Feasibility Report Final -...

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INNACCEL

REPORT ON

MEDTECH ACCELERATOR

FEASIBILITY STUDY

FOR

INDIA

Prepared by:

Strategic Development Services

+1 614-946-8660 www.sdsecdev.com

June 2013

Strictly Private & Confidential Strategic Development Services 614-946-8660 www.sdsecdev.com

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ACKNOWLEDGEMENT-

The!SDS!Project!Team!is!grateful!for!the!assistance!received!from!all!participants!in!this! feasibility! study.! ! In! particular,! the! InnAccel! team! of! Ramakrishna! Pappu,! A.!Vijayarajan! and! Siraj! Dhanani! were! instrumental! in! providing! insight! for! this!project.!!We!also!want!to!thank!the!more!than!thirtyDfive!other!individuals!that!were!kind!enough!to!take!time!from!their!schedules!to!provide! input! for!this!study,!and!the!fifteen!participants!in!our!focus!group!survey.!!


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Table-of-Contents-

ACKNOWLEDGEMENT- 2!EXECUTIVE-SUMMARY- 5!I.---INTRODUCTION/BACKGROUND- 8!A.#InnAccel# 8!B.#Strategic#Development#Services# 8!C.#Business#Incubation#–#General# 9!D.#Business#Incubation#=#India# 12!E.#Business#Incubation#=#MedTech# 14!

II.--PROJECT-OBJECTIVES- 16!III.--METHODOLOGY- 17!A.#Secondary#Market#Research# 17!B.#Primary#Market#Research# 17!1.!OneDonDOne,!InDDepth!Interviews! 17!2.!Focus!Group!Survey! 18!

IV.-FINDINGS- 18!A.#Respondent#Profile# 18!B.#MedTech#Start=up#Ecosystem# 19!C.#Market#Demand# 20!1.!Academic!Institutions! 21!2.!Clinicians! 23!3.!Government!Agencies! 24!4.!Investors! 25!5.!MedTech!Companies!D!Large! 26!6.!MedTech!Companies!StartDup! 27!7.!Market!Demand!–!Conclusion:! 30!

D.#Key#Services# 30!E.#Barriers# 32!1.!Lack!of!MedTechDFocused!Incubation! 32!2.!Lack!of!Affordable!Lab!Space!and!Prototype!Development! 32!3.!Lack!of!Access!to!Capital! 33!4.!Lack!of!Domain!Expertise! 34!5.!Lack!of!(a!developed)!MedTech!Cluster!(although!nascent!and!growing)! 35!6.!Others! 37!

F.##Business#Model#Validation# 38!1.!Interview!Responses! 40!2.!Focus!Group!Responses! 42!

G.#Community#and#Stakeholder#Support# 42!H.#Location#and#Space#Analysis# 43!1.!Primary!Research! 43!2.!Secondary!Research! 44!3.!Space!Estimates! 46!


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V.-RECOMMENDATIONS- 46!A.#Overall# 46!B.#Provide#Key#Components# 47!C.#Business#Model#Recommendations# 48!D.#Source#for#Success# 49!E.#Conclusions#and#Next#Steps# 50!1.!Geographic!Market!Served! 50!2.!Facility!Considerations! 51!3.!Next!Steps! 53!

APPENDICES# 54!#!!

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EXECUTIVE-SUMMARY-

This!MedTech!Accelerator!Feasibility!Study!has!been!initiated!by!InnAccel,!a!private!sector! venture! founded! by! successful,! experienced! healthcare! and! medical!technology! (MedTech)! executives,! Siraj! Dhanani! and! A.! Vijayarajan.! Both! have!extensive! experience! in! the! startDup,! and! large! corporate! MedTech,! IT! and!healthcare!industries.!The!founders'!vision!is!to!develop!an!ecosystem!to!accelerate!“affordable! innovation”! in!MedTech! and!develop!products! aligned! to! the! needs! of!the!Indian!and!emerging!markets!globally.!!

Business!incubation/acceleration!is!a!proven!concept!to!spur!innovation!throughout!the! world,! and! dramatically! increases! the! success! rate! of! startDup! businesses,!particularly! those! that! are! technologyDfocused.! India! has! approximately! 120!technology! incubators,!most!of!which!are!publicly! funded,!but!none!are!MedTechDspecific.!This!indicates!a!huge!gap!in!the!marketplaceD!as!MedTech!is!a!key!area!of!focus!for!incubators!globallyD!being!a!$300!billion!market.!The!MedTech!market!in!India!is!poised!to!explode!to!$33!billion!by!2025,!creating!a!significant!opportunity!to!profitably!accelerate!MedTech!startups!targeting!this!market.!!

This! Feasibility! Study! was! conducted! over! 8Dmonths! and! included! extensive!secondary! as! well! as! primary! research.! Primary!market! research! included! 35! inDdepth,!oneDonDone!interviews!with!a!broad!crossDsection!of!stakeholders,!and!fifteen!focus! group! participants.! Stakeholders! from! academia,! clinics/hospitals,!government! agencies,! investors! as! well! as! large! and! small! MedTech! CEOs! were!interviewed!from!October!2012!through!April!2013.!

Our! research! found! that! requisite! services! and! infrastructure! specific! to!MedTech!innovation! does! not! exist! in! India,! and! there! is! tremendous! pentDup! demand! for!such! an! ecosystem! by!MedTech! startups.! Respondents! indicated! that! the! current!ecosystem!was!subDoptimal!with!key!gaps!that!were!barriers!to!success!for!startups.!Some!of!the!key!gaps!identified!are:!

• Access#to#clinical#partners#and#technical#resources#• Access#to#capital##• Product#engineering,#development,#and#regulatory#expertise##• Access#to#labs#and#equipment##• Lack#of#ideas#and#understanding#of#clinical#needs##• Lack#of#good#team#members#and#managers.##

InnAccel! intends!to!take!a!holistic!approach!to!MedTech!innovation,!and!provide!a!complete!bouquet!of! services!and! infrastructure! specific! to! the!MedTech! industry.!


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The!analysis!revealed!the!key!elements!that!InnAccel!needs!to!provide!in!order!to!be!successful!are:!!

• Clinical,#academic#and#technical#partner#networks##• Capital#and#access#to#capital##• Product#design,#development,#and#regulatory#support##• Physical#lab#infrastructure#(including#prototyping#facilities).##

These!needs!were! reDvalidated!by! respondents,! and!viewed!as!barriers! to! success!for! startDup!MedTech! ventures.! Our! study! indicates! that! InnAccel! is! filling! a! huge!gap!in!the!market,!and!providing!a!sorely!needed!resource!for!innovators.!Further,!a!100%!of!all!respondent!groups!reacted!positively!to!the!concept!and!validated!the!demand!for!a!MedTech!Accelerator.!

The! current! startup! respondents! were! emphatically! positive! and! vocal! about! the!need! for! a! MedTech! Accelerator.! Startups! and! entrepreneurs! provided! strong!validation!for!InnAccel’s!fee!+!equity!stake!model!for!acceleration!services.!90%!of!respondents! reacted! favorably! to! this! model,! when! accompanied! with! access! to!capital.! Access! to! capital! is! a! key! element! of! success,! and! InnAccel! intends! to!selectively!provide!earlyDstage! funding! to!highDpotential! startDups,! in!exchange! for!minority! equity! stakes,! which! is! a! significant! plus.! Based! on! historical! success! in!other!geographies!as!well!as!our!experience!and!information!developed!during!the!course! of! this! study,! we! believe! that! the! forDprofit,! investment! portfolio!model! is!best!suited!to!the!vision!and!mission!of!InnAccel.!By!far,!the!most!critical!element!of!success! of! this! model! is! the! experience,! reputation! and! domain# expertise! of! the!principals!(Dhanani!and!Vijayarajan).!!

Once!we!concluded!that!development!of!a!MedTech!Accelerator!is!not!only!feasible,!but!also!sorely!needed,!we!made!recommendations!to!InnAccel!which!include:!!

• Development# of# a# 15F20,000# square# foot# accelerator# facility,# which#will#accommodate,# and# provide# lab# infrastructure,# to# 15F20# earlyFstage#MedTech#firms#

• Provide#an#engineering#and#prototype#development#platform#• Continue#to#develop#strategic#partnerships#with#sources#of#IP#• Provide#MedTechFspecific#business#support#services#• Serve# as# the# focal# point# for# MedTech# networks# (mentors,# advisors,#

clinicians,#service#providers)#and#cluster#development#• Provide#additional#sources#regarding#access#to#capital#

The!study!found!emerging!MedTech!clusters!in!several!parts!of!India,!and!a!growing!interest! in! MedTech! commercialization! and! innovation! by! most! academic!institutions.!Evidence!of!nascent!cluster!development!was!found!in!all!of!the!major!


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population!centers,!but!Bangalore!continually!emerged!in!our!research!as!the!most!logical! choice! for! the! initial! location.! Bangalore! has! a! concentration! of! research!institutions!(both!public!and!private),!as!well!as!the!most!advanced!entrepreneurial!culture!in!India,!and!a!GDP!of!$83!billion.!Bangalore!is!also!recognized!globally!as!a!technology! hub,! and! is! one! of! the! top! preferred! entrepreneurial! locations! in! the!world.!70%!of!the!top!venture!capital!firms!in!India!have!a!presence!in!Bangalore.!!

InnAccel!will! be! highly! selective! regarding! tenants! for! the!Accelerator.! Sources! of!potential! tenants! will! come! primarily! from! academic! and! research! institutions!initially,!and!will!subsequently!be!augmented!by!various!sources!such!as!potential!investors,! hospitals,! corporate! spinDouts,! independent! research! institutions,!community!MedTech!entrepreneurs!and!to!a!lesser!degree,!startDups!attracted!from!outside!the!Karnataka!region.!

The! logical!next!step! is! to!develop!a!business!and!operating!plan! for! the!MedTech!Accelerator!which!details!and!expands!upon!the!mission!and!vision,!and!serves!as!a!guide! to! successful! operation! in! accordance! with! National! Business! Incubation!Association!accepted!best!practices.!


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I.---INTRODUCTION/BACKGROUND-

A.#InnAccel#

This! MedTech! Accelerator! Feasibility! Study! has! been! initiated! and! funded! by!InnAccel,!a!private!sector!venture!led!by!two!successful,!experienced!healthcare!and!medical!technology!(MedTech)!executives,!Siraj!Dhanani!and!A.!Vijayarajan.! !These!executives!have!experience! in!startDup!and! large!corporate!MedTech! industry,!and!in!the!IT!and!healthcare!industries.!

Dhanani! served! as! the! coDfounder! and! CEO! of! PharmARC,! a! pharmaceutical!marketing! analytics! and! consulting! firm! acquired! by! IMS!Health! in! 2012.! ! He! has!prior!experience!in!healthcareDrelated!investment!banking,!and!is!an!angel!investor!in!MedTech!and!IT!startDups.!

Vijayarajan!has!had!a! thirtyDyear! career! in! the!MedTech!and! IT! industries,! having!served!as!Chief!Executive! at!Wipro!Health!Sciences,! head!of!product!development!for! GE!Medical! Systems,! India,! and! product! development! consultant! to! Perfint! as!well!as!a!technical!advisor!to!Aravind!Eye!Hospitals.!

The! coDfounders! have! a! vision! to! develop! an! ecosystem! to! accelerate! “affordable!innovation”! in!MedTech! to!produce! affordable,! innovative!products! aligned! to! the!needs! of! Indian,! and! developing!markets! globally.! ! Specifically,! InnAccel! seeks! to!capitalize!on!indigenous! innovation!in!MedTech!to!provide!products!that!meet!the!priceDperformance! requirements! of! lowD! and! middleDincome! consumers! in!developing! economies,! through! the! development! of! MedTechDspecific! technology!business! incubators! (TBIs),! or!MedTech!Accelerators! .! ! InnAccel! intends! to! take! a!holistic! approach! to! development! of! the! MedTech! sector! by! providing! a!comprehensive! suite! of! critical! acceleration! services! in! addition! to! infrastructure!including!affordable!laboratory!and!prototype!development!space.!!

InnAccel,!with!private!investment,!seeks!to!catalyze!forDprofit!MedTech!Accelerator!development! in!India,!while!addressing!a!huge!social!need.! !This!aims!to!reinforce!the!viability!of!the!model!and!can!lead!to!public!investment!under!a!public/private!partnership!model!for!subsequent!MedTech!TBIs!to!be!developed!throughout!India.!!Additionally,!InnAccel!has!a!partner!investment#fund!anticipated!primarily!for!earlyDstage!seed!capital!investments!in!client!firms!(in!exchange!for!equity!participation).!

B.#Strategic#Development#Services#

Strategic!Development!Services!(SDS)!is!an!economic!development!consulting!firm,!with!a!niche!specialty!in!business!incubation.-


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SDS!has!authored!over!sixty!feasibility!studies!related!to!business!incubation,!and!is!a!regular!presenter!at!the!National!Business!Incubation!Association!(NBIA)!Annual!Conference! workshops! and! Fall! Training! Institute,! primarily! on! the! topics! of!incubator!feasibility,!fundraising!and!rural!incubation.! !Also,!SDS!was!a!sponsor!of,!and! an! editorial! contributor! to,! NBIA’s! publication! A# Practical# Guide# to# Business#Incubator#Marketing.!!!

A!feasibility!study!is!designed!to:!

• Assess! relative! demand! for! (MedTech)! incubation! space! (facility)! and!services.!

• Identify!strategic!partners!and!sources!of!IP!that!could!support!the!success!of!a!sectorDspecific! technology! incubator;!and! identify!gaps/barriers/obstacles!to!success!that!will!need!to!be!addressed.!

• Validate! findings! through! comparison! with! successful! models! and! best!practices.!

• Make! recommendations! regarding! the! incubation! model! with! the! highest!probability!of!success.!

• Develop! a!multiDyear! business! strategy! for! developing! and! implementing! a!MedTech!forDprofit,!investment!portfolio!business!incubation!model!

In!order!to!meet!these!objectives,!SDS!indicated!in!its!proposal!that!the!deliverables!would!include!the!collection!of!data!and!information,!analysis,!and!development!of!recommendations!around!the!following!topics:!

• Market!demand!• Existing!support!and!services!gaps!• Evaluation!and!recommendation!of!the!most!appropriate!incubation!model!• Feasibility!of!a!facilityDbased!initiative!

C.#Business#Incubation#–#General#

Most!of! the!approximately!7000! incubators!around!the!globe!are!operated!as!notDforDprofit! institutions.! ! These! incubators! are! sponsored! by! government! (as! is! the!case! in!many! emerging! economies),! university! or! research! institutions,! economic!development! organizations! (EDOs)! or! a! mixture! of! the! above.! ! Government!incubators!are!sponsored!at!the!national,!state!or!local!level!of!government.!!Of!the!approximately! 1500! incubators! in! North! America,! 94%! are! organized! as! notDforDprofit!corporations,!with!6%!formed!as!forDprofit!and!other!entities.1!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1!The!6%!figure!is!based!on!NBIA!membership!statistics!and!therefore!does!not!include!perhaps!hundreds!of!forDprofit!incubators!that!are!not!members!of!NBIA.!


