Health-care UX entrepreneurs diagnose the best ways to get funding

All across Canada, entrepreneurs and healthcare professionals are developing various ways to improve the user experience of patients, but finding funding for such innovative solutions can leave many ideas on the drawing board.

At the first meeting of the Toronto chapter of Health 2.0 at the MaRS Discovery District two weeks ago, a panel of entrepreneurs — each of whom have found unique ways to fund their healthcare UX innovations — provided advice on how to get to market.

Jamie Tremaine, CEO and co-founder of GestSure — a tool that utilizes the xBox Kinect to allow surgeons to manipulate computer models’ hands during operations — suggests that it’s getting easier to pitch hardware solutions to investors, in spite of their lack of scalability.

“There’s this growing awareness that hardware is getting as easy as software was 10 years ago,” he told the room of about 50 entrepreneurs, students, and health-care professionals. “We’ve been really enabling leading-edge hardware startups in the consumer space without having to raise as much money. Throw a Kickstarter campaign into the mix and you’ve got a recipe for a pretty large market share.”

The company, which was born out of Microsoft’s Kinect Accelerator program, has raised a seed round of half a million dollars from Canadian and American angel investors.

More than money

Rami Alhamad, CEO and co-founder of PUSH —an armband that tracks weight-training metrics on smart phones — also believes that crowdfunding campaigns are an effective means of bolstering hardware startups, though not necessarily because of the money.

“The key with hardware is very rarely do you get to the point where crowdfunding revenue is sufficient to

operate the whole company, so you’re really using it as a proof point,” he said. “Companies that do crowdfunding campaigns have already closed VC capital and are using it as buzz, or they’re a company that are pre-seed and trying to show their investors there is enough interest in the market. We were the latter.”

Get close to your audience

Though crowdfunding is a great way to prove the market exists for a product, Blair J. Ryan, CEO and co-founder of TheRounds — a secure and exclusive platform that allows Canadian physicians to communicate and collaborate — took somewhat of a different approach to funding his startup.

Though he only recently launched the company Canada-wide from Halifax with $1.1 million of angel and government funds earlier this month, TheRounds already claims two per cent of all Canadian physicians among its membership. Ryan’s advice for entrepreneurs approaching a variety of sources during fundraising is to know their audience.

“Five of my angel investors are physicians who are users and fell in love with the product,” he said. “I’d say, ‘you can imagine yourself using it in this scenario,’ and they said they definitely can, and why wouldn’t other doctors? That’s a much different pitch than speaking to the government, who comes to the meeting with a checklist.”

Philip Chen adds that no matter where the funds are coming from, it’s important to start making connections early on, even before opening up an investment round. As the COO and co-founder of Seamless Mobile Health, an mHealth application that allows physicians to receive daily updates from patients and make recommendations, he has raised over half a million dollars from prominent angel investors.

“When we really started looking to fundraise we went out and talked to a lot of people,” he said, adding that he and his co-founders created a list of 50 people they wanted to approach for advice before asking for capital. “We went to show them the deck and if they were interested we wrote it down, and then once we got enough ‘yeses’ we actually opened up the round.”

While each of the entrepreneurs took very different paths to reach their fundraising goals, Nikolai Bratkovski, CEO of Opencare and one of the moderators of the event, argued that, “there’s no right or wrong way of raising (capital).” But there can always be new ways of improving health-care UX.

photo credit: a.drian via photopin cc