First of a 5-part series

 

The funding process is full of excitement, anticipation, expectation – and trepidation. Understanding the investor’s perspective can make all the difference in how you approach and tailor your efforts, and ultimately in how well you succeed.

The search for funding can feel protracted, lengthy and often painful from a med device startup’s perspective. What can be hard to keep in mind is that it’s also often an arduous process on the investor side.

Sifting through the possibilities

Investment firms see hundreds, sometimes thousands, of eager companies wanting their support every year. They review business plans, schedule meetings and participate in countless pitch presentations. They spend significant effort and resources learning, studying and watching companies of interest and their target markets over time – sometimes long periods of time – in order to make careful decisions.

During their evaluation of companies, investors are looking for signs of timely, meaningful progress and results. They’ll want to see if the business is making progress on their project plans as expected. And they’ll assess how companies handle unexpected difficulties. Investors recognize that surprises will occur. The key is how the startup responds.

Value beyond financing

What a potential investee may not realize is that investors are also looking for opportunities where they can bring value beyond financing. They’ll ask themselves if the opportunity fits their charter and vision – which usually consists of the investor’s experience, background and/or interest. Maybe the investor funded other startups in the same space, represented a similar company in a successful M&A dealing, or maintains a unique interest in the market or product. An investor who has been able to generate positive gains for a company or market will naturally be more inclined to look into a similar opportunity going forward.

Only after an investor has developed confidence that a particular company offers an important value proposition, and has the ability to develop and manage that value, will they extend a term sheet. That’s followed by negotiations. Eventually, if the deal looks right for both parties, there will be an agreement to invest.

Time and effort

All of this, as explained upfront, takes time. How much time? It depends, but the process can easily stretch into months and years. Investors understand this going in. Between initial meeting and receipt of a term sheet (if that happens), there can be monthly updates, quarterly meetings and other steps along the way. The bottom is line is that it takes whatever time the investor needs to gain confidence in the company’s team, leadership and product.

Getting to this point, as in almost any relationship, involves making the effort to put yourself in another person’s shoes. The effort pays off, shedding new light and often opening doors you didn’t think possible. Investors are no different. Understanding, patience and commitment to the process will pay off.

Coming up

Watch for our next post on the investee’s perspective – and how to merge that with investor perspective to arrive at a partnership, a relationship and all that comes with it.

Larry Blankenship, Director
March 12, 2026