Investor Spotlight – Larry Lawson

Larry Lawson started his healthcare career in 1970, working for Johnson & Johnson. Over the decades that followed, he spent time both behind a desk and in the trenches, finding new and better ways to run everything from manufacturing to emergency rooms. It’s no surprise then that his experience is a testament to investing in what you know.

We recently had the chance to speak with Larry about his investments, the advice that he’d give, and what excites him every day.

Why Did You Start Investing?

It wasn’t the money. I got into investing because I understand the business. I’ve done everything there is to do on the business side of medical devices, from manufacturing to import/export of devices and products, and I can draw on those experiences.

It just made sense to invest, particularly after I sold several companies through the years. It does have something to do with the money, but it has more to do with that I understand the business and it made sense.

What Would You Do Differently?

It seems like I’ve learned just about everything, but I know that I haven’t. So I’d have done everything I could to go to Harvard and earn an MBA before pursuing what I do now. I think I would be much further ahead.

It’s the level of people that you become acquainted with through an MBA program as much as anything else. Then, if you’re in the right industry and you’re doing the right things, all the rest can just fall together. I’m still doing business with a lot of these East coast schools, but it would have helped had I gone to one.

What Gets You Excited About a Deal?

First off it’s the opportunity. You have to see opportunity and the potential of the deal. But beyond that, it’s the management of the company. Once I get past the opportunity, potential, and profitability, then I really look at the management. Then last but not least is the exit opportunity.

What Are Potential Warning Signs?

Of course I look at management and financials, but first, you have to go to revenues and profitability. If there are any warning signs, they will exist in those areas for sure. Beyond that, since I’m a sales and marketing guy, I always have to evaluate the strength of their product sales and marketing. That’s a secondary key, but it’s still a key area.

What Attributes Should Exist in an Entrepreneur?

I want to see commitment and compassion for what they’re doing. But beyond that, they have to have a positive attitude and previous success. I want to see that they’ve been successful elsewhere before I’ll look hard into them.

What Other Advice do You Have for New Investors?

If I were someone who just had money to invest and didn’t know what I wanted to invest in, I’d partner with those who know the industry that they want to invest in. That partnership can be through universities or platforms like AngelMD. Ideally, they need to know every aspect of the industry.

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With all of the information that we have available to us today, you can find who the key opinion leaders are in every discipline. I’d learn who they are, get to know them, and read about them. If I wanted to invest in the gold industry today, I wouldn’t depend on the ads that I see on TV. I’d partner with people who knew what they were doing, and I’d lean on their experience.

What 3 Things Excite You Right Now?

When I wake up every morning, I guess first of all I think about my boat in San Diego [laughs] but then it quickly turns to business. What I really get excited about is technology and medical devices. I just love technology.

Right now I’m doing projects with drones and 3D printing, as well as funding startups in AI. I am just mesmerized by the opportunities with AI and robotics — particularly micro-robotics. I’ve seen some products that are not yet in the market for microsurgical procedures that really excite me.

I’ve been in Texas Heart, and they’ll print a heart at night with 3D printing and then the next day they’ll put in a calf in the animal medical lab. I’m working in areas of artificial hearts and LVADs with The Cleveland Clinic, so that’s an area that I’m highly interested in.

What Was the Last Book You Recommended?

The last book I recommended to someone was one of my new business partners. It’s named The Business of Healthcare Innovation by Lawton Burns. I believe it’s in its second printing, and it’s just a darn good book.

Because I’ve been in the business for so long and I’ve done just about everything in it, I really relate to this book. It’s an analysis of the business trends in the manufacturing segment in the healthcare industry. It covers every aspect, from pharma to biotech, devices, and even IT. It’s a study on the revenue models, regulatory concerns, market structure, and even compensation — all the things you need to consider related to the economics of starting a company from scratch.

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