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NBIA!member!organizations!are!sponsored!by:!

Sponsor# Percentage#EDOs! 31!Government! 21!Academic!Institutions! 202!No!Sponsoring!Entity! 8!Hybrid! 8!ForDProfit!Entity! 4!Others! 8!

ForDprofit!incubators!are!characterized!by!three!distinct!business!models:!

1.!!Real-Estate:!Return!on!investment!is!based!on!rental/lease!income.!

2.! Corporate:! Large! corporations! (Boeing,! Motorola,! HDP,! etc.)! develop!“internal”!incubators!to!commercialize!proprietary!IP!in!a!context!outside!of!the!existing!bureaucracy!inherent!to!large!corporations.!

3.! Investment- Portfolio:! Based! on! return! on! investment! from! portfolio!companies!after!a!! liquidity! event.! ! This! model! is! characterized! generally!by!experienced,!nicheDindustry!professionals!that!have!expertise!in!growing!ventures,!such!as!Dhanani!and!Vijayarajan,!as!founders!of!the!initiative.!

Since! the! latter! half! of! the! twentieth! century,! EDOs! in! marketDbased! economies!focused! primarily! on! business! attraction! strategies,! utilizing! financial! and! tax!abatement! strategies,! as! well! as! other! assets! to! influence! relocation! decisions.!!However! since! the! midDtoDlate! 1990s! (concurrent! with! the! development! of! the!internet),!EDOs!have!been!shifting!away!from!attraction!strategies!to!focus!more!on!retention!and!a!“grow!your!own”!philosophy.! !This!shift!towards!entrepreneurship!also! coincides,! and! is! compatible! with,! the! emergence! of! the! knowledgeDbased!economy,! and! is! consistent!with! the! strategy! implemented! by! the! Government! of!India.!!Thus!competitive!advantage!becomes!research!and!innovation!D!the!creation!and! transformation! of! knowledge! into! new!products,! processes,! and! services! that!meet!market!needs.!Simultaneously,! the!ubiquity!of!the! internet!has! literally!made!entrepreneurship!available!to!the!masses.!

InnovationDBased! Economic! Development! (IBED)! is! grounded! in! technology! and!entrepreneurship.! Technology! businesses! historically! have! high! job! creation!potential,! highDgrowth! and! higher! than! average! wages! in! virtually! all! economies,!developed!or!otherwise.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2!Includes!two!and!fourDyear!colleges,!universities!and!technical!colleges!


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The! term! “Regional! Innovation! System”! (RIS)! is! a! relatively! new! concept! in!economic!development.!The!key!elements!of!a!Regional!Innovation!System!involve!corporations,! research! institutions,! government! agencies! and! technologyDsupport!organizations!linked!together!by!an!“innovation!intermediary”!or!champion!that!can!be!an!EDO,!an! incubator,!or!other!technologyDfocused!organization.! !Leading!EDOs!are!attempting!to!create,!support!and!sustain!these!systems#of#innovation!to!enhance!entrepreneurship!and!accelerate! commercialization!across! their! regions.! ! In!many!ways,!incubators!act!as!“miniDRISs”!!!

One! must! keep! in! mind! that! anything! can! be! called! an! incubator.! ! In! countries!throughout! the! globe,! the! incubator! label! is! applied! to! entities! that! bear! no!resemblance!to!a!business!incubator.!!Many!of!these!soDcalled!incubators!are!simply!landlordDtenant!relationships!without!any!support!program!whatsoever.! !Buildings!do! not! commercialize! new! businesses,! only! people! and! programs! do.! ! A! business!incubator!is!defined!as:!

“A! location! in! which! entrepreneurs! can! receive! pro=active! support,! and! access! to!critical! tools,! information,! contacts! and! resources! –! that# may# otherwise# be#unaffordable,# inaccessible# or# unknown# –# and! in! which! the! management! team!facilitates! each! business! in! a! development! strategy! such! that! investments! and!actions!are!leveraged#for#value#to,#and#growth#of,#businesses#served#by#the#incubator.”3!

Therefore,! the! accepted! definition! of! a! business! incubator! is! characterized! by! the!implementation!of!a!program!that!includes:!

• Mentoring!and!experienced!advisors!with!domain#expertise!• Coaching!and!constant!evaluation!of!progress!towards!getting!to!market!• Small!increments!of!affordable!and!appropriate!space!• Shared!business!services!• Access!to!various!and!appropriate!capital!resources!• Networking!and!development!of!strategic!partners/relationships!• SharedDspecialized!equipment!in!the!case!of!niche!TBIs!

An! incubator! is! designed! to!meet!more! than! just! the! space! needs! of! startDup! and!early!stage!companies.! !It!is!the!commercialization!services!and!support!that!make!the! difference.! ! The! case! for! business! incubation! is! strong.! ! According! to! the! U.S.!Small! Business! Administration,! approximately! 75D80%! of! all! new! startDup!businesses! fail! within! the! first! five! years.! ! On! the! other! hand,! NBIA! studies! have!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3!Steve!Wright,!GTE!and!Barbra!Harley,!Claggett#Wolfe#Associates#


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consistently! found! that! 87%! of! companies! that! graduate! from! an! incubation!program!survive!at!least!five!years!or!more!after!they!leave!the!incubator.!!!

D.#Business#Incubation#;#India#

The! Government! of! India! has! supported! the! development! of! a! countrywide!incubation!system!for!over!two!decades.!!TBI!development!is!accomplished!through!the! Department! of! Science! &! Technology! (DST),! and! administered! through! the!National!Science!and!Technology!Entrepreneurship!Development!Board!(NSTEDB).!

“Innovation! and! entrepreneurship! are! on! the! rise! in! India! with! highly! qualified!individuals! taking! the! initiative! to! set! up! innovative! ventures.! ! There! has! been! a!continuous! growth! of! knowledge! based! industries! in! India! for! the! last! couple! of!decades! which! makes! India! an! attractive! destination! for! technology!entrepreneurship!and!early!stage!startDups.”4!

NSTEDB!has!been!instrumental! in!establishing!and!overseeing!the!implementation!of!TBIs!in!India.!!NSTEDB!incubators!are!formed!as!collaborations!with!research!and!academic! institutions.! There! are! approximately! 120! TBIs! in! India,! with! 53! in! the!NSTEDB!portfolio,!40!in!software!development!parks!(sponsored!by!the!Ministry!of!Communications! and! Information! Technology),! and! 30! sponsored! by! other!governmental! departments! and/or! financial! institutions.! ! Combined,! these!incubators! graduate! approximately! 500! new! companies! per! year,! 60%! (300)! of!which!are!technology!business!enterprises.!Also,!NSTEDB!provides!seed!funding!to!selected!incubator!tenant!firms!in!the!range!of!Rs.!20!to!50!lakhs.!!

DST! and! the! IndoDUS! Science! &! Technology! Forum! (IUSSTF)! have! partnered! on!building! technology! entrepreneurial! programs! in! India! for! several! years.! ! Their!objective! is! to! create! an! entrepreneurial! ecosystem! in! India,! and! boost! the!entrepreneurial!spirit!in!India’s!academic!and!scientific!enterprises!through!various!efforts.! ! The! IUSSTF’s! efforts! have! also! focused! on! funding,! and! have! fueled! the!development! of! seed! funds! such! as! the! Indian! Angel! Network,! Mumbai! Angels,!Technology!Entrepreneur!Chennai!Fund,!and!others!to!the!extent!that!total!venture!investment! increased! to! Rs.! 3888! crore! (nearly! $800! million)! in! 2008,! funding!eighty!separate!deals.!

There! is! also! the! Stanford! India! Biodesign! (SIBD)! program! located! in! New! Delhi.!!The!intention!of!this!program!is!to!“train!the!next!generation!of!medical!technology!innovators!in!India.”!!However,!this!is!primarily!a!fellowship!program,!and!is!limited!to!four!(4)!fellows!per!year.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4!Development#Eco#System#for#Knowledge#to#Wealth#Creation,#NSTEDB!2009!


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The! Indian! Institute! of! Management,! Bangalore! published! a! working! paper! (No.!358)! in! 2012! titled! Technology# Business# Incubators# (TBIs):# A# Perspective# for# the#Emerging#Economies.! !SDS!has!reviewed!this!document!in!detail.!An!analysis!of!this!paper’s! references! finds! that!49!of!82!references! (58%)!are!at! least! ten!years!old,!dating!as!far!back!as!1959!and!1965.!!The!body!of!research!on!business!incubation!has!progressed!dramatically!in!the!last!ten!years.!!Although!some!of!the!conclusions!and! recommendations! are! not! inaccurate,! this! document! should! not! be! used! as! a!guideline! by! InnAccel.! ! The! authors! (a! doctoral! scholar! and! university! professor)!rely! primarily! on! academicDdriven! research,! rather! than! obtaining! upDtoDdate!marketDdriven!outcome!information.!!!

The! aforementioned! report! treats! the! Indian! economy! as! a! whole,! in! terms! of! a!developing!(emerging)!economy.!!We!believe!that!taking!this!position!discounts!the!great! strides! that! have! been!made! in! the! development! of! the! Indian! economy! in!general! over! the! last! two! decades,! and! specifically! more! developed! economies!within!India,!such!as!those!of!Bangalore,!Chennai,!Mumbai!and!New!Delhi.!!!

The# First# Status# Report# on# Technology# Business# Incubation# in# India,! published! by!NSTEDB! and! ISBA! in! 2009! is! a! helpful! guide.! ! The! NSTEDB! incubators! are!technologyDfocused!in!the!following!areas:!

• Information!and!Communications!Technologies!(ICT)!• Biotechnology!• New!materials!and!nano!materials!• Instrumentation!and!maintenance!• Manufacturing!and!energy!• Design!and!communications!(media!and!“infotainment”)!• Health!and!pharma!• Agriculture!and!allied!fields!• Energy!and!environmental!

As! with! any! statistical! population,! the! Indian! governmentDsponsored! incubators!perform! on! a! bell! curve.! !While! some! have! had! excellent! results! in! creating! new!TBE’s! as! well! as! commensurate! jobs! and! wealth,! others! have! simply! been! the!proverbial!“landlordDtenant”!relationship,!which!does!not!meet!our!definition!of!an!incubator.! ! The! majority! that! lie! between! the! extremes! may,! for! example,! offer!services,!but!those!services!offered!are!not!sectorDspecific!and!therefore!the!value!is!diminished.!

As! of! 2009,! the! nineteen! incubators! that! were! part! of! the! NSTEDB! TBI! program!incubated! nearly! 400! technology! businesses.! ! Eleven! of! the! nineteen! report! a!success! rate! (still! in!business)!of! thirtyDthree!percent,!with!a! success! range!of!11D

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89%.!!Given!that!this!is!a!government!run!program,!in!an!emerging!economy,!with!nearly! twenty! less!years!of! incubation!experience! than! in! the!U.S.,!we!believe! that!these!numbers!are!not!only!encouraging,!but!will!continue!to!climb!towards!the!U.S.!average!of!87%.!

In! our! extensive! research! on! this! project,! we! find! no! evidence! of! any! MedTechDspecific!incubator!anywhere!in!India,!despite!the!existence!of!pentDup!demand.!!This!strengthens!the!case!for!the!InnAccel!proposition.!

E.#Business#Incubation#;#MedTech##

MedTech!broadly!defined!is!any!intervention!that!may!be!used!for!safe!and!effective!prevention,!diagnosis,! treatment!or!rehabilitation!of! illness!or!disease.5! ! InnAccel’s!focus! within! MedTech! is! primarily! devices,! procedures,! diagnostics,! delivery!systems,! services! and! possible! related! information! technology! applications! in!healthcare.!

The!actual!definition!of! a!medical!device!varies! from!country! to! country.! !Devices!can!be!an!instrument,!apparatus,!appliance,!software,!implant!or!other!article!used!to! diagnose,! treat! or! prevent! a! disease! or! other! conditions.! ! ISO! standards! for!medical!devices!are!covered!by!ICS!11.100.20!and!11.040.01.6,7!These!standards!are!the!basis!for!regulatory!compliance!in!local!markets!and!most!export!markets.!!The!global! medical! device! market! is! estimated! at! $US! 300! billion! in! 2011,! while! the!Indian!market!is!estimated!at!$3.5!billion!in!2012.8!

The! US! MedTech! incubator! development! has! historically! been! primarily! the! forDprofit,! investor! portfolio! model.! ! Examples! include! The! Foundry,! The! Innovation!Factory,!Coronis!Medical!Ventures!and!likely!scores!of!others,!many!of!which!have!not!been!identified,!as!most!forDprofit!incubators!typically!do!not!engage!with!NBIA.!!!

Since!the!late!1990s,!there!has!been!a!strong!trend!for!US!universities!to!collaborate!with!various!interest!groups!to!form!MedTech!incubators!outside!of!the!university!“umbrella.”!!The!savviest!US!universities!have!figured!out!that!they!are!too!much!of!a!bureaucracy!to!own,!or!operate!an!incubator.!!Incubators!operate!“at!the!speed!of!business,”! and! are! inherently! antiDbureaucratic.! ! So! universities! have! caused# the#formation!of!MedTech,!and!other!niche! technology! incubators,!but! remain!at!arms!length.! ! The! benefits! are! tangible,! such! as! development! of! incremental! revenue!streams,! attracting! incremental! research! funding! and! attracting! worldDclass!clinicians!and!researchers.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5!WHO:!Technology,!Health!6!International!Organization!for!Standardization!11.100.30!Biological!evaluation!of!medical!devices.!7!International!Organization!for!Standardization!11:040:!Medical!equipment.!8!www.zacks.com/stock/news/50398/MedicalDDevicesDIndustryDOutlookDAprilD2011!


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Incubators! can! actually! expand! the! capabilities! of! research! institutions.! ! The!Advanced!Technology!Development!Center!(ATDC)!has!helped!the!Georgia!Institute!of! Technology,! with! its! expertise! in! electrical! engineering,! to! acquire! biomedical!capabilities.!!It!combines!resources!with!the!Emory!University!School!of!Medicine!to!create!biomedical!startDups.!!The!two!universities!have!formed!a!joint!department!of!biomedical! engineering,! a! unique! collaboration! between! a! private! and! a! public!university.9.!!!

This! commercialization!phenomenon! is! not! as! fully!developed!within! academia! in!India,! yet! the! Indian! academic! institutions! are! acutely! aware! of! what! their!international! peers! are! doing! relative! to! commercialization.! ! This! “awakening”!bodes!well!for!TBI!development!in!India!over!the!next!decade.!

Commercializing! technology10! is! challenging! in! any! economy—developed! or!emerging.! ! Commercialization! becomes! even! more! challenging! when! the!technologies! are! MedTech! innovations,! impacted! by! regulatory! hurdles;! thereby!lengthening!time!to!market!and!increasing!the!capitalization!of!the!venture.!!For!the!past!two!decades,!best!practice!studies!focusing!on!growing!the!bioscience!(of!which!MedTech!is!a!subDset)!industry!have!identified!various!success!factors.!!

