Using IP to Attract Investors in a HealthTech Company – Expert Insights from Potter Clarkson
Potter Clarkson specialises in Life Science intellectual property, an award-winning firm with paramount experience in working with health and life science businesses, they are home to one of the largest specialist life sciences IP teams in Europe.
Since joining forces with MedCity in 2021, Potter Clarkson has bought specialist intellectual property expertise in working with investors and entrepreneurs to the MedCity Investment Hub.
This month we hear from Potter Clarkson on using IP to attract investment in a HealthTech company.
HeathTech companies are convergent companies combining the advancements in the traditionally “technology” sectors with the traditionally “pharma, health and well-being” sectors. They are largely technology based, consumer-centric companies that provide solutions to issues related to peoples health and well-being, both physically and mentally.
In the past few years, the number of HealthTech companies and the interest in them has mushroomed. This growth is expected to continue as the public’s awareness of health and well-being issues continue to improve, alongside the increase in the amount of funding available for these companies.
Attracting Funding for HealthTech
While more and more funding is now becoming available for HealthTech companies, a mix of factors still create hurdles for any HealthTech looking to raise capital.
for example, the long approval time associated with HealthTech and biotherapeutic solutions which in turn requires more time and funds before a return is seen can be off-putting to certain investors. Additionally, HealthTech companies must navigate their way through new regulatory requirements for such convergent technologies as well as the complexities of integrating with existing healthcare systems.
Therefore, raising money as a HealthTech company is no mean feat. So, how can a HealthTech company make themselves attractive to investors?
- Get Your Story Straight!
While society is becoming more understanding of the vast number and types of health and wellbeing issues, people are still slow to appreciate the need for solving issues that they might not have experienced first-hand. The market can often be seen as nuanced and small to people who have never experienced, or sometimes even heard of, the conditions that companies are trying to treat.
A clear narrative on the problem you are trying to solve, how you plan to solve it, and why there is a need for your technology is a good place to start.
2. Understand Your IP
HealthTech companies are innovative companies, often rich in IP. From drug repurposing and dosing to software in a tracking app, to wearable devices.
Weather or not you are ready to file for registered IP rights (e.g., patents, registered trademarks and designs), it is still vital to identify what IP you have and the best way to protect it.
One way to do this is to put the product in the middle of the page and then write down all the different types of IP around the page. For instance:
- The way the product works (e.g., technical features) may give rise to a patent application.
- The design (e.g., look) of the product may be protected by a registered or unregistered design.
- The name of the company and/or the name of the product may be protectable by a trademark.
- Trade secrets may be used to protect information that you wish to keep in the company, such as the optimised methods and processes for making your product. Once you know what IP you have, you can then decide what to do with it.
3. How Are You Going to Exploit Your IP?
Some initial considerations:
- What territories are you interested in? Where are your clients and competitors based?
- Are you looking to license out the technology to third parties?
- Are you planning on partnering with another company?
- Are you going for the private market or the NHS?
- What is your IP budget? No matter how big or small it is, you must have an idea of your budget and make sure any money you spend on IP is working in the interest of your overall business plan.
The answers to the above questions should be written down and form the beginnings of your IP strategy. In summary, what IP do you have? And what are you planning to do with it?
4. Surround Yourself With the Appropriate Team
Fundraising in the HealthTech field can be difficult, but you don’t have to go it alone. In the early stages, a company is unlikely to have a product ready to take to market. Therefore, investment is likely to be based on ideas, the business plan, and your early results.
A qualified IP professional, such as a patent attorney, can help you get your IP story straight before approaching an investor. A patent attorney can carry out an IP audit of the company and help you to prepare an IP strategy.
It is important that anyone you bring into your team understands your technology.
In HealthTech, the innovations often involve a mix of pharmaceuticals, AI, and medical devices. At Potter Clarkson, we understand the value for companies, however, big or small, to have a cross-disciplinary team at their disposal. Therefore, for each client, we put together bespoke teams that bring together exactly the right mix of the best qualified specialists from our life sciences, biotech, engineering and AI and software teams.
Summary
The number of HealthTech companies has surged recently, driven by increased public awareness and funding. However, raising capital remains challenging due to long approval times, regulatory hurdles, and integration complexities. To attract investors, HealthTech companies should clearly articulate their mission, understand and protect their intellectual property (IP), develop a strategy for exploiting their IP, and build a knowledgeable team.