Prepare For What Investors & the FDA Are Really Looking For | Tim Looney

Need investor traction now? Bring in a fractional CMO  to package your story, de-risk your milestones, and turn Tim’s engineering plan into an investable go-to-market narrative. Let’s align tech, timeline, and TAM. Book a strategy call with Bill. https://meshagency.com/fcmo-fractional-cmo-fractional-marketing/

Founder-friendly, investor-real talk. In his second visit to LSC, Tim Looney (Northeast Biomedical) explains how to turn prototypes into investor-ready products: DHF done right, phased engineering plans, avoiding “jam it through” FDA myths, and picking the right money. https://www.linkedin.com/in/tlooney/ 

00:00 Why do MedTech founders get stuck after early traction
03:15 What do investors actually want to see before funding
07:10 Why does skipping process slow FDA and fundraising
11:45 What documentation really matters for MedTech devices
16:40 How should founders think about de risking early
21:30 What makes a MedTech product truly investor ready

Investors aren’t funding your cool device—they’re underwriting your ability to de-risk it. In this episode, Tim Looney (President & CEO, Northeast Biomedical) returns, breaking down the investor lens for med-tech: show a credible timeline, a traceable design history file, and a stage-gated plan that prevents “surprise” testing at the eleventh hour.

We dig into DHF essentials, how to avoid endless prototyping, and why “let the FDA tell us what’s missing” is the slowest, riskiest strategy. Tim shares a standout success—an EU class III clearance in two weeks thanks to a meticulous dossier—and a cautionary tale where a buyer inherited gaps and had to backfill under FDA scrutiny.

We also talk capital: why the color of money matters, how to spot investors who add operational value, and the signaling power of ISO 13485 systems, external advisors, and documented learnings.

If you’re preparing for investors—or realizing you should have prepared earlier—connect with Bill.  Translate conviction into execution-ready roadmaps and pressure-test investor fit before urgency takes over. https://meshagency.com/fcmo-fractional-cmo-fractional-marketing/ 