For!the!North!American!regions!with!the!largest!life!science!and!MedTech!industry!clusters,!no!one!region!ranks!at! the!top!of!all!success! factors.! !The!conclusion!that!can! be! drawn! is! that! what! a! region! does! to! enhance! its! positive! advantages! and!mitigate! any! weaknesses! is! more! important! to! its! ultimate! success,! than! how! it!ranks!on!any!one!success!factor.!!The!top!five!critical!success!factors!are:!

• Scientific:!Presence!of! IP!generators!(academic!and/or!research! institutions!and/or!hospitals!that!produce!IP!that!can!potentially!be!commercialized)!

• Industry:! Some! mix! of! nicheDspecific! large! companies! and! SMEs! (large!companies!train!talent!that!can!migrate!to!SMEs;!both!often!create!spinDout!startDup!entities)!

• Cultural:! Presence/history! of! an! entrepreneurial! culture! (increases!interactions!within!the!cluster;!builds!networking!platform)!

• Financial:!Availability!of!capital!(seed,!angel,!venture;!government!grants!and!foundations)!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9!The#New#Device#Incubators,!Windhover!Information,!Inc.!2007!10!Technology!commercialization!is!a!process!whereby!the!incubator!provides!various!services!to!bring!a!product!from!concept!to!market.!!These!services!typically!include!one!or!more!of!the!following:!market!identification,!product!refinement/positioning!to!address!market!needs,!linking!business!management/operations!capabilities!to!engineering/design!teams,!and!product!packaging!and!distribution.!!Unlike!technology!transfer,!which!focused!on!making!technology!available!to!potential!users,!technology!commercialization!is!proDactive!and!focuses!on!bringing!the!technology!to!market.!


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• Support:! Establishment! of! a! clusterDfocused! focal! point! (site/location)! i.e.,!incubator!

II.--PROJECT-OBJECTIVES-

InnAccel!is!interested!in!better!understanding!the!demand!within!India!for!specific!acceleration!services!and!support!for!the!MedTech!industry,!including!one!or!more!specialized!MedTech!incubation!facilities.! !InnAccel!is!also!interested!in!identifying!incremental! strategic! partners! (academic! and! research! institutions,! hospitals! and!potential!coDinvestors)!with!an!inherent!interest!in!the!MedTech!cluster!in!order!to!potentially! recruit! them! into! a! professional! MedTech! network.! ! These! strategic!partners!are!often!a!key!source!of!“dealDflow,”!as!wouldDbe!entrepreneurs!typically!seek! trusted! counsel! and! advice! prior! to! investing! capital! in! entrepreneurial!ventures.!

If! the! proposed! MedTech! incubator! is! in! fact! deemed! to! be! feasible,! then! SDS! is!engaged!to!subsequently!develop!a!Business#Plan,!which!would!include:!

• Marketing!plan!outline-• Facility!assessment,!needs,!and!development!considerations-• FiveDyear!financial!pro!forma-• Proposed!mission!and!vision!statements-• Operating!plan!to!include:-

o Tenant!applications!and!assessment!criteria-o Examples!of!lease!agreements-o Service!needs-o Proposed!staffing,!job!descriptions-o Evaluation!metrics-

At! the! commencement! of! this! investigation,! SDS! considered! the! feasibility! of!developing!a!network!of!MedTech!incubators!throughout!major!population!centers!in!India,!primarily!Bangalore,!Chennai,!Mumbai!and!New!Delhi.!!As!information!was!developed,! both! InnAccel! and! SDS! concluded! that! the!most! appropriate! course! of!action!would!be! to! initially!develop!one!MedTech! incubator!as!a! “pilot!project”! to!validate!the!model,!which!if!successful,!could!be!replicated!throughout!other!major!cities!with!the!required!resources.! !Further!investigation!led!to!the!conclusion!that!the!optimum!initial!location!would!be!Bangalore,!due!to!numerous!factors!discussed!later!in!this!report.!

It! should! be! noted! that! a! feasibility! study,! no! matter! how! well! done,! does! not!guarantee!the!success!of!an!incubator.!!Rather,!the!feasibility!study!serves!to!identify!obstacles! and! opportunities! in! order! to! mitigate! risk! if! a! decision! is! made! to! go!


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forward.! ! The! goal! is! to! create! new,! innovationDdriven! MedTech! companies!providing! affordable! solutions! to! both! emerging! and!developed! economies! and! to!create!incremental!wealth!with!a!positive!financial!impact!on!the!investors.!!

III.--METHODOLOGY-

SDS! utilized! both! primary! and! secondary! sources! of! information! to! complete! this!analysis.!!

A.#Secondary#Market#Research#

Secondary!market!research!was!gleaned!from!the!internet!and!other!public!sources!of!data!as!well!as!other!reports!and!data!provided!by!InnAccel!and!its!partners.!!Key!secondary!resources!include:!

• NBIA!(www.nbia.org)!• US/SBA!(www.sba.gov)!• International!Economic!Development!Council!(www.iedc.org)!• The!India!Startup!Report!(www.worldstatupreport.com/India)!• The#Economic#times!(www.economictimes.indiatimes.com)!• NSTEDB!data!(www.nstedb.com)!• Society!for!Innovation!and!Entrepreneurship!(Mumbai)!• Reuters!• IIM!Bangalore!

B.#Primary#Market#Research#

1.-OneEonEOne,-InEDepth-Interviews-

InDdepth!interviews!conducted!during!the!course!of!this!feasibility!analysis!focused!on! metropolitan! areas! throughout! India! with! significant! technology! cluster!development,! such! as! Bangalore,! Chennai,! Mumbai! and! New! Delhi,! as! well! as! in!areas! such! as! Gujarat,! West! Bengal,! Tamil! Nadu! and! Kerala,! where! there! is! less!MedTech!cluster!development.!

The!project! team!conducted!thirtyDfive! inDdepth! interviews!between!October!2012!and! April! 2013.! Interviewees! included! representatives! of! the! private! sector,!government! entities,! the! commercialization! infrastructure,! and! both! faculty! and!administration! at! research! institutions.! ! Appendix! 1! provides! a! summary! of!stakeholders!interviewed!by!type!of!stakeholder.!!Note,!that!nearly!half!of!the!formal!interviews! conducted! were! with! established! or! startDup! MedTech! principals.!


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Appendix! 2! includes! a! list! of! all! persons! interviewed! and! the! organization! each!represented.!

Each! interview!was!documented! throughout! the! investigative!process.! ! Interviews!were! conducted!using! a! questionnaire! relevant! to! the! type! of! stakeholder.! ! These!questionnaires!can!be!found!in!Appendix!5.!!

2.-Focus-Group-Survey-

Fifteen!individuals!completed11!a!focus!group!survey.!!Appendix!3!is!a!reproduction!of! the! focus!group!survey.! !A! summary!of! the! focus!group! results! can!be! found! in!Appendix!4.!

IV.-FINDINGS--

A.#Respondent#Profile#

All! interviews! conducted! were! with! stakeholders! in! the! development! of! the!MedTech! sector! in! India.! !By!design,! they!were!diverse! as! to!both! industry! sector!and!geography.!!Six!categories!of!sectors!are!delineated!in!Appendix!1.!Twelve!earlyDstage!MedTech!principals!were!interviewed;!and!these!types!of!firms!represent!the!primary!source!of!demand!for!acceleration!services!in!the!future.!

Geographical-Diversity:-

Location# Interviews#Ahmedabad! 1!Bangalore! 11!Chennai! 4!Gandhinagar! 1!Kolkata! 1!Kollam! 1!Mumbai! 4!New!Delhi! 11!

Obviously,! most! MedTech! activity! is! occurring! in! the! larger! population! centers,!where!generators!of!intellectual!property!are!located.!

Summary!data!from!the!interviews!is! found!in!the!section!on!Market!Demand!that!follows.!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11!Not!all!respondents!to!focus!group!survey!answered!every!question!


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B.#MedTech#Start;up#Ecosystem#

Our! findings,! based! on! both! the! primary! and! secondary! market! research,! on! the!development!of!the!MedTech!startDup!ecosystem!today,!are!encouraging.!Responses!to! relevant! questions! about! the! ecosystem! today,! from! the! oneDonDone! interviews!include:!

1.!Question:!Do!you!know!of!any!MedTech!startDups!that!have!emerged!in!the!last!three!years?!

• Just!the!MedTech!startDup!respondents!alone!cited!twentyDtwo!recent!MedTech! startDup! companies! of! which! they! are! aware.! ! There! was!unanimity! amongst! this! group! that! there! is! a! strong! need! for! a!MedTechDspecific! incubator,! and! that! such! a! venture! will! in! and! of!itself!create!incremental!entrepreneurial!MedTech!demand.!

! 2.!Question:!What!are!the!key!barriers!to!success!for!MedTech!startDups?!

• Interviewees!concluded!that!the!key!barriers!to!success!are:!

! ! a.!Lack!of!MedTechDfocused!incubation!

! ! b.!Lack!of!affordable!lab!space!and!prototype!development!

! ! c.!Lack!of!access!to!capital!

! ! d.!Lack!of!MedTech!domain!expertise!

! !e.! Lack! of! (a! developed)! MedTech! cluster,! although! nascent! and!growing!

3.!Question:!What!are!the!top!needs/gaps! for!current!startDups!that!are!not!being!met?!

Need#Identified# Number#Responding#Access!to!clinical!and!technical!resources! 11!Access!to!capital! 9!Product!engineering,!development!and!regulatory!expertise!

6!

Access!to!laboratories!and!equipment! 4!Commercialization!support! 4!Mentors!and!management!support! 4!Business!support!services! 4!


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4.! Question:! what! is! your! view! on! the! Series! A/B! funding! ecosystem! for!MedTech!startDups!(first!institutional!round)?!!When!do!they!typically!invest!(at!what!stage);!size!of!investment!and!equity!stake!taken;!does!the!investor!buy! out! the! angel! or! seedDstage! investors! or! do! they! simply! have! their!original!investment!diluted?!

• Responses! varied! from! “venture! capital! funding! is! nonexistent,”! to!“venture! funding! is! flowing! and! money! is! available.”! ! Our!interpretation! is! that! the! more! sophisticated! entrepreneurs! get! the!funding!and!are!generally!optimistic!(and!the!converse!is!also!valid).!The! majority! of! respondents! indicated! that! venture! funding! is!improving!and!generally!available!for!the!best/most!legitimate!IP.!

• There!are!indicators!that!MedTech!is!gaining!favor!with!venture!funds!due!to!higher!ROI’s!than!in!ICT.!

• Regarding!dilutions!or!buyDouts,!most!respondents!indicated!it!would!be!on!a! caseDbyDcase!basis! –!no!evident! trend!one!way!or! the!other,!although! one! respondent! indicated! that! “angels! prefer! convertible!notes!or!debt!that!can!convert!to!preferred!shares.”!

• Timing:!Most! agree! that! the!minimum! requirement! is! valid! proof! of!concept.!

• Range:! Typical! angel! investments! run! from!$100D$500,000;! series!A!rounds!are!roughly!$1!million!to!$5!million.!!

5.!Interviewees!as!well!as!focus!group!participants!were!asked!to!identify!the!“missing! ingredients”! to! MedTech! startDup! success.! This! question! is!purposely!similar!to!both!questions!2!and!3!above.! !That!respondents!again!gave! similar! answers! to! both! 2! and! 3! above! reinforces! the! validity! of! the!information!gathered.!

C.#Market#Demand#

Bioscience,! in!its!broadest!sense,! includes!disciplines!that!focus!on!plants,!animals,!and! humans.! ! It! includes! therapeutics,! diagnostics,! biologics,! medical! devices,!reagents,! instrumentation,! veterinary! science,! and! agbio.! ! StartDup! companies! in!these!fields!can!be!based!on!technology!emerging!from!a!variety!of!institutional!or!corporate! sources.! ! Appendix! 6! illustrates! these! possible! sources.! ! DealDflow,! or!market!demand! in!various! technology! industries! is! typically! thought!of! as! coming!primarily! from! academia! and! research! institutions.! ! Although! these! may! be! the!primary! initial! sources! of! dealDflow! for! an! incubator,! experience! shows! that! over!time,! numerous! other! sources! can! and! will! feed! into! market! demand.! ! These!incremental!sources!of!market!demand!include:!


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• Angel!and!venture!capital!entities!• Hospitals!• Community!entrepreneurs!• Corporations:!corporate!spinDouts,!former!employees!• Independent!research!institutions!• StartDup! companies! attracted! to! the! region! (either! in! search! of! funding,! or!

because!of!a!key!researcher!in!the!region).!

The! importance! of! any! one! source! varies! by! the! type! of! technologies! being!developed.!!Not!all!sources!are!present!in!every!region.!!!

Our! investigation! found! an! emerging! MedTech! cluster! in! several! parts! of! India,!specifically! the! large! population! centers! of! Bangalore,! Chennai,!Mumbai! and!New!Delhi.!An!industry!cluster!is!defined!as:!“A!geographic!concentration!of!businesses,!suppliers!and!associated!institutions!in!a!particular!field”.! !Clusters!are!recognized!as!facilitating!increased!productivity!with!which!companies!can!compete!nationally!and!globally.12!!Obviously,!MedTech!is!being!developed!in!other!parts!of!the!country,!but!not! to! the!extent! that!an!emerging!cluster!can!be!discerned.! ! Industry!clusters!develop!in!stages:!emerging,!developing!and!mature.!!

Virtually!every!one!of!the!interviewees!and!focus!group!participants!had!a!favorable!reaction!to!the!InnAccel!concept.!!It!is!evident!from!the!interview!respondents!that!each! sector! investigated,! believes! that! the! concept! is! valid! and! will! serve! as! a!catalyst! for! more! MedTech! entrepreneurship.! ! Based! on! all! of! the! information!developed! in! the! course! of! this! analysis,! SDS! is! confident! that! there! is! not! only!adequate!demand! for!MedTechDspecific! incubation!now,!but! incremental!MedTech!entrepreneurship!(and!demand)!will!grow!once!an!incubator!is!up!and!running.!

Specific! information!regarding!market!demand!uncovered!by!sector!interviewed!is!summarized!as!follows:!

1.-Academic-Institutions-

The! “commercialization”! of! academic! research! in! the! US! was! a! difficult! culture!change.!!Historically,!academia!existed!for!the!purpose!of!educating,!and!conducting!basic!research!for!the!benefit!of!humanity.!This!began!to!change!post!WW!II,!but!did!not!become!“mainstream”!until!the!late!1990’s.!!By!2002,!the!US!National!Institute!of!Health!(NIH)!articulated!a!vision!for!a!more!productive!system!of!medical!research!with! a! greater! impact! on! health! care.! ! Today,! US! government! funding! agencies!virtually!demand!a!commercial!value!from!funded!research.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!12!Porter,!Michael!Location!and!Economic!Development,!Economic#Development#Quarterly!vol!14,!no!!1,!pp!15D34;!2000!


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!

