8 Tips To Make A Med Device Startup More Investable In 2026

By Jim Kasic, Boulder BioMed

Raising funds in the medical device industry is always challenging. Doing so as a startup can be even more so. And U.S. medical device companies seeking funding this year will find that innovative technology and a stand-out prototype aren’t close to being enough. They’ll also find investors looking to write bigger checks — but for fewer companies and for those companies that are truly positioned for market success.

Learning what makes a startup more investable can be particularly difficult for first-time entrepreneurs. These eight tips can help startups looking for funding become significantly more investable.

1. Make Sure Your Device Solves A Problem.

This may sound cliché, but a new device must be able to solve a real, acknowledged, quantifiable problem. Innovation and technology alone will not make a device or company investable.

Know your market inside out. Be able to substantiate and prove exactly what problem your device solves. Will it be a superior device to what’s currently available? Alternatively, will it command the market as the lowest-cost device? Can it reduce a hospital’s procedural costs? Can you convince a doctor using the device in a hospital setting that they will make more money using the device?

Assessments of how a device solves a problem may include collection of both qualitative and quantitative data through user interviews, observation, and usability tests. Companies must involve end users to understand how and when they would use the device, and eventually conduct formative studies to observe handling and operation of the device. Companies that make the effort to conscientiously go through these steps — and plan for them in the development process – will be much more investable.

2. Maintain Core Focus And Realistic Expectations.

Frequently, first-time entrepreneurs are trying to raise money to secure a good job and a high income. In these cases, they are paying themselves far more than what an investor would be willing to pay, and they often build out a team of many more (and more highly paid) people than they need.

Investors like to see that the CEO of a startup is frugal and knows how to spend money where it adds the most value. What makes a company more investable to them is a CEO taking a minimum salary because they have a great deal of stock in their company. They are seeking a CEO who works with a lean team, outsourcing functions that are not core to the business: typically including accounting, quality assurance, and regulatory affairs.

3. Understand That Managing Expenses Comes Before Building Voluminous Financial Models.

Many, if not most, CEOs of medical device startups come from science and technology backgrounds, rather than business ones. As a result, they can end up overdoing it when it comes to building financial models. In general, a startup with no revenue likely does not need complex mathematical structures and algorithms (nor the CPA firms, law firms, and CFOs that often accompany the effort). They do need to carefully manage expenses and keep sound books, which a skilled bookkeeper can typically handle.

A potential investor — whose primary job is to get their money back — will find a startup focusing on the key tasks to speed a product to market, at guarded expense, much more interesting than one focusing on great financial models.

4. Set A Reasonable Valuation For A Reasonable Investment.

The saying, “until you have some momentum, you have no momentum,” rings true and rings loudly in medical device investing.

Building that momentum demands appropriate valuation. It starts at the very beginning, as the first round of funding is usually the hardest round to secure. Often starting with friends and family, first-round funding success shows that you’ve been able to generate some investment and that you’ve been able to complete a major task you set out to do. It starts to build critical momentum.

In all cases, pre-revenue valuations that are too high will absolutely keep investor interest at bay, whether the investor is a family member, angel, or other. A company with vast experience, patents in hand, proof of concept, and a substantial potential payout may command a relatively high valuation for a new device. But for startups working with an idea — no matter how stellar — and limited traction, a realistic market valuation is crucial.

In setting valuation, startups must also keep in mind the commensurate investment. While every situation is different, the amount a medical device company can typically raise is about 20%-30% of its valuation. So, for example, a company valued at $4 million might raise $800,000 to $1.2 million in its first round. A company trying to secure significantly more on that valuation will generally be unsuccessful.

5. Turn Over Every (Funding) Rock.

The current investment pool for the medical device industry is very large. While that presents great opportunity, it also means that investors are looking for the best, most efficient ways for payback. The reality is that it takes them as much time to conduct the due diligence needed to write a large check as it does to write several smaller ones. Plus, the payback potential on the large check is greater.

The message to startups is not to give up, but to acknowledge these market dynamics and then get to work identifying appropriate investors. Entrepreneurs often try to raise money from investors that are too large and then give up when they are unsuccessful. Rather, it pays to do the necessary research, scour any and all potential funding sources, and find local and industry investors who are right for your situation and timing. Startups that take this route find that they can then often leverage one opportunity to the next as they gradually move up the funding ladder. For example, an investment from one angel investing forum can lead to syndication from other groups. Know your market and work at it.

6. Look For Opportunities With Devices That Command Very Large TAM.

Experience shows that it’s reasonable for a startup company that gets a device to market, and implements an effective marketing and sales effort, to capture 5% of its total available market (TAM). Since investors prefer larger payouts to smaller ones, they’re generally going to look for devices with very large TAMs.

Consider a company with a TAM of $200 million and that has already captured 5% of the market ($10 million in sales). Contrast with a company that has a TAM of $1 billion and has also captured 5% of its market ($50 million in sales). An investor will be much more interested in getting 5% of that $1 billion market than 5% of the $200 million market.

7. Do What’s Possible To Use An Existing Reimbursement Code.

Reimbursement codes (such as a CPT or HCPCS code) are essential for device adoption and for hospital, provider, and patient access. Securing a new reimbursement code can increase risk for an investor, jeopardize market introduction, and threaten financial viability. It can even be more difficult and time-consuming than obtaining FDA clearance.

To accelerate time to market, and therefore increase investor interest, a company’s product development process must look at how its device fits into existing reimbursement codes early on.

8. Know And Communicate Your Milestones.

Investors will always aim to minimize risk. The most investable companies work to de-risk in every area, from obtaining a patent and building a prototype to obtaining FDA clearance and showing post-market data. Moreover, they are the companies that work to minimize their risk with potential investors by taking time to understand each and every milestone required, what each means to their business, and how achievable it is.

When a startup finds a potential investor who is truly interested, it can be all too tempting to jump at the opportunity — and all too easy to think only short-term. Talking through expected milestones, and recognizing what you can and cannot accomplish, will set a startup company up for success, not just for the first round of funding but for all future rounds.

Conclusion

Raising capital in 2026 requires a smart business strategy, strong expense management, and realistic expectations. Medical device startup CEOs who are willing to think and act from investor perspectives will dramatically increase the investment potential of their companies.

About The Author:

Jim Kasic is the founder and chairman of Boulder BioMed. With more than 30 years of experience in the Class I, II, and III medical device industry, he holds more than 40 U.S. and international patents. His career includes experience with companies ranging from large multinational corporations to startups with a national and international scope. Kasic has served as president and CEO of Sophono, Inc., a multinational manufacturer and distributor of implantable hearing devices, which was acquired by Medtronic. He also was the president of OrthoWin, acquired by Zimmer-BioMed. He received a B.S. in physics and an M.S. in chemical/biological engineering from the University of Colorado and an MBA from the University of Phoenix. He can be reached at jim.kasic@boulderiq.com or on LinkedIn.