Formula

In our experience, a core technical group can mature a medical invention to a pre-production stage for $250K to $450K seed money. Just consider that only the cost of an average house in America! After this investment, the inventor could sell-out for values of about $1.0-$1.5 million.

If a venture capital firm does choose to invest at this point, they typically invest $3-$5 million {in exchange for 40%-45% equity} and require the core technical group to mature to an IPO stage in three years. These figures are estimates for medical device inventions that progress without setbacks.

Many major venture capital firms {with funds from $85 to $200 million} report that they receive about 2000 candidate business plans per year, they conduct due diligence investigations on less than 15 and only “do” 3 or 4 deals per year! With that kind of attrition, consider how selective investors can be!