Academic! research! institutions! can! have! a! positive! impact! on! developing! a!technology!culture!within!a!region.!!Today,!most!US!academic!institutions,!research!or! otherwise,! embrace! the! concept! of! economic! development,! and! in! turn,!entrepreneurship.! ! These! academic! institutions! now! have! entrepreneurship!programs,! encourage! faculty! to! commercialize,! proDactively! integrate! with! the!private!sector,!and!successfully!balance!their!basic!research!with!commercialization.!

This!commercialization!phenomenon!in!academia!has!begun!to!take!hold!in!India,!as!indigenous! academic! research! institutions! observe! their! international! peers!changing! their! approaches! to! the! development! and! commercialization! of! their! IP.!!That! their! peer! institutions! also! have! developed! multiDmillion! dollar! revenue!streams! from! the! commercialization! of! their! intellectual! property! does! not! go!unnoticed.!

Academia!in!India!is!having!a!positive!impact!on!developing!incremental!demand!for!MedTech!commercialization.!!A!few!examples!include:!

• IIT! Mumbai! has! created! a! healthcare! research! consortium! in! partnership!with! Tata! Memorial! Hospital,! Hinduja! Hospital,! KEM! Hospital,! Span!Diagnostics,! Strand! Life! Science! and! others,! with! the! objective! of!strengthening! interDdisciplinary! research,! translating! technology! into!products!and!promoting!entrepreneurship.!

• StanfordDIndia! Biodesign! in! New! Delhi! is! a! partnership! between! Stanford!University,! IITDDelhi!and!the!All! India! Institute!of!Medical!Sciences!(AIIMS),!with!a!goal!of!training!the!next!generation!of!MedTech!innovators.!

• HTIC/IITM! is!evolving!a! structured!way!of! training! innovators! in!MedTech.!!This!serves!as!a!catalyst! to!promote! the!MedTech!ecosystem!by!connecting!information! and! relationships! within! their! innovation! ecosystem.! It! has!multiple! departments! that! focus! on! biomedical! engineering! and! MedTech,!and!facilitates!taking!basic!research!to!prototyping.!

• Amrita! School! of!Biotechnology!has! a! primary! focus# on# low=cost# biomedical#devices# to# provide# affordable# healthcare.! It! has! developed! a! continuous!infusion! insulin! pump! and! a! novel! glucose! sensor,! and! is! working! on!productizing! these! technologies.! Also! has! a! nano! biomedical! technology!initiative! with! focus! on! drug! delivery! systems;! supports! faculty! with!entrepreneurial!aspirations.!

All!academics! interviewed!expressed!strong!support! for! the! InnAccel!concept,!and!most!believe!that!it!will!serve!as!a!catalyst!for!MedTechDspecific!entrepreneurship.!

Saurebh Siyal


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!

Abstract!quotes!from!interviews:!

“Having#an# InnAccel,# from#a#demand#perspective#will# convert#a# ‘few’# to#a# ‘queue’! (of!startDups).”#

“Hands=off# incubation#has#not#been#a#spectacular#success,#hands=on# incubation#(as# is#the#InnAccel#model)#will#be#a#stellar#success.”#

“InnAccel#has#a#core#team#that#will#lend#confidence#to#would=be#entrepreneurs.”#

“A# MedTech# incubator# is# a# great# idea,# and# long# overdue.# # It# will# definitely# create#increased#innovation.”#

“Such# an# incubator#would# be# a# definite# benefit,# as# it#will# spur#more# innovation# and#entrepreneurship.”#

Conclusion:#All!(100%)!of!academicians!interviewed!are!supportive!of!the!InnAccel!concept,!and!some!have!offered!to!partner!with!InnAccel!in!various!ways!including!strategic! research!partnerships.! !Academia! in! India! is! taking! concrete! steps! in! the!promotion!of!commercialization!of!internally!generated!intellectual!property.!

2.-Clinicians-

Interviews!with!clinicians!yielded! the! least!amount!of!helpful! information,!despite!their! unanimity! that! InnAccel! is! a! great! idea! and! sorely! needed.! ! Clinicians! are!understandably!tightly!focused!on!their!clinical!practices.!Entrepreneurship!and!the!culture!of!commercialization!within!the!hospital!centers!are!not!nearly!as!developed!as!within! the!academic! institutions.!There! is! little! to!no!research!conducted!at! the!hospitals! contacted:! Fortis,!Manipal,!Medall,! St.! John’s! (Bangalore)! and!Aravind! in!Tamil!Nadu.!

Selected!quotes!from!interviews!with!clinicians:!

“I’m# very# positive# about# the# concept# and# this# will# be# a# big# benefit# to# potential#entrepreneurs.”#

#“Since#most#of#our#(medical)#equipment# is# imported,#there# is#a#need#for#alternatives.##Multi=national#corporations#are#not#focusing#on#affordable#products,#so#there#is#a#gap#to#be#filled#in#India.”#


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“I# believe# there# is# a# lot# of# potential# for# start=ups# in# Bangalore.# # Some# elements# of#Bangalore’s# ecosystem# are# strong,# like# mentoring# from# NSRCEL,# and# e=Health# TBI.##There#is#a#lot#of#entrepreneurial#potential#amongst#post=graduate#students.”#

“Doctors#at#St.#John’s,#once#they#find#out#about#a#MedTech#incubator#to#support#them,#will#jump#into#innovation.##Demand#will#be#very#high.”#

“There#are#huge#MedTech#opportunities#here:#the#volume#of#India’s#requirements,#and#our#current#dependency#on#imports#will#lead#to#locally#developed#innovations.”#

Conclusion:!

All! (100%)of! the! clinicians! interviewed! responded!positively! regarding! InnAccel’s!concept!of!a!MedTech!incubator:!they!understand!the!need,!not!only!for!developing!a! focal! point! for! MedTech,! developing! the! ecosystem,! and! providing! access! to!capital,!but!also! for! the!development!of!affordable!MedTech!products! in! India!and!other! emerging! economies.! ! From! the! clinician’s! perspective,! all! MedTech!development!will!ultimately!have!a!positive!impact!on!their!practices,!from!multiple!perspectives.! The! sole! concern! expressed! by! a! few! clinicians! interviewed! is! that!InnAccel!would! benefit! from! having! a! clinician! either! as! part! of! the!management!team,!or!on!contract!to!InnAccel.!

3.-Government-Agencies-

Individuals!interviewed!at!government!agencies!generally!operate!above!the!dayDtoDday!detail!areas,!and!most!could!not!address!many!specifics!of!market!demand!for!MedTech,!but!most!had!opinions!relative!to!demand.!!One!interviewee!was!familiar!with!a!few!startDups!in!nonDinvasive!diagnostics,!but!was!not!aware!of!any!involved!with!implants!or!therapeutic!devices.!!!

A!few!selected!quotes!from!interviewees!include:!

“Once#an#engineer#or#scientist#learns#that#there#is#this#ecosystem#he#will#be#motivated#to#do#a#start=up.##Today,#he#has#to#run#around#like#a#street#dog#to#access#resources.”#

“MedTech#in#India#today#is#a#‘highly#promising#field,’#and#there#has#been#a#remarkable#change# in# the# last# few# years…there# are# a# lot# of# bright# people# who# would# work# on#innovative#ideas#in#MedTech#given#the#right#opportunities,#which#are#limited#today.”#

“Medical#technology#does#not#meet#the#healthcare#needs#of#the#(Indian)#people#because#the#devices#are#not#cost=effective.”#

“I#believe#the#InnAccel#concept#will#spur#innovation#and#entrepreneurship#100%.”#


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’I# know# of# several# incubators,# but# they# are# all# general# purpose# (mixed=use),# with# a#couple# biotech=focused.# # I# cannot# think# of# any# that# understand# MedTech,# and# as# a#result,#there#is#a#huge#gap#to#be#filled#in#MedTech#incubation.”#

“The#MedTech#environment#today#lacks#fabrication,#testing#and#engineering#facilities#–#all# the# things# you# say# InnAccel#will# provide.# # These# are# sorely# needed,# as# is# domain#expertise#and#clinical#environment#linkages.”#

“We# (DBT# funded# research# institute)# would# definitely# consider# partnering# with#InnAccel#on#funding#for#start=ups,#and#possibly#even#support#for#incubator#start=up#and#operations.”#

“InnAccel# should# explore# a# partnership# with# the# government:# a# national,# or# state=based# partnership.# # National# could# help# with# funding# and# regulatory# aspects,# while#state=based#would#help#access#academic#and#research#institutions.”#

“There#is#a#critical#need#for#affordable#devices#–#especially#in#diagnostics#=#that#can#be#purchased#at#lower#costs.”#

Conclusion:#!

100%! of! the! government! agency! interviewees! were! supportive! of! the! InnAccel!MedTech! incubator! concept,! and! several! indicated! a! strong! possibility! of! tangible!support,!either!in!the!form!of!funding,!access,!strategic!partnering!and/or!regulatory!hurdles.!!All!affirm!the!demand!for!affordable!devices.!

4.-Investors-

Interviews!with!investors!determined!that!they!find!MedTech!attractive!because!of!the! size! of! the! multiple! opportunities! and! size! of! markets,! especially! in! India.!!Investors! lack! experience! in! funding! MedTech,! so! increasing! private! sector!investment!will! be! an! incremental! process.! ! Investors! do! like! the! InnAccel!model,!primarily!because!InnAccel!tenant!companies!will!be!preDscreened,!therefore!having!a!higher!probability!of!success!in!a!relatively!higherDrisk!sector.!Series!A/B!investors!have! a! higher! propensity! to! place! followDon! funding!with! screened/validated! and!seedDfunded!firms.!They!also!report#an#“observable#shift”#from!Western!products!to!developing!our!own!(Indian)!solutions.!

Investors!also!reacted!favorably!to!the!InnAccel!concept:!

“This# will# provide# a# proprietary# product# engineering# and# development# platform# for#start=ups,# and# I’m# all# for# it.# This# kind# of# support# structure# is# what# is# missing# in#MedTech.”#


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“What# seems# to# be# unique# about# the# InnAccel# model# is# simply# its# specificity# –# that#alone#will#differentiate#it,#but#to#have#an#investment#fund#also#–#this#will#be#a#signal#to#investors#that#the#client#firms#have#been#validated.”#

“Businesses# are# emerging# to# address# local# needs#which#was# not# seen# five# years# ago.##But,#a#lot#more#needs#to#be#developed,#and#InnAccel#can#help#facilitate#that#growth.”#

“I’ve#seen#more#MedTech#entrepreneurial#activity#in#the#last#year#than#in#the#previous#four#years.”#

Investors!see!a!MedTech!incubator!as!a!keyDdifferentiating!factor!for!success.!!They!believe! it!will! catalyze! potential! entrepreneurs! to! “take! the! plunge”! to! start!more!new!enterprises.!

“There#is#no#organized#effort#to#accelerate#MedTech#start=ups#in#India#–#InnAccel#will#give# hope# to# many# with# entrepreneurial# aspirations,# but# have# not# acted# on# those#aspirations# due# to# lacking# key# elements# of# success# that# InnAccel# can# provide# –#primarily#access#to#capital,#but#also#product#development#and#marketing.”#

Conclusion:#

100%! of! investors! interviewed! see! InnAccel! as! filling! a! needed! gap! in! the!entrepreneurial!ecosystem.! !As!a!group!they!validate!market!demand!for!MedTech!incubation!space!and!services,!and!will!ultimately!serve!as!a!source!of!incremental!dealDflow!for!InnAccel.!

5.-MedTech-Companies-E-Large-

Large! MedTech! companies! have! historically! had! a! sporadic! association! with!MedTech!startDups.!!In!general,!the!large!companies!believe!InnAccel!is!a!good!idea,!and!would!act! in! some!ways!as!an! innovation!pipeline! for! large!company!product!line! expansion/acquisition.! ! Large! companies! benefit! from! mitigation! of! risk!through!acquisition!of!proven!technologies.!!The!presence!of!global!industry!players!in!a!region! is!a!critical!success! factor,!as!they!(inadvertently)!train!employees!that!ultimately!leave!to!start!their!own!entrepreneurial!ventures,!or!leave!and!go!to!work!for!local!SME’s.!

“Conditions# for# device# start=ups# is# becoming# more# conducive,# and# with# a# MedTech=focused# incubator,# more# entrepreneurs# will# actually# move# forward# with# plans# to#commercialize.”##


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“Too# often,# start=ups# waste# a# lot# of# time,#money# and# energy# trying# to# solve#myriad#issues# on# their# own.# # Having# a# program# like# InnAccel# would# be# very# cost# and# time#effective.”#

“There# is# a# huge# potential# in# MedTech# innovation# and# we# are# investigating# US#universities,#trying#to#figure#out#the#best#model.”#

Many!perform!inDhouse!research!and!development,!but!there!is!no!internal!support!for!entrepreneurs.!!This!could!possibly!recreate!the!phenomenon!in!more!developed!MedTech! economies,!where! employees! of! large! firms! leave,! or! “spinDout”! on! their!own!to!start!an!entrepreneurial!venture.!!Some!would!want!to!partner!with!InnAccel!to!enhance!their!product!development!pipeline.!

One!firm,!Phoenix!Medical!Systems!(Chennai)!began!as!a!startDup!in!1989,!as!a!result!of! a! project! out! of! IITDChennai.! ! Today,! Phoenix! has! revenues! in! excess! of! Rs.! 50!crores! per! year.! ! Periodically,! Phoenix! provides! some! commercialization! and!product!design/development!services! to!sporadic!startDups,!but! there! is!no! formal!program!or!consistency.!

Conclusion:#

Large! MedTech! companies! are! supportive! of! the! InnAccel! proposed! MedTech!incubator,! and! validate! that! there! is! demand! for! MedTech! incubation! space! and!services.! It! is! unlikely! that! these! firms!will! initially!have! significant! impact!on! the!model.! ! Over! time! though,! as! the! InnAccel! incubator! becomes! successful! and!“graduates”! profitable! MedTech! ventures,! large! MedTech! will! become! more!interested! in! the! incubator! as! a!potential! source!of! acquired!new! technologies.! !A!secondary! impact! is! that! a! successful! MedTech! incubator! will! provide! added!incentive! for! large! company! employees! to! leave! the! large! company! to! start! an!entrepreneurial!MedTech!venture.!

6.-MedTech-Companies-StartEup-

The!eleven!startDups! interviewed!cited! firstDhand!knowledge!of! twentyDtwo!recent!MedTech!startDup!companies:!

• Acadia!Biomedical!Systems!• Achira!Labs!• Axio!Biosolutions!!• Biosense!• Consure!!• Diabeto!

• Embrace!• Forus!• HD!Medical!Systems!• Jana!• Medived!• Medsphere!

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• Med!Synaptics!• Neobreathe!• Nethra!• Perfint!• Phoenix!Medical!

• Remido!• Skanray!!• Sohum!Innovation!Labs!• Technocratz!• Yethi

These! eleven! startDups,! perhaps! more! vehemently! than! any! other! group!interviewed,! unanimously! expressed! support/need! for! the! concept.! All! indicated!that! having! a! MedTechDspecific! incubator! such! as! InnAccel! proposes! would! be! a!great!asset,!is!sorely!needed,!and!will!lead!to!incremental!entrepreneurial!MedTech!development.!

