Category Archive For "Investing"
Windpact began because of a car seat.
Before starting Windpact, CEO Shawn Springs had seen countless injuries during his NFL career, where the players were outfitted in what should have been the best gear available. But when Springs totaled his car in an accident, his children walked away with only scratches because of their car seats. What if he could translate that level of protection into helmet technology?
Chronic traumatic encephalopathy (CTE) is a neurodegenerative disease most commonly found in people who have had repeated head trauma — such as those in the NFL or professional boxing. The rise of post-mortem CTE findings has caused the alarm bells to sound in every level of sports. From players to owners, everyone involved knows that we are at a crossroads when it comes to balancing sports with potential dangers.
I recently had the chance to speak with Maurice Kelly, Windpact’s Chief Innovation Officer. As the company ramps up for its syndicate funding round through AngelMD, he had some valuable insight into the genesis of the company, and what it plans to do next.
Windpact is taking a unique approach to solving the problem. Rather than building its own equipment, the company partners with top host brands to integrate its Crash Cloud system in their products. This holds the potential to get lifesaving equipment into more hands, with less red tape and overhead.
First thing’s first – How does Windpact make money?
We take a hybrid approach to the business. We don’t sell helmets, we make the existing ones better. Let’s say that a brand manufacturer comes to us with 500 helmets because they knew that if they could pass the high-velocity test then they could pass the low-velocity ones as well. We’re first going to put them through an extensive series of our own tests. With those results, we can then integrate the Crash Cloud system. Our customers pay us for the system when it’s integrated into the helmet.
There’s a point here that doesn’t get enough credit — You never want to try to change user behavior. We’re not changing the buying behavior of anyone who is in the market for a helmet. They can still buy the same helmet that they have been using, and we’ll make it exponentially more protective.
What were the early days like?
We started to explore the market, and we quickly understood that this was an area that just lacked innovation. We can look at the automobile sector, and cars change every four years. Even tires change every year. For something to go thirty plus years without some big innovation? You know that there’s an opportunity.
As we were researching, the Virginia Tech reports started to come out, and their data showed that all impacts are very different. The majority of impacts in football happen at low or medium velocity. These helmets, that manufacturers and players thought were so great, were not providing the protection that they claimed.
If you look at today’s helmets, they were built to address high-velocity impacts because that’s what is required to pass the standard, but they are not optimized to protect against a range of impacts.
Talk to me about the Windpact approach.
This is a physics problem. We got a team of engineers together, and we started looking at this sort of visco-elastic system — meaning that it would adjust based upon the level of impact. We knew then that we could offer protection at every level, from pee-wee leagues to the NFL, without losing performance.
Then we had to decide what this looked like, in terms of a business. Every data point that we looked at pointed to the idea that government regulation was coming. Football, baseball, lacrosse, and hockey were not under government regulation. Lo and behold, thirty days into our effort, the Senate calls top football helmet manufacturers to The Hill. They want to know what these companies knew about concussions.
Between Shawn and I, we had thirty plus years of experience in wearing helmets. So we could either build a helmet company, and put our time and effort into bringing it to market, or we could do the research and license the technology to the sporting industry.
How surprising was it to take the licensing approach?
What we learned through this process of deciding what the business would look like is that the ecosystem was not at all like what we anticipated that it would be. We didn’t want to go out and raise 50 or 100 million dollars to build a manufacturing infrastructure. We just wanted to solve a problem. We knew that the problem was so critical that it shouldn’t just be our product.
If you look at brands like Intel, Gore-Tex or BASF, that’s the model that we’re using. We found that there are other implications as well. We can apply Crash Cloud to the military, to healthcare, or even the automotive industry. The companies who make football helmets? All they make are football helmets because that’s where they’ve sunk all of their R&D dollars.
We’ve already been able to do some piloting with the automotive community. We’ve been approached by a large automotive manufacturer to put our Crash Cloud system into specific interior areas of their performance automobiles.
Talk about your IP and how it works for the business.
The real difference for us is that we don’t make the materials. Our IP is on the system. The more foam makers that are out there, the deeper our ocean becomes. Contrast that to companies whose core IP is around a certain formulation of a certain material, to build a certain product. That is very limited.
We use off the shelf products, then we can customize the foam to build particular products. That’s where things get interesting.
Give me an example of what that looks like.
Let’s look at headrests in cars. Go inside your car and you can cut open the headrest and give us that material. We can then take that material, tune it in our system without changing its characteristics of its structure. We then encapsulate it into our Crash Cloud, adjust the hole sizes, and we’ve just made that same headrest perform better across a variety of different impact scenarios.
