LeagueMed offers roadmap for MedTech start-ups and investors

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A new whitepaper from the founders of LeagueMed provides a practical overview of how to transform early-stage MedTech innovations into viable companies. The paper, titled “Financing the Medtech Journey: From Innovation to Commercialization,” details the foundational steps of company formation, licensing, product development, and clinical trials, as well as the funding strategies that drive growth in sectors such as pharmaceuticals, medical devices, and digital health.

LeagueMed is a new community-based investment banking platform designed specifically for physicians and healthcare professionals to invest in innovative MedTech and Health IT companies. For those startups, the road from innovation to commercialization is long and beset by challenges, but is incredibly promising, according to the whitepaper by LeagueMed CEO John J. Gallagher, Jr. and Director of Business Development Richard Purcell. Their whitepaper is designed to help innovators bridge the gap between discovery and commercialization.

“For MedTech and Health IT companies, the road from invention to commercialization is multifaceted and complex,” Gallagher and Purcell write. “Organizational growth not only requires significant funding, but also expertise across domains, a challenging task for early-stage companies that are often led by a small team of founders.”

Starting with the science

A major source of early funding is the National Institutes of Health, which Gallagher and Purcell describe as the “engine of medical innovation” in the U.S, funding biomedical research to the tune of more than $48 billion in 2024. This money, funneled researchers at universities in the form of grants, forms the backbone of a process known as technology transfer, or how inventions from academic or research institutions are licensed for commercial use. This is often the first major step in building a new health care company for some entrepreneurs. Patents and licensing are often vital to protecting a company’s competitive advantage.

Once intellectual property is secured, entrepreneurs must negotiate licensing deals, which can be a critical turning point in company formation. These agreements govern the rights to use scientific discoveries and set the terms for future development and revenue-sharing.

Simply having a promising technology isn’t enough. Founders must also build a company around it by hiring the right team, validating the product concept, and charting a development path that aligns with regulatory and market expectations.

“Understanding the clinical pathway is essential for any life sciences venture,” the authors write. “It defines the capital needs, the risks, and the potential return on investment.”

Finding the money

Important for any startup founder or investor is understanding the funding sources available at each stage of a company’s growth. The paper outlines the differences between government-backed programs like SBIR and STTR grants, and private-sector options such as seed funding, venture capital, and private equity.

Health care start-ups often face what the whitepaper calls a “funding gap,” the space between early research funding and the substantial investment required for commercialization. The good news is there are practical strategies for overcoming that hurdle, including milestone-based financing and building strong relationships with strategic partners, Gallagher and Purcell write.

Each area has unique challenges and investor expectations. Medtech start-ups, for instance, must navigate device regulations and payer reimbursement strategies, while digital health ventures often face issues around data security, user engagement, and software validation.

Despite the obstacles, innovators who understand the process — and are prepared for the realities of funding and development — can bring transformative solutions to market.

LeagueMed: A resource for a growing ecosystem

University spinouts, physician-led ventures, and cross-industry collaborations are increasingly common, but many founders lack a clear roadmap. LeagueMed founders note that the whitepaper is a guide for anyone looking to navigate the journey from lab bench to market, and that whether you're a scientist, a clinician, or an investor, understanding the steps and the funding landscape is key to success.

“LeagueMed’s team of experienced MedTech, healthcare, and finance executives offers a broad range of advisory services to help our clients navigate the complexities of finance and commercialization,” Gallagher and Purcell write.

READ THE PAPER:

"Financing the Medtech Journey: From Innovation to Commercialization" is available for free download for Medical Economics readers.