Several! indicated!that!although!fragments!of!a!MedTech!ecosystem!exist,!no!one!is!focusing!on!development!of!a!MedTech!ecosystem,!thus!a!tremendous!opportunity!exists,!primarily!in!bringing!together!technologists!with!domain!experts!(InnAccel).!!Several! complained! that! existing! incubation! programs! are! primarily!landlord/tenant! relationships,!with! no! program!or! services.! ! This! does! not! fit! the!definition!of! an! incubator,! and! suggests! the! incubator! label! is!being!misapplied!at!numerous!institutions!throughout!the!country.!

Several!startDups!concurred!that!space!is!simply!a!commodity;!what!is!needed!is:!

• Access!to!capital!• Availability!of!affordable!(small!increments)!of!laboratory!space!• Prototype! design/development/engineering! (including! infrastructure! and!

access!to!specialized!equipment)!• Technical!support!• Regulatory!assistance!• Export!assistance!• PreDscreened! professional! service! providers! (law,! accounting,! IP! –! these!

services!are!sporadically!offered,!but!not!MedTechDspecific)!• Marketing!assistance,!marketing!strategies;!distribution!• Experienced!mentors!and!advisors!!• Access!to!research!institutions!• Development!of!a!MedTech!network!

“Based# on# what# you# describe,# InnAccel# will# meet# the# existing# gaps# in# the# MedTech#innovation#ecosystem.”#

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“Simply#having#an#exclusive#MedTech#focus#is#all# it#will#take#to#differentiate#InnAccel#adequately#–#there#are#so#very#many#unrealized#opportunities.”#

“This# will# provide# the# needed# support# to# give# entrepreneurs# the# nerve# to# take# the#initial#step.”#

“This# is# good# for# the# ecosystem,# entrepreneurs# and# for# India# –# it# will# surely# spur#innovation.”#

“InnAccel#will#induce#an#avalanche=type#effect#and#deal=flow#will#continue#to#increase#over#time.”##

“InnAccel# would# be# a# great# bridge# to# different# specialists,# and# helping# us# get#networked#with#them.”#

“InnAccel#will#spur#more#MedTech#innovation.”#

“The# current# incubators# do# not# provide#MedTech# specific# assistance,# therefore# little#value.# # It# is# a# huge# gap.# # If# InnAccel# provides# an# industry=specific# program,# then# it#should#be#able#to#be#very#selective#about#which#companies#are#admitted.”##

“One#of#the#main#roadblocks#for#MedTech#entrepreneurs#is#simply#access#to!(affordable!amounts!of)#laboratories.”#

“InnAccel#will#provide#a#focal#point#for#the#industry#and#for#funding,#and#should#attract#follow=on#funding#opportunities.”#

“It#would# be# a# definite# benefit# and#will# spur#more# innovation# and# entrepreneurship.#The# main# constraint# facing# MedTech# entrepreneurs# today# is# execution.# # If# InnAccel#provides# experienced# mentoring# and# industry=specific# assistance,# many# more#companies#will#succeed.#Great#concept.”#

85%! of! the! MedTech! startDup! respondents! indicated! a! conceptual! willingness! to!exchange!equity! for! funding.! !Some!specifics!were!discussed,!but!realistically,!each!equity! exchange! will! be! a! separate! negotiation! based! on! variable! tangibles! and!intangibles.!

In! general,! the! MedTech! startDups! were! positive! on! funding.! ! Many! reported!everything!from!obtaining!DST!Grants,!to!private!angel!investing!up!to!some!Series!A!and!B!funding!from!VCs.!!


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For! MedTech! startDups,! there! is! no! one! single! primary! source! of! IP! generation.!Although!most! IP!generation! is!within!academia!and!governmentDrelated!research!institutions,!other!sources!include!spinDoffs!from!larger,!established!MedTech!firms,!other! firms! within! the! bioscience! industry! and! former! employees! of! MedTech!companies!that!have!been!laid!off!or!resigned.!

Conclusion:#

Existing! MedTech! startDups! are! unanimously! in! favor! of! development! of! the!InnAccel!incubator!concept,!and!validate!that!there!is!more!than!adequate!demand!for! it.!They!all! correctly!believe! that! they!will!benefit! from!development!of!both!a!MedTech!cluster!and!a!more!developed!MedTech!network!(both!on!a!regional!and!national!basis).!

7.-Market-Demand-–-Conclusion:----

Our! investigation! finds! pentDup! demand! for!MedTechDspecific! incubation! services.!!The!demand!for!MedTech!development!and!commercialization!services!and!support!will! come! from! multiple! sources,! rather! than! one! dominant! source.! Initially,!academic!and!research! institutions!will! likely!be! the!primary!sources!of!deal! flow;!demand! will! also! come! from! professional! service! providers,! and! investors.!!However,!as!history!shows!in!other!incubation!environments—demand!grows!over!time,!once!an!incubator!becomes!better!known!and!networked!into!the!fabric!of!the!MedTech! community.! ! ! Overall,! India! has! pentDup! demand! for! MedTechDspecific!incubation,! and! this! demand! is! centered! in! major! population! centers.! ! SDS!particularly! likes! the! concept! of! beginning! in! Bangalore! due! to! the! established!entrepreneurial!culture,!networks!and!other!infrastructure!indigenous!to!ICT.!

D.#Key#Services##

During!the!interview!and!focus!group!investigative!process,!key!service!needs!were!mentioned!in!multiple!ways.!!As!a!result,!the!following!key!needs!were!identified!in!terms! of! what! services! InnAccel! should! provide,! along! with! the! number! of!respondents!mentioning!each!service:!

Strictly Private & Confidential Strategic Development Services 781 Northwest boulevard, Suite 202

Columbus, Ohio 43212 www.sdsecdev.com

!

What#InnAccel#Should#Provide# ##of#Respondents#Clinical,!Academic!and!Technology!Partner!Networks! 14!Physical!Laboratory!Infrastructure!and!Prototyping!Facilities!

10!

Collaborative!Working!Environment!for!Clinicians!and!Entrepreneurs!

9!

Access!to!Capital! 9!Product!Design,!Development!and!Regulatory!Support! 6!Commercialization!Support! 6!Mentoring!and!Strategic!Support! 6!

InnAccel!proposes!to!provide!all!of!the!above!services!and!support,!either!internally!or! outsourced.! ! Although! InnAccel! cannot! singleDhandedly! develop! the! nascent!MedTech!cluster,!it!can!act!as!a!catalyst!for!more!rapid!development!of!the!cluster!in!both!the!near!and!longDterm.!

In! the! focus! group! interviews,! attendees! were! asked! what! types! of! business!assistance!did!you!need,!do!you!need,!or!do!you!expect! to!need?! !They!were! then!asked!to!indicate!the!level!of!importance!with!5!being!very!important,!1!being!least!important.!!(Responses!are!ranked!in!order!of!perceived!value:! !

! ! !

These! responses! from! both! the! interviews! and! the! focus! group! surveys! are!consistent! with! similar! surveys! throughout! the! globe,! and! give! InnAccel! a! clear!

Saurebh Siyal


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roadmap! on!what! services! it! needs! to! provide! in! order! to!meet! the! needs! of! the!MedTech!entrepreneurial!communities.!

E.#Barriers##

During! interviews! with! MedTech! entrepreneurs,! clinicians! and! faculty! members!who! either! have! started! a! company! or! are! considering! starting! a! company,! there!was!universal!agreement!that!the!greatest!barriers!to!increased!commercialization!of!MedTech!within!India!is!the!following!(note!some!overlap!with!key!services):!

1. Lack!of!MedTechDspecific/focused!incubation!2. Lack!of!affordable!lab!space!and!prototype!development!3. Lack!of!access!to!capital!4. Lack!of!MedTech!domain!expertise!!5. Lack!of!(a!developed)!MedTech!cluster,!although!nascent!and!growing!

1.-Lack-of-MedTechEFocused-Incubation-

As!there!is!no!MedTechDfocused!incubator!in!all!of!India,!an!obvious!gap!exists!that!the! InnAccel! model! can! fill.! ! As! the! only! MedTechDfocused! incubator! in! India,!InnAccel!will!have!to!have!a!strong!marketing!program!to!generate!awareness!not!only! in! Bangalore,! but! also! throughout! India.! ! Fortunately,! this! can! be! done!relatively! inexpensively! through! select! academic! and! research! institutions,! trade!associations!and!established,!large!MedTech!companies.!!

2.-Lack-of-Affordable-Lab-Space-and-Prototype-Development----

For!MedTech!innovations!to!leave!the!institutional!setting,!startDups!must!be!able!to!find!affordable!and!appropriate!space!within!the!community.!!InnAccel!proposes!to!develop!an!incubator!of!15,000D20,000!square!feet.!!Affordable!does!not!necessarily!mean!inexpensive,!but!rather!the!ability!to!rent!space!in!small!increments,!that!can!be!leased!for!short!time!periods!at!reasonable!prices.!!-

During! its! interviews,! SDS! investigated! the! possibility! of! obtaining! lab! space! that!could!be! rented! from!established! corporations,! hospitals,! or! academic! institutions!with!excess! lab!capacity.! !Our! interviews!found!that!none!of! the!entities!contacted!either!had!excess!space!available,!or!would!consider!making!such!space!available.!!In!the!case!of!most!of!the!hospitals,!the!thought!was!readily!dismissed!as!not!fitting!in!with!their!mission!or!culture.!


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Prototype! development! is! another! hurdle! inhibiting! the! growth! of! the! emerging!MedTech!Cluster!in!all!of!the!major!population!centers.!!Having!a!machine!shop!and!some!prototype!development!experience!at!an!incubator!would!be!another!positive!step!in!moving!the!MedTech!cluster!from!the!development!stage!towards!maturity!

Conclusion:! ! Lack! of! affordable! and! appropriate! space! for! startDup! MedTech!companies!is!a!significant!gap!preventing!their!growth!and!success.!Development!of!the! emerging! MedTech! cluster! will! be! enhanced! by! having! a! MedTechDspecific!incubator.!

3.-Lack-of-Access-to-Capital----

Access!to!capital!is!the!single!most!important!resource!for!any!startDup!company.!!In!most!regions!in!North!America,!startDup!companies!claim!there!is!not!enough!capital!in!their!region.!!On!the!other!hand,!venture!capital!firms!state!that!they!will!invest!in!a! good! deal,! no! matter! where! the! company! is! located.! ! Reality! is! somewhere! in!between.!Overall,!SDS!is!impressed!with!the!relative!availability!of!various!sources!of!capital!as!reported!by!both!interviewees!and!focus!group!participants.!The!issue!is!finding!the!venture!firm!with!investment!parameters!that!fit!a!particular!startDup!company.!

• While! India! and! the!Bangalore! region!have! some!venture! capital! firms!and!organized! angel! investor! networks,! the! technology! focus! has! historically!been! on! ICT! and! software! based! companies.! ! However,! our! investigation!found!ample!evidence!of!seed,!angel!and!venture!investment!in!the!MedTech!sector.! ! The! Indian! Government! has! also! provided! multiple! investment!streams! for! entrepreneurial! ventures! that! can! be! accessed.! ! Although! the!capitalization! amount! and! gestation! period! for!MedTech! is!more! than! that!required! in! ICT! (typically! $3D5MM!and! 3D5! years! to! get! a! product! certified!and!launched),! it!pales!by!comparison!to!most!life!science!companies!at!the!startDup!stage!that!have!a!commercialization!pathway!that!require!10+!years!and!tens!of!millions!of!dollars!to!get!to!the!point!of!market!launch.!!!

It!was!suggested!that! the!presence!of!equity! investors! for!startDup!and!early!stage!ICT!companies!would! translate! into! investments! for!MedTech!companies!once! the!latter!began!to!experience!some!success.! !Experience!in!other!countries!has!shown!that! investors!will!eventually!migrate!to!MedTech!from!other!technologies!such!as!ICT,! but! progress! comes! incrementally.! ! That! InnAccel! is! providing! earlyDstage!funding!to!selected!client!firms!is!a!significant!advantage!for!the!ultimate!success!of!the!initiative.!!!


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SDS! was! impressed! with! the! funding! sources! reported! by! the! MedTech! startDup!companies! interviewed! during! this! study.! ! They! reported! receiving! funding! from!various!sources!such!as:!

• Venture!firms!like!IDG,!Accel,!Viva,!Aarin,!GVFL,!IIF,!etc.!for!Series!A!rounds!• Grants!and!soft! loans! from!government!departments!such!as!DST!(multiple!

programs),!DBT!(multiple!programs),!DeitY!• CNBC!–!Samsung!Award!for!Social!Innovation!• Angels,!angel!networks,!and!family!offices!!• Gates!Foundation!grants,!Wellcome!Trust,!USAID,!Omidyar!and!others!

Interviewees!generalize!that!a!“standard”!Series!A!round!can!range!from!$500,000D$5!million.!!Angel!investments!typically!range!from!$100,000!to!$500,000.!

Conclusion:! !Our! investigation! found!more!capital!available! for!MedTech!startDups!throughout!India!than!we!would!have!thought.!Certainly!there!have!been!successful!life! science! and! device! incubators! developed! in! the! US! and! elsewhere! with! less!access! to!capital! than!uncovered!during!this! investigation.!Not!only!has!the! Indian!Government! paved! the! way! with! multiple! revenue! streams,! but! seed! and! angel!investing!is!much!more!mature!than!we!would!have!imagined.!!InnAccel!proposes!to!fund! ventures! at! the! seed! stage! (up! to! $1MM),! and! this! will! ultimately! catalyze!followDon!investment!from!multiple!private!sources.!

4.-Lack-of-Domain-Expertise---

The! commercialization! pathway! for! MedTech! companies! involves! a! somewhat!longer! time! frame! and! higher! capitalization! than! ICT.! These! commercialization!differences!create!substantive!differences!in!all!the!functions!and!tasks!that!a!startDup! company! must! master.! ! For! this! reason,! it! is! critical! that! startDups! receive!commercialization! services! and! support! from! sources! such! as! InnAccel! that! have!significant! domain! business! experience! and! are! able! to! create! and! establish!networks!throughout!the!region!and!ultimately!the!country.!

Mentoring!and!support!are!critical!to!success!of!entrepreneurs.! !To!state!that!most!MedTech! founders! emerging! from! the! academic! environment! generally! lack!business!skills!is!an!understatement.!!And!because!of!the!differences!in!the!MedTech!commercialization!process,!it!is!extremely!important!that!individuals!who!are!going!to!provide!support!and!mentoring!have!domain!experience!and!expertise,!such!as!is!found! with! the! InnAccel! principals.! ! Among! the! MedTech! startDups! interviewed,!virtually! all! stated! the!need! for!mentors! and!executives! in! residence!with!domain!experience.!!!

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Conclusion:! ! Relative! to! the! commercialization! and! support! services! required! for!MedTech!startDup!companies!throughout!India,!a!major!gap!is! in!domain!expertise!and!experience.! ! InnAccel! founders!have!this!domain!expertise.! !As!these!founders!reside!in!Bangalore,!this!is!one!more!reason!to!have!an!initial!focus!on!the!Bangalore!region.!

