10 Jan The ‘Right Way’ to Pitch New Medical Device Inventions: NDAs
As part of the New Business Development (NBD) team at MediPurpose, I have encountered a number of medical device inventors that came to us for help in developing an idea they have, but are not willing to elaborate on what it is they have invented before signing a non-disclosure agreement (NDA).
However, it is a common practice among venture capital firms (VC) and companies like MediPurpose that review new medical device ideas on a regular basis to not sign NDAs, especially in the early stages of a budding relationship. There are a number of reasons for this, such as some mentioned in the VentureStab.com blog, Why Startups Shouldn’t Ask Investors to Sign NDAs:
- VCs review many ideas a day, and having to sign an NDA before reviewing each idea requires a lot of time and resources (e.g., lawyer fees) that could be put towards investing in a really worthwhile project.
- NDAs raise concerns about the medical device innovator’s ability to trust their potential partners, which would be tricky going forward.
I can appreciate that medical device inventors feel protective about their “baby,” and I recognize the prudence in taking steps to protect their medical device invention’s intellectual property (IP). However, I firmly believe that there is a right way to do that, which I believe should include an emphasis on doing it without chasing away potential investors.
Prospective “buyers” to whom the medical device inventor pitches naturally need to know something about the medical device before they can decide whether they want it or not. Thus, the inventor has to be prepared to give out some basic information about his or her idea to get the idea out there, but without providing too much proprietary detail that jeopardizes their IP.
The MediPurpose NBD team’s goal is to partner with medical device inventors and help them if we can. Our medical product development process works such that in the beginning “idea stage,” we provide a form for the inventor to give us a general description about the idea. This form was carefully designed to gather strictly non-proprietary information that “safely” introduces the idea. If that idea is something that we can help develop and commercialize, we would then sign an NDA before proceeding any further.
In order to help innovators pitch their ideas — whether to MediPurpose or any other investor — my next blog post will discuss the elements that should be included in any pitch, which is a basic information packet that allows medical device innovators to share just enough information to get an investor interested, but without giving away too much.
What is your experience with NDAs — either to protect your medical device IP or to examine an idea for possible funding/development support? How have you balanced the need to protect IP without wasting resources or discouraging examination of the idea?