What about the challenges?
The biggest challenge is a space constraint. When you think about a car seat, and how it keeps a child safe, it’s a matter of multiple layers. You have the metal of the car, then the crumple zones. Inside the doors and the body, you have steel. Once you’re through those layers, then there are airbags and the car’s own seat. After that, you finally reach the car seat.
In a football helmet? We have 30 millimeters of space. So that becomes the major challenge. How do we innovate and develop the approach to manage impact energy in only 30 millimeters of space? That was probably the biggest challenge and the biggest lesson that we had to learn, but we didn’t realize how hard the problem was until after we’d already solved it.
The beauty of the Crash Cloud system is that there is simplicity in manufacturing now that we’ve solved the hard problem. It’s just multiple layers of foam in a bag, and then we poke holes in the bag. Now the engineers don’t like to hear the science, the data, and all of the formulas simplified like that. We still know that it’s a complex business problem, but we had to look at the simplicity of it.
And how about milestones?
We won the NFL First and Future Startup Challenge at the Texas Medical Center during the Super Bowl, we won the NFL HeadHealth TECH Challenge II, we already have a product on the market for women’s lacrosse, and we are working to a number of new products with major brands we hope to be announce in the coming weeks and months.
It’s been fun, and it’s been hard. Now we have to scale it.
What about the NFL HeadHealthTECH Challenge?[Read the story from the NFL here.]
That’s big. It definitely helps when you have a former Pro Bowl athlete because you can get that level of visibility. But the fact that we are being validated in the scientific community is extremely humbling, and not just because of having your CEO be an athlete.
It’s great because the NFL is not just throwing money around; they’re looking for real products and not just research at this point.
You have our CEO who played on Sunday nights, and now he’s doing TED Talks as a thought leader in the space. He said that, given all of that, his greatest achievement in life now is having his name on the Windpact patent.
What’s the future look like for Windpact?
Our focus today is on building a great company with superior products to help protect people. We have a terrific technology and can be nimble and agile in ways that large entities can’t, which will open opportunities for us.
For this week’s Investor Spotlight, I spoke to Dr. J. Michael Bennett, an orthopedic surgeon with years of experience serving the Houston community.
Aside from the potential returns, what made you decide to get started with investing?
Over the years I’ve learned that it is best to diversify as opposed to putting all your eggs in one basket. I’ve always looked at and been involved with a number of different investing opportunities. I’ve been looking at startup healthcare companies for over five years and that’s how I found out about AngelMD.
I got involved with AngelMD two years ago before anyone else in my local region (Houston). I started researching a company named VICIS when I stumbled on AngelMD. I went to the website and learned about the company. I ended up reaching out to AngelMD and talking to CEO Tobin Arthur. I was impressed, so I started introducing physicians to the platform.
Looking back, what have you learned and what would you have done differently?
I don’t have any regrets. I always look forward and learn from my mistakes. If anything, it would have been nice to find out about AngelMD a little earlier. I think that an opportunity like AngelMD to invest in healthcare startups would have been nice to have ten years ago.
What gets you excited about a potential deal?
It has to be something that I think will be a game changer. It has to either benefit the patient or streamline services. It has to be something that’s novel, and something that can be scaled. The company has to have a solid base and team. You can have an okay idea, but if you have a rock-solid team with an exit strategy, then I’m interested.
What warning signs do you look for?
I look for a few things. I look for how long the company has been trying to get funding and how long they have been in existence. Some warnings signs are if the company doesn’t have a reliable timeline and if they don’t have a good exit strategy. I look to see the backgrounds of the team members and the CEO, including how many and the results of the companies they have been involved with.
How much of a role does healthcare play in your portfolio? Do you see that changing?
I try to diversify, but essentially most of what I’m dealing with right now is healthcare related. It all comes down to our motto “Invest in what you know,” and as a healthcare provider, this is what I know.
What attributes do you look for in an entrepreneur?
The first thing I look for is the ability to listen. They need to be adaptable and listen to their staff and advisors. I like it when they are passionate and have a vision, but they need to be able to pivot. The industry can change and you have to have a plan A, B, C and D.
Is there other advice you could offer people who are looking to invest?
Invest in what you know. It’s our motto for a reason. I recommend that everyone do their due diligence when it comes to investments. The more knowledge that you have about trends in the healthcare sector, long-term outlook in the company – the more knowledge you have, the better.
It can be exciting, but you have to be willing to ride out the ups and the downs. It’s never a sure thing, but you can hedge your investment with information and knowledge, and I believe that is what AngelMD is the best at.
What are 3 things you’re really excited about right now?