5.-Lack-of-(a-developed)-MedTech-Cluster-(although-nascent-and-growing)----

An!industry!cluster!refers!not!only!to!the!number!of!companies!in!a!specific!industry!within! a! specific! geography,! but! also! to! the! connections,! communications,! and!shared! issues! that! lead! to! working! relationships.! ! The! MedTech! industry! in!Bangalore!does!not!meet!the!definition!of!a!cluster!at#this#point#in#time.!!Not!only!are!the!number!of!such!companies!relatively#few!in!number,!most!are!not!aware!of!each!other’s! existence,! let! alone! engage! in! interaction.! ! These! are! both! ills! that! an!InnAccel!MedTech!incubator!can!cure.!!!

There! are!only! two!approaches! for! increasing! the!number!of!MedTech! companies!that!reside!in!a!region.!!One!is!to!attract!companies!to!reDlocate!to!the!region,!and!the!other! is! known! as! ‘growing! your! own’.! !Most!MedTech! clusters! in!North!America!occurred! through! transfer! of! technology! from! local! universities! into! startDup!companies,!not!from!attraction!of!companies!to!relocate!their!operations.!!!

Developing!and!implementing!attraction!strategies!is!very!expensive!and!frequently!does!not!result!in!desired!success.!!The!primary!reason!for!a!company!to!relocate!to!a!new!region!is!for!financial!reasons!or!because!of!some!connection!that!the!CEO!of!the!company!has!to!a!particular!region.!!MedTech!companies!generally!are!founded!and!remain!in!the!community!where!the!inventor!of!their!technology!is!located.!!As!these!companies!grow,!both!increasing!their!inDhouse!research!staff!and!needing!to!acquire!significant! funding,! they!are!subject! to!pressure! to!relocate! to!be!closer! to!venture!capital!investment!firms.!!!

!The! key! factors! that! are! correlated! with! growing! the! MedTech! industry! are! as!follows:!

• Critical! mass! of! academic! and! private! research! activities! in! MedTech! and!related!areas!

• Effective!collaboration!between!clinicians,!engineers,!research!and!academic!institutions!

• Access!to!investment!capital!• Entrepreneurial!culture!• Industry!infrastructure!!

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• Access!to!transportation!for!both!people!and!product!• Skilled!workforce!• Quality!of!life!

While!all!of!the!above!may!be!important!for!most!technology!industries,!the!first!two!are!the!most!important!for!growing!the!MedTech!industry!in!India.!!However,!these!success! factors! are! not! causal,! meaning! they! existed! prior! to! the! growth! of! the!cluster.! ! Many! of! the! success! factors! followed! the! growth! in! the! number! of!companies,!jobs,!and!a!sense!of!community!among!cluster!companies.!!Even!Orange!County!California,!with!both!strong!high!tech!and!MedTech/device!clusters!for!many!years!suffered!a!lack!of!professional!service!providers!locally!and!had!to!travel!north!to!Los!Angeles!to!meet!its!needs.!!Thus,!an!attraction!strategy!that!focuses!primarily!on!professional!service!providers!in!order!to!grow!the!MedTech!industry!is!likely!to!fail.! ! These! firms! do! not! relocate,! or! open! additional! offices,! until! there! is! a!sufficiently!large!cluster!to!provide!the!revenue!stream!needed!to!support!multiple!offices.!

Looking!at!the!Bangalore!region!for!drivers!of!industry!growth,!it!is!evident!that!the!presence!of!the!larger!multiDnational!corporations!in!the!ICT!industry!was!a!function!of! their! acquisition! of! smaller! companies! within! the! region.! ! And! because! their!presence! provided! additional! benefits! (i.e.! access! to! a! highly! trained! engineering!workforce,!academic!researchers!and!innovations!in!their!fields),!they!remained.!

While! all! of! the! above! is! true,! it! doesn’t! mean! that! a! community! ignores! the!possibility!of! relocating!companies! to! the! region.! !The!key! is! to!be!smart!about! it:!!develop! specific! targets! (industries,! type!of! companies! at! the! appropriate! stage!of!development),! spend! time! establishing! relationships! to! understand! their! needs,!tailoring!incentives!to!the!specific!needs!of!a!targeted!company,!and!using!CEOs!of!existing! cluster! companies! as! ambassadors! to! companies! located! external! to! the!region.!!At!this!point!in!time,!Bangalore!has!some!drivers!for!attracting!companies,!but!lacks!others:!

Positive:! ! Educated! workforce,! entrepreneurial! climate,! leadingDedge! research! in!certain!fields,!concentration!of!MedTech!research!facilities!of!global!leaders!such!as!GE! and! Philips,! some! history! of! seed,! angel! and! venture! MedTech! investment,!commercialization!orientation,!and!relatively!proDbusiness!government!policies.!!

Negative:!!Relatively!few!Indian!MedTech!companies!and!no!sense!of!community!or!identity! among! them,! lack! of! small! increments! of! affordable! lab! facilities! and/or!prototype!development! space! already!built! out,! and! relatively! few!MedTechDsavvy!investors.!

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It!is!important!to!note,!that!incubators!per!se,!have!never!been!significant!attraction!magnets!for!established!companies.!!However,!they!are!an!important!component!in!attracting! faculty! with! strong! entrepreneurial! motivations.! ! If! one! examines! the!natural! progression! of! cluster! development,! it! generally! starts! with! a! strong!research/innovation!base!that!leads!to!commercialization!of!innovative!technology!within!the!region.! !This!in!turn!leads!to!development!of!a!skilled!workforce!within!the!cluster.!!And!once!the!cluster!reaches!a!critical!mass,!then!suppliers!begin!to!coDlocate,! skilled!workers! become!attracted! to! the! growing! cluster,! and! finally! at! the!end! of! the! cycle,! significant! corporate! actors! within! the! cluster! may! consider!relocation/expansion!to!the!region.!

6.-Others-

Our! investigation! is! intended! to!uncover!barriers!or!obstacles! to! success!ahead!of!time! so! that! the! incubator! developers!may!be!more!prepared! for! success.! ! In! any!feasibility!study,!one!can!discuss!barriers!that!are!generally!common!denominators!in! all! incubator! development! (access! to! capital,! adequate! marketing! plan,!developing! a! network,! etc.).! ! However,! during! this! analysis! there!were! a! few! key!issues!that!were!mentioned!by!multiple!interviewees!that!warrant!discussion:!

• Regulatory:! ! Currently! there! exists! no! regulatory! framework! for! medical!devices! and! diagnostics! in! India.! !While! a! regulatory! framework! has! been!drafted,! it!may!be! implemented!only!after! two!or! three!years.! !However,! in!India,!most!hospital!groups!and!practitioners!need!a!CE!certification13!or!FDA!approval!before!they!procure!a!product.! !Thus!the!CE!mark!has!become!the!de!facto!certification!standard!in!India.! !The!lack!of!a!regulatory!framework!has! both! positive! and! negative! effects.! ! The! main! positive! is! a! somewhat!simpler!commercialization!process!(getting!to!market).! !The!key!negative!is!that!it!may!be!difficult!to!retain!IP.!

• Nascent!MedTech!ecosystem:!There!exists!a!nascent!MedTech!ecosystem!in!large!population!centers!such!as!Bangalore,!Chennai,!Mumbai!and!New!Delhi.!!Although! these!MedTech! ecosystems! cannot! yet! be! classified! as! “clusters,”!the! existing! ecosystem! can!be!nurtured! into! a! cluster! over! the!next! two! to!three! years! in! any! of! these! regions.! ! Certainly,! development! of! a!MedTech!incubator! will! catalyze! cluster! development! in! whatever! geography! it!originates.!

• Infrastructure:! Lack! of! MedTech! specific! infrastructure! in! the! form! of!affordable! laboratory! space! and! prototype! development! facilities,! in!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!13!CE!certification!is!a!mandatory!conformance!mark!within!the!EU!that!certifies!that!a!product!meets!EU!requirements.!!It!originally!stood!for!“communaute!Europeene,!or!conformite!Europeene.”!!


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combination! with! an! effective! incubation! program.! ! Having! such!infrastructure! will! produce! incremental! demand! for! MedTech!entrepreneurship! while! concurrently! fueling! the! development! of! the!MedTech!cluster!in!whatever!geography!the!incubator!is!located.!

• Societal!Issues:!Much!has!been!written!about!the!societal!issues!in!India,!such!as! the! riskDaverse! culture,! and! a! reluctance! to! embrace! entrepreneurship.!!While! most! dissertations! concede! that! these! historical! cultural! norms! are!changing,!we!believe!they!fail!to!take!into!consideration!the!speed!with!which!these! norms! are! changing,! especially! in! a! region! such! as! Bangalore,!which!accounts!for!41%!of!all!new!ventures!launched!in!India.14!

Conclusion:! !During! the! last! decade,!more! and!more! communities! are! focusing!on!‘growing!their!own’!by!increasing!their!research!base!and!by!providing!services!and!support! for! entrepreneurs! and! startDup! companies.! ! InnAccel! should! focus! on!transforming!isolated!MedTech!companies!into!a!networked!community!to!create!a!sense! of! identity,! communication,! and! collaborative! activities.! ! This! will! not! only!provide!supporters!and!mentors!of!a!MedTech!incubator!and!its!client!companies,!it!will!also!provide!partners! for! identifying!and!attracting!other!MedTech!companies!to!the!region.!

F.##Business#Model#Validation##

SDS! takes! the! position! that! there! is! no! one! most! appropriate! commercialization!model.! ! ! Each! technology! incubation! program!offers! ideas! and! best! practices! that!others!can! learn!from!and!emulate.! !Every!technology!incubator!–! its!structure,! its!functions,!its!roles!–!is!unique!to!the!particular!set!of!factors!within!the!context!of!its!region.!!One!should!always!understand!what!makes!a!particular!model!work,!why!it!works! in! its! particular! context,! and! whether! it! can! be! transported! into! other!locations.!!

Duplicating!a!successful! incubation!model! in!a!different!geography!does!not!work.!!Any! given! geography!has! unique! assets! and! liabilities! that!must! be! capitalized! on!and/or!mitigated.! !That! said,! there!are! successful!models!of! forDprofit,! investment!portfolio!incubators!from!which!InnAccel!can!consider!various!elements,!depending!on!how!they!may! fit!within! InnAccel’s!mission!and!vision.! !There!are!a!number!of!such!models! in! the!U.S.,! such! as! The! Foundry,! The! Innovation! Factory! or! Coronis!Medical!Ventures.!!The!Coronis!model!is!detailed!in!Appendix!7.!

The!critical!common!denominators!of!all!successful!TBI!models!include:!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!14!The#Economic#Times;!economictimes.indiatimes.com/2013D03D29!

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• Experienced!founders!with!domain!expertise!• Delivery!of!niche!commercialization!services!• Access!to!capital!at!the!seed,!angel!and!venture!stages!• Development!of!a!clusterDfocused!network!

As!mentioned!in!the!previous!sections,!the!commercialization!process!for!MedTech!is!both!quantitatively!and!qualitatively!different!than!that!of!other!industries,!being!relatively!more! capital! intensive,! and!with! a! longer! development! period! than! ICT!companies.! However,! MedTech! is! significantly! less! capital! intensive! and! shorter!than!the!pharmaceutical!and!biotech!sectors.!!!

Understanding!the!commercialization!pathway!flows!logically!into!determining!the!model! for! the! MedTech! incubator.! ! MedTech! companies! typically! have! to! get!through! the! preDclinical! stage! at! a! minimum! before! they! can! secure! the! funding!and/or! strategic! partnerships! to! allow! the! company! to! attract! venture! funding.!!Thus! MedTech! companies! tend! to! become! incubator! tenants! earlier! in! their!development!and!stay!for!a!longer!period!of!time!(typically!three!years),!as!opposed!to!ICT!companies!with!a!much!shorter!gestation!period.!!

Most! MedTech! incubators! also! play! a! role! in! educating! faculty! and! wouldDbe!entrepreneurs! in! the! region! about! what! is! required! for! commercialization! and!where! to! find! resources.! ! MedTech! incubators! also! provide! a! focal! point! for!transforming! the! MedTech! cluster! into! a! community! with! connections! and!communication/networks!that!strengthens!both!the!cluster!and!provides!mentoring!to!the!startDup!companies!that!reside!in!the!incubator.!!Thus!the!incubator!staff!also!gets!involved!in!programs!for!the!MedTech!community.!!What!specific!roles!any!one!incubator! plays! depends! on! the! commercialization! services! and! support!infrastructure!that!already!exist!in!its!particular!region.!

SDS! has! seen! numerous! successful!MedTech!models,! notDforDprofit! and! forDprofit,!facilityDbased! and! virtual,! and! permutations! inDbetween.! ! Based! on! the! body! of!information! developed! during! this! investigation,! we! can! see! no! reason! why! the!InnAccel! forDprofit,! investment!portfolio!model!would!not!be!successful,!as! long!as!the!business!model!is!executed!as!postulated!by!InnAccel,!and!in!conformance!with!NBIA!best!practices!(best!practices!will!be!covered!in!the!business!plan!document).!

The! investment! portfolio! model! is! obviously! based! on! InnAccel! successfully!negotiating!a!minor!equity!stake!in!selected!clients!in!return!for!space!and!services!offered.!


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1.-Interview-Responses-

SDS! asked! MedTech! startDup! interviewees! specific! questions! regarding! funding!consistent!with!the!InnAccel!investment!portfolio!business!model.! !Some!examples!and!excerpts!are!as!follows:!

Question:!!Do!you!believe!that!“in!general,!entrepreneurs!understand!and!are!willing!to!exchange!ownership! for! funding,”!and!what!would!you!consider!an!appropriate!range!of!equity!stake! (in!percent)! that! the! fund!should!receive! in! the!startDup! if! it!capitalizes!the!startDup!with!Rs.2D3!crores!(range!from!ideation/concept!stage!to!1D2!year!old!firm!with!small!team).!

“…all# entrepreneurs# understand# that# capital# comes# at# a# cost.# But,# the# exact# cost# of#either#equity#or#future#revenues/profits#would#be#specific#to#each#case.”#

“Yes# the# model# of# exchange# of# ownership# for# funding# is# very# much# in# place# and#acceptable.”#

“A#reasonable#dilution#is#expected…if#the#value#proposition#is#right,#entrepreneurs#will#come.”#

“I#would#definitely#be#willing#to#pay#that#amount#for#the#entire#package#(of#space#and#services).”#

Question:!How!much!equity!would!you!have!been!willing!to!give!in!your!company!to!an! incubation!fund!for!Rs.2!crores!of! funding!after!1D2!years!of!operation?! !Would!you! also! have! allowed! the! fund! to! be! a! partner! in! decisionDmaking! after! funding?!Although! 3! of! the! 11! respondents! did! not! answer! the! question,! it! is! important! to!note!that!none!of!the!11!responded!negatively.!!Responses!were!generally!favorable,!with!excerpts!as!follows:!