#MedTech #RegulatoryStrategy #InvestorReadiness

Transcript

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Founders often think they know what they need to go in front of an investor and then they show up and they get completely blindsided. Especially a MedTech company. They are completely enamored with their technology. The investor is not giving the money so they can go off and work on their cool project that they've been thinking about for a number of years. What they want to know is if they put X number of dollars in, they're going to get X number of dollars out. What's an example where it didn't go so well? Yeah, I've got a great one for that. I'm Bill Schick, Fractional CMO, and the host of LifeSci Continuum. In this episode, Tim Looney, President and CEO of Northeast Biomedical, explains how to turn prototypes into investor-ready products. You don't want to get a filing with the FDA or with a notified body and then all of a sudden say, oh we forgot biocompatibility. We didn't think we needed it. You don't want to go back because then it costs you more time and money because there is going to be things you have to repeat. There's going to have to be things that you have to do. DHF done right, phased engineering plans, avoiding jam-it-through FDA myths, and picking the right money. We have customers that go about it on their own. They acquire a technology for sale. FDA started kicking the tires and looking in closets and did not find the things they were looking for. Fail in a structured manner. Don't fail after you start looking at humans. All right, let's go. Founders often think they know what they need to go in front of an investor. And then they show up and they get completely blindsided. And there are some very specific things in the context of what you do that the investors want to see and they want to know that you have that covered so that they're, again, that's one box checked that they can feel comfortable that you aren't just some kind of, you know, crazy person with a harebrained idea. You have your stuff together. It is interesting with respect to that, that any founder of, especially MedTech company, they are completely enamored with their technology. You know, they think it's, they've been working on it for obviously a number of years. Some of them, it was a PhD thesis or, you know, something that they see as a clinical issue. But when they get in front of investors, it does change the narrative because the investor is not giving the money so they can go off and work on their cool project that they've been thinking about for a number of years. that shows a lot of promise. What they want to know is if they put X number of dollars in, they're going to get X number of dollars out. And so what they want to know is how long is it going to take and what do we have to do to take this idea that we believe is great, it's going to satisfy a user need or a clinical indication. And we need to take that and transform that into a finished product that sells that now we can liquidate the company or have a liquidity event or we can sell product or we can do something with. And so what we do here is we recognize that the customer is always going to be the subject matter expert, but then we add kind of the structure, the backbone, the, um, the stuff that they don't know that has to happen. We have these conversations like all the time, like what is a design history file? Well, this is what we're, these are the things that go into it. And as we get through this process, we're going to start to put it together, but we've had multiple customers that we've met with that. They like to have us in the room, we're happy to do it. It's one of the things that we offer to do to help answer questions on their path to liquidation, their path to success. The technology is the core of it, but then it's how do you get it through the engineering process and get it to the point where the FDA or a notified body is happy to look at it. And you know, there's always some interaction with that. I'd like to see this, I'd like to see that, but it will get them to all the things that they want to see in a product and saleable. that will go out and both satisfy the original intent of the company and then the investor's point of view, which is they need to make money. Right. They're the, you know, the investors are looking at the exit plan. Very quickly. Just tell me what a, you know, a design history file is and why it's important. The design history file, or DHF, is the documentation of the design and the process in which the design took. It has the drawings, it has the testing, it has the verification, the validation, all of the information that you gather to both prove that the product is what it is in all the different steps you took to get there. If you show up to the FDA with a modified body, you're like, here's my product, it's amazing. Here's your drawing, and a lot of times, they'll look at it and go, okay. We'll believe you, but how'd you get there? Because they want to know that you went through a proper engineering process to look at different embodiments, different conditions. How would it respond to that? And that it's going to perform, and it's not just a luck of the draw that you got there. ah The design history file is part of a larger documentation effort. There's also device master record, which talks about all the manufacturing, all the manufacturing records, the routers, and things like that. The thing about medical devices, and it's also the same for many industries, is that if something, you know, we don't want this to happen, but something occasionally goes wrong, and they need to be able to trace it all the way back through. And if you don't have your ducks in a row, they're not gonna be able to figure it out, and it becomes a much bigger deal. Then if you're like, oh, wow, that one got through testing, we thought that was fine, but the conditions changed, it was used inappropriately, not in the ideal conditions. So it is one of the things that... It seems weird when I say, you're a design engineer, by the way, but a lot of what you're gonna be doing is documentation to make sure that belt suspenders, everything is tied up, everything's traceable, and it can be reviewed by a notified body or the FDA for completeness. We look at safety, we look at traceability, we look at repeatability and consistency just to make sure that, like you said before, it's not a one-off. If there is a problem, we can track it down. And we're really protecting um patients and in a lot of cases, the users. Yep. You mentioned something, and these will probably seem like fundamentals and basics to you, but for a lot of founders, these are first time. um Events or issues and sometimes only time like they only need to learn something and apply it once where you