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How to Get Funding for the Design of a Medical Device

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How to Get Funding for the Design of a Medical Device

When you believe you have a good idea for a medical product that can help save lives or add convenience, one of the more daunting tasks is getting funding.  Making a one-off prototype can be expensive but without that prototype, it can be impossible to sell your device.  Many inventors don’t have any idea about where to turn to find funding for their project.

Some ideas include:

Venture capital is money given by investors to startups.

Someone with money (or their people) finds projects they are interested in and they determine if they want to risk their money to help make that project a reality.  As a general rule, the venture capitalists get a part of the profits, or some other way to share in profits and the developer gets enough capital to get the idea or project off the ground.  If the project fails, in most cases the venture capitalist loses their initial investment.

Crowd Funding

This is a mostly 21st Century idea of funding a project.  The developer of a project puts their idea on a crowd funding website, and individuals give donations based in part of whether they want to help turn an idea into a reality.  In return, those who give a donation, sometimes just $50 from one person and or even $20 from another, may get small rewards, like tickets to a show—if the invention or idea is a success.  Or, if the project fails, the investors may get nothing.  In a recent crowdfunding for a mini-computer, a teacher gave $150 to a project and their reward was that the school they taught at got to purchase $9 computers for each student before they were commercially available.

Another Kind of Crowdfunding

is when startups sell ownership in their project or company in return for an investment.  If the project works out, the investor gets money –their original investment, and often another percentage of the project, as a return on the investment.

Angels Investors

is a source of funding for projects that are similar to venture capitalists, but instead of giving $100,000 or even $1 million to fund a project, the angel investor makes much smaller investments, usually early in the process.  Angel investors can also band together to raise a larger chunk of money.

Strategic Partners

are companies that may benefit from a successful concept.  The strategic partner will invest in a startup or an idea because if it is successful, they will provide all of the raw materials for the project, or because they will sell the finished product which will help their profits.

Incubators

Incubators are programs that can help any sort of startup if they are in the right place at the right time.  Incubators often subsidize the rent, or even give a startup a free place to work on their project in trade for a lump sum payment, or a piece of the finished product if things work out well.  Some incubators even allow the people working on the startup to sleep there and they feed them.  This allows the startup to focus on their idea and product 24 hours a day if that is what they need to do.

 

Email viasales@viabiomedical.com or visit our website at www.viabiomedical.com to learn more.