to your goal – having a great team behind you such as a CCO and advisors will enable you to do that. Nick also says it’s important to be resilient to rejections – it may simply be the wrong audience, and if so, submit your funding application elsewhere. If your business model isn’t working, work out why and pivot – it’s rare to get it right first time. Expect setbacks – learn from them and bounce back stronger.
6. Understand the motivations of your different stakeholders
Get to know your customer at all levels of seniority – users, influencers, managers and board directors – and what motivates them. This will help prove to potential investors that you really understand the market sector. For example, just because procurement in a healthcare organisation is prioritising the need to save money, it doesn’t mean clinicians or the board will have the same motivations.
7. Know your competitors as well as your market
In bringing your innovation to the health and care market, you may be seeking to replace an incumbent product or service, so it’s important to understand what sets your innovation apart. As Alex Leach advises, it’s important to know why the NHS might want your product. What is the problem you are seeking to address and does your solution fix it in a viable and acceptable way? Is there a clinical benefit, increased efficiencies or does it address a priority? Is your innovation cheaper or safer?
8. Have a strong value proposition
A strong value proposition is vital in securing funding and a route to market. As Alex Leach explains, constructing (or deconstructing) a value proposition produces a credible and coherent set of claims to demonstrate the value of your product or service to health and care providers and patients. Different customer types may need a different value proposition so be prepared the repeat the work when considering clinicians versus commissioners.
9. Evidence is key
If you want to be successful in securing funding and successful in gaining commissions within the NHS, then you need to be able to evidence that what you say is true. Ultimately, procurement within the health service is driven on evidence.
Alex Leach explains, “The evidence you need will depend on your product or service. For example, if your product is quite ‘light touch’, such as a Class 1 medical device, the evidence requirement will be significantly less than if you’re trying to create a new heart valve or something that is providing diagnoses or treatments.
“Our role at Health Innovation West of England is not to do the research you need for medical regulation approval or the efficacy testing that shows your claims about your product are true – that’s something that needs to be done within a research area. What we are looking for is that real world evidence, where you put your product into the hands of a clinician and use it on the coal face. Our support is around testing what actually happens in the real world. Real world validation reassures clinicians and commissioners that – if they buy this, it will actually work and will be acceptable? We spend time really trying to understand this. As well as being valuable information for commissioners, it also provides valuable insights for innovators – it helps you to modify and improve your product. Sometimes it also helps you to work out that the NHS is not the right market for your product and you may need to look in another area.”
10. Find your difference
One piece of advice shared by all of our experts is to understand that every start-up is different – find your difference and make it your strength by adapting all advice to your individual circumstances. And don’t be afraid to keep innovating – your product, business model, route to market. You need to keep agile – the future rarely looks like it does today.
Posted on May 16, 2024