do this every day over and over and over again. So having them understand what what each of these things are and why they're important is is key for them um. Talk for a moment about a proper engineering process. Give me give me kind of a quick definition, but give me give me an example of a good proper engineering process and then one that is improper. A good engineering process. So what we do here is we have what's called our engineering plan, which we've talked about in the past. And that is a phased approach with a list of things that need to happen. You know, in the beginning, you're doing feasibility where you're looking at prototypes, you're doing research. If you follow all of these steps and they're not meant to be, arduous, they're not meant to be constraining. They will make sure that you check the box off. That would be a good process. And it's irregardless of what type of product it's going to be. uh bad uh engineering process would be if you go in and I hate to say this because some, I don't want to sound like I'm not creative because we have some of the most creative people in the world here, but a bad process would be if you don't have the list of tasks that need to happen because there's checkpoints, there's endpoints, there's, you don't want to get and file a filing with the FDA or with a notified body. And then all of a sudden say, we forgot biocompatibility. We didn't think we needed it. like, so you don't want to go back because then it costs you more time and money to go back and there's going to be things you have to repeat. There's going to have to be things that you have to do. So we look at the way that we lay out our process is we can be pretty flexible with it, but we just have to address each one of these things. So nothing's left behind. We have regular stage gate check-ins to say is the documentation in order? Is the design in order? Do we feel it's ready to move forward? Yes or no. And it's a go or no go decision at that point. I have worked with a of companies that they end up staying in prototyping forever because they don't have a definitive list of things that they have to do in order to move it to the next step. It's interesting because I have on the rare occasion um heard someone say, well, we're just going to try to uh jam this thing through. It's a really good time right now to get something quickly and easily through the FDA. I won't name names and I won't talk about what time period that is, was, is, but um I just feel like if your You're skipping a lot of necessary steps and expecting that the FDA is going to be the ones to push back and give you the list of things that you need to do. You're not setting yourself up for success. And that's certainly not the fast way to go. No, that ends up taking a lot longer because they're going to find something. I mean, one thing on a positive note is since the MDD MDR regulations change in Europe, the FDA was working on this before. They are much more open to discussions and a lot of it's non-binding. Take advantage of those because you have to show up with something. You have to be like, here's our test plan. We think we need to cover this, this and this. You guys agree? Is there anything else you'd like to see? And everybody hates to give the FDA leeway. to be like, I want all the testing in the world. granted, sometimes I've heard that happening. We've never had that problem. We always show up with what we're aware needs to happen and just tell them so that it alleviates any, I don't know, ah stress from their standpoint. And it makes sure that you get everything done. Because the worst thing you do is set a product up and put it on the market and then start looking at a recall because you find out that you should have done this, you should have done that because you quote unquote jammed it through. They generally catch you anyways. Why play with fire? Right. And I think one of the things you're saying is that, um, where if, if this is my first attempt, my first swing at the market and I show up at the FDA and they're probably going to play, pay closer attention because I've never done this before. And their radar is particularly up for me. Whereas if, you know, I bring in a partner who has done this for 20, you know, some odd years. and has those systems and processes in place, you make their job a lot easier. Yeah, one story is we worked, I spent some time working at the interventional cardiology startup and we were working on a next generation stent system in the next generation. It was a diagnostic angioplasty balloon that would give some feedback about the lesion that we were after. And we put the stent, at the time it was in Europe, we went to market in Europe. We put all of our dossier together, because they call it a dossier, signed history files, all relatively the same thing, slightly different things. And we keep track. have checklists for each one. Um, and we had active discussions with the head of the notified body. Like, what do want to see? I want to see this test. I want to see that test. I want to this test. And it came down to the fact that we did all our homework. We followed our process. And at the end of the day, we got the product approved for sale in two weeks. Wow. Cause he knew exactly what was going to be in there. He knew there was no surprises. He just looked at it. He's like, I will look through it because I have to, but he goes, I don't expect to see surprises. He goes, As of right now, you can expect a favorable uh response and I will get back to you in two weeks. And that was unheard of at the time. And it's so much so that he then later asked if he could take our documentation package and use it to show other companies that weren't related what a good documentation package looks like. He's like, this will make my job a lot easier if they can just have an understanding of what you did and know that this is a level of which we have to have. So they're using your work as a template, an example for other companies. I don't know if they still, this is years ago, so I don't know if he's still doing it, but ah at this point he's probably retired. But this, was the head of the entire division of a very large notified body in Germany. So what, what's an example, maybe, or a story where it didn't go so well. Yeah, I've got a great one for that. We have, this has happened also multiple times. Um, we have customers that go about it on their own that either acquire a technology, mostly with acquisitions, they acquire a technology for sale. and they start looking at it, producing it, start establishing their marketing and things like that. And then all of a sudden the FDA comes knocking. Okay. So our understanding of a new product that you acquired, we'd like to take a look. Um, And we've had this, yeah, this happened this year once. um