An Ernst & Young report released last fall said “strategic buyers have become much more risk averse and are increasingly interested in buying assets that have already gained market acceptance and demonstrated growth potential. In the U.S., the ‘sweet spot’ for attracting buyers now appears to be $40 million to $100 million in sales and a clear path to profitability.”
This lack of regulatory predictability has sent venture funding — a traditional source of start-up funding in med-tech — to foreign med-tech markets, such as Israel and Singapore, and to other fields entirely, Gunderson said. In coming years, there may be a gap where there won’t be many med-tech companies around to acquire, he added.
“The pipeline of new companies is not being funded now to the extent that it was,” he said. “I’d liken it to post-World War I in Europe, where you just lost a whole generation of men, and it took a generation to build it back up again. It’s going to be like that in med-tech.”