First, I’m excited about regenerative medicine. There is a lot promise in regards to cartilage regeneration and using biological scaffolds. It’s very early still but I think it is the future of orthopedics.
I’m also very excited in regards to virtual and augmented reality in healthcare. I think the next phase of training surgeons new techniques is through augmented reality and virtual reality.
The third thing is the current interest in artificial intelligence. With big players like Apple and Amazon producing new technologies, it is setting up the infrastructure of a healthcare artificial intelligence database. I can see that being the next big thing in medical management and disease prevention.
What was the last book you recommended to someone?
It’s called Ready Player One. It’s a science fiction novel about a dystopian future where there is no transportation due to a massive oil crisis. The only way people escape their daily realities is through an alternate universe via virtual reality called “The Oasis”. It exemplifies a very scary reality of what could happen if we replace human interaction with technology, something that is not too far fetched. I also recommend “Talk Like TED” which highlights some of the best TED (Technology/Entertainment/Design) talks and looks into why those talks are so profound and how each speaker utilized some key characteristics to take a talk from “great to unforgettable”.
How did you get involved in investing?
I’ve been a practicing radiologist for 10 years, mostly in a private practice setting. Over the years I’ve considered a number of times going back and getting some additional education, potentially an MBA, to get more involved in the entrepreneurial side of things. It was pretty timely when I was approached by AngelMD and I got a chance to meet with Tobin Arthur and talk with him, and got to learn about the syndication process. This is an area where I can expand my professional expertise outside of clinical medicine. Since AngelMD was my first investing experience, there was a lot of learning on the fly, learning from other AngelMD members, and doing a lot of research. Until last year, I had no real knowledge of investing.
How has AngelMD helped introduce you to investing?
The process of investing has been fairly straight forward as AngelMD has done a good job of providing information necessary for investors to do their due-diligence before getting involved in a syndicate. Being a syndicate lead has a lot more of a learning curve. I was able to work under a seasoned syndicate lead, for the companies I have syndicated, making it a lot easier.
What do you look for when investing?
I’m looking for things I understand. I try to stay away from areas of medicine that I’m not familiar with and require more background research to get up to speed on before I put money down. There are so many thing in the medical device space that I do understand, so many that I can just stick in my small area and have plenty to look at. I look for something that fills a need that I myself have, and based on that I see how a product could solve it.
What do you look for in becoming a syndicate lead?
In order to lead a syndicate you need to know the area really well. There is no way that I could do my due-diligence on a company in an area that I don’t have pre existing expertise. Im looking for companies with defensible IPs, that fill a niche with the solution to a problem, and are in fields with barriers to entry. They have to have a strong team with a history of strong execution. They have to have a concrete exit strategy.
What advice would you give to potential physician investors?
For physicians getting into investing, the mantra of “invest in what you know” makes a lot of sense. Learning to do proper due-diligence is crucial. There are a lot of flashy things you could get distracted by in a pitch deck, if you don’t take the time to look into it you can get fooled. For physicians this isn’t something we are trained in.
For non physician investors, it’s more difficult. There is a lot of information asymmetry in investing in the medical space. The importance of having a medical expert opinion can’t be overstated.
Investing doesn’t have to be a complicated process. In fact, you can start investing in early-stage healthcare companies in about the same time it takes to go on a coffee run.
We’re an angel investment company built by doctors, for doctors, so we know the roadblocks that stand between accredited investors and the companies that they are trying to help. angelMD allows medical professionals to sort through startups by specialty, and our member review ensures that only companies with a high chance at success are recommended for investment. Our core focus is on investing in what you know, and the angelMD network has a proven track record of success.
We believe that paperwork should never stall advances in healthcare. angelMD’s innovative investment technology is aimed squarely at breaking down those barriers by simplifying the steps for both the investor and startup alike.
Rather than jumping from site to site, dealing with missing paperwork, or waiting on emails, angelMD ensures clear, concise, and compliant documentation is included right on the screen. This means that new investors can get started quicker and easier, without waiting on other parties or ever leaving their computer. The question is: are you ready to drive the future of healthcare? Join angelMD today.
Our Impact: An angelMD Case Study
angelMD is currently using the platform to facilitate investment in VICIS, Inc. in its fifth round of funding. The company has developed a revolutionary football helmet known as the Zero1, which will debut to NFL and collegiate teams this year.
angelMD simplifies the investment process, allowing non-traditional investors, such as NFL players and team doctors, to join the angelMD network and invest without the fear of missing steps or documentation that are critical to the process.