“For#a#large#enough#market,#2=3#crores#could#get#a#40%#stake.”#

“The#fund#could#get#anywhere#between#10=20%#in#equity.”#

#“Equity#could#range#from#2=5%#or#10=12%.”#

“For#2=3#crores#funding,#30=40%#would#be#reasonable.”#(Another#respondent#indicated#49=51%).#

Question:! Assuming! a! three! year! incubation! period! in! a! MedTech! incubator,! and!presuming! you! would! have! requisite! physical! space,! labs,! product! engineering!


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expertise,!access!to!capital,!regulatory!assistance,!production/marketing!assistanceD–!i.e.!a!full!range!of!services,!would!you!be!willing!to!pay!in!the!range!of!Rs.!1D2!lakhs!per! month! for! space! and! services! (to! be! paid! from! the! funding! you! receive! in!exchange!for!equity)?#

“Yes,#would#pay#1=2#lakhs#per#month#for#a#full#range#of#services.”#

“Yes,# once# there# is# some# visibility# of# funding,# then# the# start=up# can# actually# get# the#funds#from#investors#to#put#in#for#this#and#would#pay#Rs.#1=2#lakhs.”#

Question:# If! the! InnAccel! incubation! fund! did! not! exist! and! your! firm! were!capitalized! by! other! investors,! would! you! find! it! attractive! to! be! incubated! at!InnAccel!with!a!fee!in!the!range!of!Rs.!1D2!lakhs!per!month!for!space!and!services?!

“If#the#start=up#is#getting#value,#and#is#able#to#grow#as#a#result#of#its#association#with#InnAccel,#then#yes,#it#would#pay#for#these#services#in#that#range.”#

“Without#the#funding,#it#will#be#a#little#more#taxing#for#them#to#go#beyond#Rs.#50,000#per#month.”#

“Some#start=ups#would#be#willing#to#pay#Rs.#1=2#lakhs#regardless#of#our#seed#funding#in#the#company,#but#earlier#stage#companies#may#not#be#able#to#pay#that#much.”#

“If#InnAccel#is#not#financing#the#project,#then#those#fees#would#not#be#reasonable,#and#would#be#difficult#to#pay.”#

Question:# If! a! private! incubator! like! the! one!we!described!were! to! be! set! up,! how!many! legitimate! MedTech! startDups! would! the! incubator! be! able! to! consider! for!tenancy!annually?!!In!the!first!year?!!After!three!years?!

“For#a#15=20,000/SF#incubator,#8#to#10#start=ups#would#be#feasible”.#

”For#20,000/SF,#7=10#start=ups#would#be#reasonable.”#

“I#think#15=20#would#be#the#maximum#in#order#to#give#adequate#attention#to#each.”#

“Not#sure,#but#15=20#would#seem#reasonable.”##


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2.-Focus-Group-Responses-

Focus!group!participants!were!asked:!“In!addition!to!services!and!facilities!outlined!in!previous!questions,!would!you! still!want! to!be! a! tenant! (at! InnAccel)! if! a!3D5%!equity!stake!were!required!in!return!for!obtaining!funding?”!!.!

Response# Number#Responding#Yes! 10!Yes,!with!qualifications! 2!No! 2!

Conclusion:!

Both! interviewees! and! focus! group! participants! overwhelmingly! affirm! the!proposed!financial!model.!

G.#Community#and#Stakeholder#Support#

The!interviews!conducted!by!SDS!found!universal!support!for!the!development!of!a!MedTechDspecific!incubator,!but!for!those!with!no!direct!knowledge!of!the!industry,!concerns! were! expressed! about! the! culture! of! entrepreneurship,! lack! of! investor!savvy!in!MedTech,!difficulty!in!marketing,!gaining!a!reputation,!etc.!

However,! from!existing!MedTech!entrepreneurs,!and! those! familiar!with!MedTech!in! general,! including! researchers,! there! was! a! different! consensus! that! India!desperately!needs!MedTech!incubation!space!to!accommodate!the!nascent!MedTech!cluster,!at! least! in! the!population!centers!of!Bangalore,!Chennai,!Mumbai!and!New!Delhi.!!These!interviewees!were!adamant!that!MedTech!entrepreneurs!and!startDups!required! commercialization! services! and! support! provided! by! those!with! domain!expertise.!

SDS!has!documented!earlier!in!this!study!that!there!is!adequate!demand!to!support!a!MedTech!incubator!replete!with!laboratory!and!prototype!development!space.!!An!essential! element! of! our! hypothesis! is! the! experience! (domain! expertise)! and!credibility!of!the!InnAccel!principals!and!management!team.!

Stakeholder! groups! were! specifically! asked! about! their! thoughts! regarding!partnering!with!InnAccel!on!this!initiative.!!Responses!were!generally!favorable,!and!excerpts!are!as!follows:!


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“We# have# already# sent# an# application# to# DBT# to# set# up# a# ‘Center# for# Technology#Innovations#in#Health,#IITB’#with#InnAccel#as#partner.”!(Professor,!IIT!Mumbai)!

“I#am#convinced#we#want#to#partner#with#InnAccel#to#support#MedTech#entrepreneurs,#and#am#ready#to#set#up#the#Accelerator#in#the#institute,#but#will#have#to#have#internal#discussions#first.”#!((Director,!IIIT!Bangalore)!

“We# would# like# to# partner# with# InnAccel# to# develop# a# long=standing# relationship.”#(Professor,!IIT!Delhi)!

“It#would#be#very#attractive#to#us#to#partner#with#InnAccel#in#certain#areas.”#(Surgeon,!St.!John’s!Hospital,!Bangalore)!

“We#would#consider#partnering#with#InnAccel#in#various#ways,#possibly#funding#start=ups,# providing# support,# field=testing# of# innovations# and# potentially# as# a# customer.”#(Advisor,!Venture!Fund)!

Conclusion:!

There! is! broad! stakeholder! support! for! the! InnAccel! concept,! and! primarily!academic!institutions!and!government!entities!would!like!to!partner!with!InnAccel!for!mutually!beneficial!reasons.!

H.#Location#and#Space#Analysis#

1.-Primary-Research-

Interviewees!were!asked!the!openDended!question:!What!are!your!thoughts!on!the!optimum!location!for!such!an!incubator.!

Respondents! primarily! mentioned! the! expected! key! population! centers,! but!Bangalore!was!cited!by!the!majority!as!the!optimum!location,!despite!only!31%!of!the!interviewees!being!from!Bangalore.!

NonDBangaloreDbased! respondents! often! mentioned! two! or! three! geographical!locations,!starting!with!the!one!in!which!they!reside,!then!listing!others,!and!in!this!instance,!Bangalore!was!mentioned!most!often!by!these!nonDresident!respondents.!!Respondents! also! frequently! mentioned! that! the! incubator! should! be! located!proximate!to!academic!or!government!research!institutions.!

“Bangalore#is#the#obvious#choice.”#


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“The#best#spot#is#Bangalore,#for#both#biology#and#engineering.”#

“The#top#four#places#would#be#Bangalore,#Mumbai,#Chennai#and#Pune#in#that#order.”#

“Bangalore#is#a#life#science#hub#already.”#(Respondent!from!Gujarat)!

“Pune#and#Bangalore,#primarily#because#of#the#existence#of#other#MedTech#start=ups.”!(Respondent!from!Mumbai)!

“Pune,#Bangalore#and#New#Delhi.”#(Respondent!from!New!Delhi)!

“Bangalore# would# be# a# good# place,# but# it# is# a# high=cost# center.”# (Respondent! from!Gujarat)!

2.-Secondary-Research-

Although!we!found!evidence!of!a!nascent!MedTech!cluster!in!the!top!four!population!centers!in!India,!Bangalore!is!the!recommended!initial!site!for!InnAccel!to!develop!a!MedTech! TBI.! ! In! the! Bangalore! region,! there! are! a! number! of! infrastructure!components! already! in! existence! and! successfully! fulfilling! their! roles.! ! These!structures! include! the! Indian! Institute! of! Science,! the! International! Institute! of! IT!(IIITDB),! St.! John’s! Medical! College,! the! Bangalore! Medical! College! and! Research!Institute,! and! the! Global! Innovation! Services! (technology)! Incubator! (Ginserv,!www.ginserv.in).! Additionally,! Bangalore! has! several! global! MedTech! industry!players! located!there,!such!as!GE,!Philips!and!Siemens.! !All!of!these!entities!have!a!stake!in!successful!technology!commercialization!within!the!region,!and!the!mission!for! all! at! least! partially! includes! supporting! entrepreneurship! and! growing!technology!companies.!!!

Perhaps! most! importantly,! Bangalore! has! an! established! technology! and!entrepreneurial! culture.! ! Such! a! culture! does! not! simply! appear! –! it! evolves! over!time,! and!new!successful! technology! entrepreneurial! ventures! increase.! ! That! this!culture!evolved!from!ICT!is!not!the!critical!issue.!!The!critical!issue!is!that!it!simply!exists,! and!has!had! a! positive! impact! on! traditional! Indian! values! that! historically!did! not! embrace! entrepreneurship.! ! As! ICT! continues! to! have! an! impact,! and! a!MedTech!cluster!develops,!successful!entrepreneurial!ventures!will!lead!to!liquidity!events!that!create!wealth!and!spinDoff!ventures!that!perpetuate!the!cycle.!

The!city!of!Bangalore!(2011)15! is! the!third!most!populous! in!India!at!8.5!million16,!making!it!the!18th!largest!city!in!the!world.! !Bangalore’s!population!has!undergone!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!15!The!Registrar!General!&!Census!Commission,!India!


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explosive! growth! of! 65%! from! 2001! to! 2011.! ! It! is! home! to! 21! engineering!colleges17,! the! Indian! Institute! of! Science! (IISc),!which! is! the! premier! institute! for!scientific!research!in!India.18!!The!International!Institute!of!Information!Technology!(IIIT)! is! located! in! Bangalore,! and! Bangalore! also! has! some! of! the! best! medical!colleges! in! India,! such! as! St.! John’s! Medical! College! (SJMC)! and! the! Bangalore!Medical! College! &! Research! Institute! (BMCRI).! ! All! of! these! institutions! generate!MedTech! intellectual! property! and/or! graduates! that! fuel! an! entrepreneurial!environment!throughout!the!Bangalore!and!Karnataka!region.!

Bangalore!is!known!throughout!the!world!as!a!technology!hub,!particularly! in!ICT,!with!242!information!or!communications!technology!firms!at!the!beginning!of!2013,!and#is#among#the#top#ten#preferred#entrepreneurial# locations#in#the#world.19! ! It! is!no!coincidence! that! the! firstDever! International! Conference! on! Business! Incubation,!sponsored!by!the!United!Nations!was!held!in!Bangalore!in!2000.!!Today,!Bangalore!leads!all!cities! in! India,!with!41%!of!all!new!ventures! launched,20!according! to! the!World!Startup!Report.! !And,!according! to!entrepreneurs! “…flocking! to!Karnataka’s!capital!say!they!are!drawn!by!a!unique!culture!of!mentorship!and!networking!that!pervades!the!city.”21!

With! a! Gross! Domestic! Product! of! $83! billion,! Bangalore! is! 4th! among! the! top! 15!cities! contributing! to! India’s!overall!GDP.22! !Bangalore!also! serves!as!an!economic!hub!of!defense!and!aerospace!as!well!as!biotechnology,!all!of!which!also!contribute!to!the!entrepreneurial!culture!that!is!more!advanced!in!Bangalore!than!perhaps!any!other!location!in!India.!

The!Bangalore/Karnataka!region!has!a!number!of!assets!identified!by!SDS!that!are!relevant!to!growing!the!MedTech!industry:!

• Vigorous!entrepreneurial!culture,!historically!ICTDfocused!!• Relatively!stronger,!more!diversified!economy!• Pro!technology!development!public!sector!!• Emerging!MedTech!in!region!• Home! to! research! centers! of! leading! global! MedTech! players! (GE,! Philips,!

etc.)!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!16!www.censusindia.gov.in!(2012)!17!www.discoverbangalore.com!18!Online!edition!of!The#Hindu!Vol.!23!–!Issue!17,!January!25,!2012!19!The#Economic#Times,!April!12,!2012!20!The#Economic#Times#economictimes.indiatimes.com/2013D03D29!21!Ibid!22!www.in.finance.yahoo.com,!March!3,!2012!


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• Emerging! strengths! in! related! fields! of! pharmaceutical! research,! drug!delivery,!and!nanotechnology!!

• Recognized!domain!expertise!in!ICT!

Approximately! 70%! of! the! top! venture! capital! firms! in! India! have! a! presence! in!Bangalore.! “Now! funds! such! as! Canaan! Partners,! SAIF! and! Lightspeed! Venture!Partners!based!in!Delhi!are!setting!up!offices!here”!(in!Bangalore).23!!“A!high!density!of! entrepreneurs! and! investors! is! also! drawing! established! entrepreneurs! to!relocate!to!the!city.!!If!you!are!a!technology!firm!focusing!on!the!global!market!and!cannot!start!in!Silicon!Valley,!then!Bangalore!is!the!best!place,”!according!to!Pallav!Nadhani,!who!moved!his!venture!Fusion!Charts!from!Kolkata!two!years!ago!and!has!since!clocked!revenues!of!Rs.!40!crore.”24!

3.-Space-Estimates-

Focus! group! participants! were! queried! regarding! anticipated! space! requirements!both!at!inception!and!after!two!years!of!operating!(responses!in!SF).!!They!were!also!asked!to!estimate!team!size,!and!responses!are!summarized!as!follows:!

Type#of#Space# At#Inception# After#2#Years#Office! ! - 300- 600-Laboratory- 300- 450-Storage(only!4!responses)! 200- 250-Total:- 800- 1300-Total#Without#Storage- 600- 1050-Average!Team!Size# 3.5# 10.5#

Conclusion:##

Over! time,! average! company! size! will! approximate! 800! square! feet;! therefore! a!20,000! square! foot! facility! with! 20%! common! area! could! accommodate!approximately!16D20!startDups!at!any!one!point!in!time.!

V.-RECOMMENDATIONS-

A.#Overall#

SDS!has!conducted!over!sixty!feasibility!studies!over!the!course!of!over!twenty!years!in! business! incubation.! ! We! believe! that! the! oneDonDone! interviews,! due! to! their!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!23!The#Economic#Times!economictimes.indiatimes.com/2013D03D29!24!Ibid!


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geographic!and!sector!diversity,! coupled!with! the! focus!group!data!and!secondary!market!research!all!lead!to!a!clear!indication!that!the!proposed!InnAccel!MedTechDspecific! incubator! is! indeed! feasible.! ! All! of! the! captured! data! suggests! pentDup!demand!for!such!a!sectorDspecific! incubator!and! leads!us! to!question!why!this!has!not! been! done! before.! ! We! therefore! have! confidence! in! our! recommendation! to!move!forward!with!a!15D20,000/SF!MedTechDspecific!TBI.!