FDA started kicking the tires and looking in closets and did not find the things they were looking for. So one of the things that we had to do and the thing that was nice, one of our, you know, a couple of times our really good customers like, Hey, we need to divert as many resources as we can. We have to go back and you can never, never fake a date. But if the testing was done and you show the date in which it was done and you can then we call it signed history file remediation. As long as the testing is available and it comes out positive, you can continue to sell it. ah and we've had to do that with multiple test plans, put different things in place, uh and really kind of build people out. And they know now that like, oh, we should have checked, we should have done this, we should have made sure that this was correct. ah but we've been knocked around enough times and we've had all of our stuff reviewed by regulatory quality that like, hey, we're happy to share the process if you want to take a look. Right. I think, I think if you've gone through the process, um, and you've documented everything, you're not, you're not really afraid to share. Right. So thank you for that background and overview. So going back to sitting down with an investor, tell me a little bit about some of the things you think they're looking for in, your area, um, that make them feel better about investing, you know, sometimes even more money. Maybe it's a second round. Um, you know, in a device, what have you seen? So as you're aware, um investors, although they're interested in what the product is going to be, their opportunity to make money, but they're really investing in the team. Do they believe that this product can happen? And oftentimes it's who's represented in that team. So like I mentioned before, sitting down with investors, I mean, we have a physician or an expert in a particular field. That's great. It adds a lot of credence to the mission, but then they look at us like, you've done this before. We have our quality system is ISO 1345 certified. get audited on a regular basis every year. um so that they see that this idea can work through a structured path that will reduce their risk to be able to invest in this. So a lot of times um it's more of just an active debate. We recently uh got stuck in front of some investors in a cardiac surgery application recently. um And then they started, they want to grill me and see what we've done and see what I'm familiar with. Have you looked at this? Have you done this? Yes, yes, said I would do this, I would do that, you know, based on this reply from this test. ah but it's really about risk reduction for them at that. Right. And in, in my experience, a lot of the work that we're doing is about reducing risk. It's how far can we push it? And you alluded to this earlier, so you don't want to lose the creativity. So it's about setting up some rails and sometimes at least in our space, you get the best creative thinking when you put up those rails. But in this case, we're, just trying to keep everybody focused. Um, and again, reducing that risk. Exactly. mean, we have and it's a, it's a struggle in any regulated industry. You don't want to stifle innovation and take some chances. I mean, that's why we've set it up in the beginning. And this is the hardest thing to teach young engineers. Like go out in the lab, make some things, break it. It's okay if it doesn't work. I was working with one of our young, uh, you know, recently hired people today and she was showing me, I have her working on a little side project. And I had some ideas, some concepts I gave them to her to see it's a little bit of a test to see what she can get back with. And the best thing that I saw, she goes, I tried this, didn't work. I was like, perfect. Now you know that you have to be bigger than that, but smaller than this. So you're starting to get there, but you can't be afraid to say it didn't work. Cause a lot of people are like, I don't want them to think I failed. Fail all the time. Just fail in a structured manner. before you get to a point, don't fail after you start looking at humans. Right. Right. You definitely learn from it. Yeah. That is great. So, so having that team in place is important. And so if I, if I don't have a team, you're, you're a great plug in to my system. Are there any other things that you could recommend a founder or a company have prepared and ready for an investor? you know, in your domain. One of the things that I think is vastly overlooked that I think is very powerful is to have a list of mentors or advisors or things that people that have expertise that are not necessarily on the payroll, but have value to add, have an interest in what you're trying to do. That I think also shows a lot of depth because it's, you know, you have, okay, I know this, we'll get a little bit of input from there. We'll get input there. And it's just learning from previous experience, reducing risk, like we said before, and ultimately it's moving things forward. Makes sense. Yeah, I also don't think you don't be afraid of investors. Some of them have specific things that they're trying to get at. But they're all human. And just understand what they're trying to ask. They're not a lot of first time inventors think sky he was horrible to me. I'm like, well, he probably had some specific points he was making you didn't pick up on. Yeah, I think, I think sometimes, um, and I've been in that situation before, um, simple questions asking how or why you got to something can feel less friendly than you would, you would anticipate because they're not as excited about your tech, maybe as you are. Um, and they want to know they, they're not in your brain. They haven't been through the process and those questions are just natural questions that come about. but they can feel I was in a conversation the other day where we were asking some questions and the person was like, I feel like you're attacking me. we're like, no, we just have no idea what's going on behind the scenes. And we need that to do our work. I mean, you've got to leave your ego at the door. Anytime you're with an investor, don't walk into it like it's going to be adversarial. They're looking to partner with you. You also have to make sure that they are the right investor. Do they have expertise? Do they have friends? Do they have a network? Do have more money? Do they have access to certain industries? Right. I wonder if there are any other key investor related tips or suggestions that you could make around process or preparation. Ultimately, we're trying to help them get the investment money. You know, do this, don't do this type thing. Yeah. Yeah. I would say, I mean, the thing that the fact of the matter is, that this is a group of wealthy individuals that invested in the company