“This move really elevates the game for angelMD investors. Investments which have been reviewed by physicians, scientists and business analysts are now processed by the most intuitive investing technology available,” angelMD Chief Investment Officer Jens Francis said. “Investors can now thoroughly research a company and go from review to investment without leaving angelMD and without a single piece of paper changing hands.”
If you’re interested in contributing to the funding of VICIS, you’ll join highly-respected groups of past investors including current and former NFL players ranging from Seattle Seahawks’ wide receiver Doug Baldwin to Dallas Cowboy Hall of Famer Roger Staubach.
“Fundraising is a continual challenge for any startup, especially in health and wellness,” said Dave Marver, VICIS Chief Executive Officer and co-founder. “We are excited to find a better and more efficient way to fundraise and interact with angel investors so we can accelerate development and get new helmet technology to market even faster.”
Accredited investors interested in angelMD and VICIS can see details about this offering at https://www.angelmd.co/syndicates/vicis_inc_3.
It’s that time of year again! The TMCx accelerator at the Texas Medical Center received over 200 applications for the incoming device cohort and 19 companies made the cut. This year’s class included a number of native Houston companies in addition to applicants from Boston, San Francisco, Baltimore, Pittsburgh, Madison, Australia, and Canada. Over 300 attendees including physicians, advisors, investors, and entrepreneurs showed up in full force to support innovation at the Texas Medical Center Experts Forum.
All of the companies pitched novel solutions to problems within the healthcare sector. However there were ten companies that I believe addressed markets and trends in healthcare that stood out among the rest. This is my brief overview of the 10 best.
Orphidia has created a portable single blood drop diagnostic platform providing lab quality test results in 20 minutes utilizing microfluidic technology. 40 common lab tests can be provided using one chip. This portable device can provide an instant revenue stream for physician practices and taps into a potential 78 billion dollar marketplace. Currently seeking funding.
Polyvascular specializes in polymeric transcatheter valves for children with congenital heart disease. These valves are easy to make, non-immunogenic, and expands with the growth of the child. The valves are placed utilizing a minimally invasive technique reducing the need for open heart surgery in children. Currently they are in the preclinical stage and the valves have been successful in animal studies.
iSono is making accessible, at-home breast health monitoring utilizing 3D ultrasound and artificial intelligence. Benefits include a portable, non-irradiating, 2 minute scan with the sensitivity for detecting lesions similar to ultrasound. FDA clearance and a pilot study is expected next year. This is a 30 billion dollar market and the company is currently raising a seed round.
Bitome has developed a micro-magnetic MRI based diagnostic tool for non-invasive monitoring of the human hydration state particularly in those individuals with congestive heart or kidney failure. The portable device takes a three second read from the finger. The company is currently seeking seed funding.
Resthetics has created a patent protected device that converts waste anesthesia into a safe renewable resource that can be refurbished and sold to the original manufacturer at a fraction of the development cost. Currently seeking funding.
The Canadian team of Vena Medical has developed a thin 1.3 French fiber optic camera that can provide real-time visibility through blood making vascular procedures faster, easier, and safer with less exposure to complications and unnecessary irradiation.
NanoEar is a minimally invasive, micro-implantable hearing aid that allows discreet, continuous use without the need for batteries. The company is positioned to disrupt the market by utilizing Direct Tympanic Modulation. The first prototype is expected in September. The company is currently seeking funding in their seed round.
MouthLab from Multisensor Diagnostics is a patent-protected portable device that measures multiple vitals signs by mouth (breath and saliva) in less than a minute. AI systems are then utilized to track changes or identify abnormalities. 400 million in potential revenue. The company is currently raising a $1.5 million seed round.
With its genesis in TMC, Alleviant Medical is building a minimally-invasive transcatheter technology to treat congestive heart failure. It works by decompressing an overloaded left atrium through creating a shunt between the two atria. This is a $5 billion market. The company is currently conducting animal studies and expecting FDA clearance in 2019. They are raising a $1.5 million seed round.
Hailing from the Fannin Innovation Studio, Guidabot is an MRI-compatible robotic system that precisely targets areas of the brain with sub millimeter accuracy during minimally invasive neurosurgical procedures. Expecting FDA approval in 2020 and currently patent protected. Currently seeking funding.
This concludes my breakdown of the top ten, and I commend all 19 companies for accepting the TMCx challenge. I look forward to hearing from many of them as we begin the cohort. I also encourage all healthcare providers, investors, and entrepreneurs interested in this space to spend some time at the TMCx, attend the pitch event, get involved and become an advisor. Make sure to sign up for a free membership on the angelMD platform to gain access to the latest and greatest deals in this marketplace.