By Alice Greenhalgh, Innovation Manager at Health Enterprise East
Innovators looking to kickstart their ventures can often be confused on the best source of funding, and it’s easy to understand why. Several types of funding are available, each with their own pros and cons. Innovators in the early stages may be suited to research grants from medical research charities and hospital charitable funds. For more established innovations, the National Institute for Health Research offer a range of funding schemes to suit innovators at varying commercialisation stages. Organisations such as Innovate UK, fund later stage, business-led projects. Other funding options include bank finance and equity investment via crowdfunding, angel investment or venture capital. These funding streams have one commonality – they require a clear plan on how the finances will be used to meet the aims of the project.
Although securing funding is important, an often-overlooked, concurrent task is to construct a detailed plan on how best to actually use it. Of course, upon securing investment, you should celebrate such an achievement – but now the hard work begins. The most effective strategy is to seek out expert opinions where needed but maintain a firm grip on the budget to ensure the project’s milestones are achieved.
In order to successfully allocate financial resources across various streams of product development, there are numerous things to consider. For example, ensuring you use competitively priced service providers: we would suggest obtaining three quotes from independent organisations for prototype design and development, making sure you understand what services are being included, if there are any extras to think about and if you agree with their proposals. Logistics are also key: what timescales are these providers working to, will you have adequate time to evaluate the prototype and gain appropriate feedback before funding runs out? Are you able to complete a clinical trial with the product and what type of quality accreditation does the partner have?
Regulation is also an important factor. Medical devices are governed by national and international regulations and therefore must be tested and certified prior to going to market. The regulatory landscape is complex, often varying between regions, further confounded by changes in EU regulation and uncertainties caused by Brexit. Our advice would be to invest in regulatory advice early on, to avoid costly mistakes later down the line.
Another tip is to make use of a qualified health economist who will be able to perform quantitative evaluations of your innovation. This type of cost-benefit analysis will be invaluable when building a robust investment proposition and sourcing further funding.
These three streams of design and prototyping, regulation and health economics are key areas in which to seek expert advice. However, you may be able to save in other areas by using your own knowledge. For example, instead of commissioning a piece of market research, you could conduct a small survey using your own connections. This will enable you to home in on the real questions and uncertainties behind your innovation.
A final area in which to invest time and effort is intellectual property (IP) protection, utilising your expertise in order to protect your ideas. Using the patenting process as an example, we advise that you sit down with a patent agent to discuss your innovation at an early stage, ideally prepared with a list of similar inventions. This will give them a better understanding of the space you are in and allow for a fuller discussion around the patentable features of your innovation. Although the fees can seem expensive, IP protection will strengthen your commercial position and thus increase the value of your offering significantly.
A firm grip on the finances is no mean feat, it is also not something to pursue alone. There is a wealth of support available to medtech innovators, including the Academic Health Science Networks, the Knowledge Transfer Networks, innovation incubators and other local entrepreneur groups. Health Enterprise East offers support to its NHS member trusts as well as consultancy services to medtech innovators and companies.