In this episode of MedTech Crossroads, Gene Parunak, Managing Director at in2being, discusses 3M’s agreement to a $6 billion settlement for faulty ear protection sold to the U.S. military. The deal resulted in hearing loss and tinnitus in many service members. Gene focuses not on the legal aspects of the case but on its regulatory implications. The FDA sometimes scrutinizes issues very minutely, but in this instance, it had exercised enforcement discretion not to regulate hearing protection. Instead, oversight for ear protection—including the faulty earplugs in question—has been under the oversight of the EPA. Consequently, the 3M earplugs only had to meet an outdated 1974 ANSI standard for hearing protection testing.
Preparing to Woo Angel Investors
In the next segment, executive, entrepreneur, and angel investor David Weaver joins Gene to discuss trends in angel investing. Weaver helps demystify angel investors’ expectations, discussing when to approach them, what documents are needed, and what they expect from startups. He emphasizes the importance of being well-prepared before seeking investment—you should have a comprehensive slide deck presenting the venture, a clear business concept, and a realistic valuation. He also underscores the need for proof of concept.
Weaver says that angel investors do invest in LLCs, despite the widespread notion that they only invest in corporations. He also touches on an evolving trend in which startups don’t seek venture capital after receiving angel investment. He encourages entrepreneurs to consider exits through acquisitions and underscores the importance of keeping investors informed through regular newsletters and updates.
Overall, med-tech innovators will leave with a comprehensive understanding of navigating the complex landscape of angel investment.