through another person, but they didn't add value to it. They had made their money in other industries and so they weren't a sounding board or weren't, they were just looking at the return. Most investors, whether it's venture capital, whether it's, uh you know, angel groups are looking in a specific area of medicine or a specific type of device in which they can help. They have some expertise in it. So you do have to be careful. I always call it the different color of money. And let me tell you, like in that particular instance, we had 50 investors that we had to manage as a six or eight person company because they wanted everybody like the structure was set up and structure was very complicated. I don't understand. It was done before I got there, but keep it simple. Um, but then you had to feed information to this group of investors. that didn't understand what you were doing. And the first question I asked was, well, what are we selling? When are we exiting? And we're like, we're, just in the beginning part of the process. We were just getting started people. So it was a lot of different, it was a challenge to get the messaging on board. So they understood as we started to dilute, know, dilute them out and get the additional rounds of funding, it became a lot easier because then we had more institutional investors with subject matter expertise that were able to work with the original investors. But I would definitely make sure that the people that you're working with have background and information in what you're doing, have an interest to see you succeed and they're not just looking at a payday. That's kind of hard to do, but there are specialized groups for every type of investment. Tell me a story about where a company did get investment, but maybe it wasn't the right type of investment. It always just takes a lot longer to raise money than you'd ever like, but more than you'd ever possibly imagine a lot longer. It takes more effort and you do run into situations, I've run into these situations before, especially at venture funded companies that the term sheet and the deal comes in like 30 days after you really need it. And so how do it, it's a difficult balance because you have to message to the staff what's going on, tell them we're trying. We expect the money at any moment. I've done this numerous times. Um, But at this point, you're not a hundred percent certain when it's going to commit never lied to the stuff. Cause they find out about that and that this goes poorly. Yeah. There's, there's a lot to unpack there. Thinking back to going into the investor meeting, is there more of a structured framework or roadmap that a first time um inventor or entrepreneur could use that would help them illustrate to an investor that they really do have a more solid plan in place? Absolutely. You know, having spent time on this, because a lot of what we do tends to be in a process. uh read multiple books, taught lots of classes, done lots of projects. And so what we've developed is a combination of everything that we've learned to this point is something we call our engineering plan, which goes through, it's a phase gated approach, each one of the steps and all of the tasks. And then we have a bunch of subtasks that you need to complete or address. You can even say it's not applicable, but you need to at least address them. And that will, you can assign dates. can assign, you know, timelines, different number of resources to it. And that really gives the investors an understanding of that. Okay. You get this, you know, that this has to happen and they'll look for key things. Cause they've been through this before, like, Oh, yep. We've got this. go to production here. We need to buy equipment, but as long as you put it out there, you can even say, and we do this a lot. Like the first part of this plan is very well fleshed out. The next part needs some help, but. you know, this is one of the things that we'd be happy to meet with people and go through our plan, show them like the overview of what it can be. um and they can use that information to further their development, further their plans as they are in front of investors. And then additionally to that, from an execution standpoint, they can go and follow, all right, we need to be here by this time. Within a company, so, you know, in addition to a founder who's tackling this for the first time, give me a couple of examples of the, individuals or the teams within a company that could get value out of this framework. The framework would have, it would be pretty far reaching through the entire organization because it would not only guide the engineers to things that need to happen, ah but it would also, from an operational standpoint, when do we need to hire people, you know, and that will feed back into the budget you're looking for from the investment group. ah it would also cue outside services such as IP, when you're going to meet with the FDA and put it kind of as a something that is in the future and when it happens, but it would. it would ripple through the entire organization as kind of a basic framework for how the business should run. Okay. And is it some proprietary application that you have, or is this something that is just a set? I mean, is it a simple spreadsheet? It could be. I mean, we obviously run ours is a little bit more complicated, but, um, it did start as a spreadsheet many years ago. And right now we use a program or I guess they call it a workspace environment called monday.com to track it so that all the engineers can go in and view it. And it will send notifications when things are happening or not happening, but it could be put a simplified version could easily be put into a spreadsheet that people could review. Excellent. So somebody is looking at their roadmap and whether they're planning on talking to investors or not, most are having a sense of what this roadmap or framework or timeline looks like uh would be valuable to them at really any stage. Absolutely, I mean even if you're at the end, the beginning, the middle, it all has brackets. You assume that things are done and need to be done. Okay, so the viewers or listeners could reach out to you. We'll include your contact details below and you would sit down and walk them through it and help them understand kind of where they sit in the process and maybe where they need help. That would be great. Those are the fun things, because then you learn about all the new stuff people are working on. Excellent, excellent. All right, Tim, you've been great today. Thank you for coming on again. If you made it here, thank you. If you haven't already, like, share and subscribe to the channel. If you want to learn more about this topic, I expand on it below as well as in my LinkedIn newsletter. That's all for now. More soon.