Our! investigation! found!no!evidence!of!any! incubator! in! India! focusing!exclusively!on!the!MedTech!sector.!!There!are!only!a!few!incubators!in!India!that!belong!to!the!NBIA.! !Within! India,! there! are! approximately! ten! incubators! in! the! Indian! Science!and! Technology! Entrepreneurs! Park! (STEP)! program,! which! was! established! in!2004!to!share!information,!best!practices!and!develop!an!incubation!network!within!the!country.! !Additionally,!there!are!approximately!twenty!incubators!that!are!part!of! the! Technology! Business! Incubator! (TBI)! Program! under! the! NSTEDB.! ! Again,!none!of! these! incubators!occupy!the!MedTech!space,!which! leaves!a!vacuum!to!be!filled!by!InnAccel.!

B.#Provide#Key#Components#

InnAccel!should!provide!the!following!key!macro!components:!

• A! 15,000D20,000! square! foot! incubation! facility! with! support! services! to!accommodate!15D20!MedTech!startDups!at!any!one!point!in!time!

• Research!and!technology!resources:!Partner!with!key!academic!and!research!institutions! to! provide! access! to! specialized! equipment! and! incremental!technology!expertise!

• Advisors!and!mentoring:!The!founders!and!their!strategic!partners!will!need!to! provide! comprehensive! guidance! and! business! planning! support! to! the!startDups.! ! Additionally,! they! should! create! a! network! of! mentors! that! can!work!with!startDups!and!guide!them!on!development!and!commercialization!strategy,! organizational! development,! customer! acquisition! and! business!support!services!such!as!business!planning,!market!research!and!assessment,!IP!management,!international!trade,!MIS!and!regulatory/compliance!support.!!

• MedTechDspecific! business! support! services:! HR,! IT,! legal,!accounting/financial! management,! IP! management! and! market! research!services.!

• Access! to! capital:! Access! to! varied! capital! sources! including! equity!investment!and!public!sectorDbased!grants!and!loans.!

• Prototype! development:! ! Provision! of! or! access! to! “machine! shop”! type!equipment!for!prototype!development!

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• Engineering! and! product! development! platform:! Leveraging! founders!expertise! with! an! external! pool! of! specialists! and! a! proprietary! product!engineering!platform!to!drive!product!development.!

C.#Business#Model#Recommendations#

SDS! has! worked! with! virtually! every! form! of! TBI! model:! forDprofit! and! notDforDprofit;! virtual! and! facilityDbased;! sector! specific! and! general! technology;!government,! academia,! economic! development,! research! institution,! hybrid! and!privately!owned.!!As!a!result!of!our!extensive!experience,!we!believe!that!almost!any!model! can! be! successful! under# the# right# circumstances.! ! Each! TBI! program! offers!ideas!and!best!practices!from!which!others!can!learn!and!emulate.!!However,!every!TBI!is#unique#to#the#particular#set#of#factors#within#the#context#of#the#region#in#which#it#operates.!

Simply!duplicating!a!successful!TBI!model! in!a!different!geography!does!not!work.!!Any!given!geography!has!unique!assets!and!liabilities!that!must!be!capitalized!on!or!mitigated.!!That!said,!there!are!successful!models!of!forDprofit,!investment!portfolio!incubators! from! which! InnAccel! can! consider! various! elements,! depending! upon!how! they!may! fit!within! InnAccel’s!mission! and! vision.! ! One! such!model,! Coronis!Medical!Ventures,!is!detailed!in!Appendix!7.!

The!top!four!common!denominators!of!success!for!all!TBI’s!are:!

• Experienced!founders!with!domain!expertise!• Delivery!of!niche!commercialization!services!• Access!to!capital!at!the!seed,!angel!and!venture!stages!• Development!of!a!clusterDfocused!network!

From!all! of! the! research! and!data! gathered! during! the! course! of! this! analysis,!we!believe! that! the! InnAccel! forDprofit,! investment! portfolioDbased! business!model! is!not! only! the! most! appropriate! model,! but! is! also! the! model! with! the! highest!probability!of! longDterm!success.! !This!conclusion! is!reached! in!part,!based!on!our!experience,! and! also! on! our! due! diligence! of! the! InnAccel! founders,! their!background,! credentials! and! reputation,! as! well! as! the! primary! and! secondary!research!gathered.!

The! financial!model!has!been!validated!by!both!stakeholders!and!potential!clients.!!The! financial!model! of! small! equity! stakes,! coupled!with!monthly! fees! and!higher!equity! stakes! in! return! for! funding,! is! not! dissimilar! to! the! Coronis! model! in!Appendix! 7.! ! Variations! of! this! model! have! also! proven! successful! at! academic!

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institution’s!TBIs!throughout!the!U.S.!and!Europe.! !This!model!has!been!successful!simply!because!it!makes!good!sense:!value!is!exchanged!for!value!within!the!context!of!a!relatively!highDrisk,!highDreturn!environment,!where!specific!domain!expertise!is!the!crux!of!every!exchange.!

D.#Source#for#Success#

InnAccel! will! actively! source! the! prospective! clients!with! the! highest! potential! in!“affordable! MedTech! specific! innovation”! from! India! and! globally.! ! As! previously!discussed,! it! is! believed! that! at! least! initially,! the!primary! source!of!dealDflow!will!come! from! academic! and! research! institutions! that! are! generating! MedTech! IP.!!However,! once! a! marketing! initiative! is! implemented,! and! word! begins! to! get!around!within!the!MedTech!cluster,!incremental!demand!will!flow!from!many!other!sources,!such!as:!

• Seed,!angel,!and!venture!funds!and!investors!• Hospitals!• Corporate!spinDouts!• Independent!research!institutions!• Community!MedTech!entrepreneurs!• StartDups!attracted!from!outside!the!region!

Success!is!a!relative!term!that!is!dependent!on!the!mission!established!for!any!given!incubator.! !Successful! incubators!are!typically!characterized!by!one!or!more!of!the!following!key!factors:!

• Value#Added#Resource#Network:#Successful!TBIs!have!a!well!established!and!diverse! resource! network! of! professional,! academic,! business! and! service!providers! with! the! business,! technology,! and! commercialization! expertise!needed! to! support! the! businesses! served! by! the! incubator…the! resource!network! and! its! integration! into! the! incubation! is! one! of! the!major! factors!that!differentiate!an!incubator!from!a!business!or!technology!park.25!

• Access#to#Capital!• Sound#Screening#Practices:#Successful!TBIs!effectively!qualify! candidates! for!

incubation;!MedTech!clients!have!a!product!that!can!typically!be!brought!to!market! in! approximately! three! years;! have! the! technology! capacity! to!complete! the! product;! and! have! a! willingness! to! work! with! the! coaching,!mentoring!and!resource!network!provided!through!the!TBI.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!25!Louis!G.!Tornatzky,!et.!Al.!The#Art#&#Craft#of#technology#Business#Incubation!NBIA,!1996,!54!

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• Sufficient# Market# Demand:! Successful! TBIs! must! be! located! in! areas! with!sufficient! technologyDbased! entrepreneurial! activity.! ! Thus,! these! TBIs! are!typically! located! proximate! to! major! technologyDbased! business! centers,!research!institutions!and!research!universities.!

• BroadDbased# Stakeholder# Support:# Successful! TBIs! have! a! broad! base! of!financial,!programmatic!and!operational!support!from!multiple!communities!within! their! region.26! ! Establishing! linkages! with! strategic! partners,!investors,!and!sources!of!IP!generation!are!keys!to!success.!#

InnAccel’s!goal!shall!be!tightly!focused!on!nurturing!clients!to!a!successful!Series!A!round!of! funding!or!a! liquidity!event.! ! InnAccel!has!a!preliminary!vision!(to!be!the!preeminent!MedTech!accelerator! system!globally! for! “affordable! innovation,”)!and!mission! (to! successfully! develop! 100! innovative! medical! technologies! for! the!developing!world! consumer”).! ! Both! the! vision! and!mission!need! to! be! translated!into!vision!and!mission!statements,!which!will!ultimately!drive!subsequent!decisionDmaking.! ! SDS! will! develop! these! statements! as! part! of! the! followDon!business/operating!plan.!

E.#Conclusions#and#Next#Steps#

As!previously!stated,!SDS!concludes!that!a!MedTechDspecific!TBI!is!indeed!feasible,!and! the! suggested! initial! location! is! Bangalore.! ! SDS! concurs! that! the! privately!backed,!forDprofit,!investment!portfolio!model!is!the!most!appropriate!model,!given!the! unique! circumstances! determined! through! the! course! of! this! research.! ! A! few!additional!considerations!include:!

1.-Geographic-Market-Served-

NBIA!periodically!surveys!incubators!in!North!America!and!publishes!best!practices.!!The!general!rule!of!thumb!is!that!an!incubator!can!serve!an!area!within!a!radius!of!60!miles.! !However,!that!depends!on!both!the!existence!of!other!incubators!within!that! area,! as!well! as!whether! the! area! is! urban! or! rural.! ! Based! on! its! experience!working!with!scores!of!incubators!across!North!America,!SDS!has!found!that!a!more!realistic!rule!of!thumb!is!a!maximum!of!30!minutes!drive!time.!!In!urban!areas!such!as!Bangalore,!traffic!congestion!can!significantly!decrease!the!geographic!radius.!!As!there!are!no!incubators!in!all!of!India!that!have!a!specific!MedTech!focus,!we!believe!development! of! a! MedTechDspecific! incubator! in! Bangalore! can! and! will! be!successful,! and! pull! adequate! market! demand,! initially! from! within! the!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!26!Ibid,!138!

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Bangalore/Karnataka! region,! and! ultimately! from! a! more! broad! geography! until!such!time!as!another!MedTech!incubator!is!built!in!a!different!geography.!

Faculty!members!that!start!MedTech!companies!typically!stay!actively!involved!with!the! company! for! a! longer! time! period! while! still! maintaining! their! academic!position.! ! Eventually!most! faculty! founders! step! out! of! the!management! role,! but!remain! involved!as! chief! scientific!officer!or! chair!of! the! scientific! advisory!board.!!For!a!MedTech!incubator!that!expects!to!draw!many!of! its!tenants!from!university!researchers! and/or! students,! location! is! a! critical! issue.! ! Faculty! and! student!entrepreneurs! want! the! incubator! facility! located! as! close! as! possible! to! the!university!campus.!!!

2.-Facility-Considerations-----

Facility! considerations! will! delineate! options! and! recommendations! for! several!decisions!that!involve!the!physical!structure:!!location!within!the!region,!size!of!the!facility,! allocation! of! different! types! of! space! (laboratory,! production,! office! only,!shared!and!common!space,!unit!size,!and!other!characteristics!or!attributes!desired!by!MedTech!incubator!tenants.!

The!next! question! for! consideration! involves!whether! to!house! the! incubator! in! a!new! facility,! or! to! investigate! adaptive! reDuse.! ! While! officeDonly! incubators! can!easily!use! renovated! space! in! an!existing!building,! that! is!not!necessarily! the! case!with!MedTech! incubators.! !The!cost!of!building!out! laboratory! space! in!a!building!that!was!once!or!is!currently!an!office!or!manufacturing!facility!is!almost!as!great!as!the!cost! to!build!the! facility! from!the!ground!up.! ! In!many!cases,!construction!cost!savings!that!accrue!from!renovating!an!existing!building!are!more!than!offset!with!higher! operating! costs! and! negative! impacts! on! dayDtoDday! operations! once! the!incubator! is! operational.! ! The! following! are! a! few! reasons! why! a! new! building,!specifically!designed!and!built!to!contain!research!laboratories!is!preferable:!

• Older!buildings!often!do!not!have!adequate!HVAC!systems!to!provide!the!increased! number! of! air! turns! required! in! some! laboratories.! ! While!additional! capacity! can! be! added,! the! roofs! of! older! buildings! typically!cannot! handle! the! increased! weight! of! the! necessary! equipment.!!Ductwork!also!has!to!be!replaced!in!order!to!accommodate!the!increased!flows.!

• Existing! electrical! and! plumbing! systems! often! have! to! be! replaced! to!meet!building!codes!for!the!increased!usage!and!for!the!types!of!research!found!in!laboratory!facilities.!


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• One! of! the! critical! differences! in! the! design! of! facilities!with! laboratory!space!is!the!floor!to!ceiling!height.!!It!must!be!significantly!greater!than!in!standard! buildings! in! order! to! accommodate! the! ductwork! and!electrical/plumbing!channels!that!laboratory!research!activities!require.!

• The! interior/exterior! walls! of! renovated! buildings! often! offer!aesthetically!pleasing!brick!work!from!an!earlier!era,!this!is!not!the!type!of!material! that! is!best! in! laboratory! facilities!as! the!brick!or!stonework!degrades!over!time,!releasing!particles!into!the!labs!and!airways.! !Again,!not!ideal!for!research.!

The!appropriate!size!of!the!facility!is!the!next!question.!!The!NBIA!guideline!for!the!minimum!size!of!an!incubator!is!30,000!SF.! !NBIA!research!has!shown!that!with!at!least! this! gross! square! footage! and! 75%! being! leasable,! incubators! can! generate!60%!of!their!operating!revenues!from!rental!income.!!However,!these!statistics!are!based!on!the!typical!(US)!notDforDprofit! incubator.! !As!InnAccel!will!be!a!forDprofit,!investment! portfolio! model,! size! becomes! less! important,! and! it! is! likely! that! a!15,000D20,000!square!foot!facility!will!be!adequate!for!InnAccel’s!purposes.!

The!next!step!is!to!determine!how!the!leasable!space!is!allocated!among!laboratory,!production! space,! and! offices.! ! This! depends! on! a! number! of! factors! such! as! how!early!in!the!stage!of!development!a!company!is!admitted!to!the!incubator!and!how!long! the! different! types! of! companies! stay.! ! It! should! be! noted! that! “graduation”!from!an!incubator!is!highly!dependent!on!the!company!being!able!to!raise!adequate!funding! for! the! next! stage! of! its! development,! and! thus! for! MedTech! companies,!tenancy!typically!runs!around!three!years,!although!this!is!by!no!means!absolute.!!!

Focus!Group! respondents! indicate! that! initial! space! requirements! average! around!600!square! feet!per!company!at! inception,!growing! to!approximately!1050!square!feet! after! two! years! of! operations.! ! More! importantly,! 100%! of! respondents!indicated!the!need!for!both!laboratory!and!office!space.!

MedTech! incubator! laboratory! or! production! units! typically! include! one! or! two!integrated!offices.!!However,!it!is!advisable!to!build!additional!office!space!external!to!the!laboratories.!!These!external!offices!can!be!used!by!startDups!before!they!are!ready! to! move! into! more! expensive! lab! units.! ! Also,! as! companies! develop! their!technology,!the!business!function!expands,!and!additional!staff!are!hired!that!do!not!work!in!the!labs.!

An! issue!sometimes!gets!raised!about!whether! laboratory!space!should!be!built! to!maximize! flexibility! and! reDconfiguration.! ! However,! the! added! cost! of! building!movable! benches,! and! sometimes!movable!walls,! is! not! the!most! efficient!way! to!


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accommodate! individual! company! needs.! ! A! better,! or! at! least! more! economical!method!frequently!employed!in!MedTech!incubators!is!to!build!laboratory!units!of!various!sizes!with!lockable!doors!between!units.!!When!a!company!grows,!the!doors!can!be!unlocked!or!removed,!allowing!the!company!to!expand!into!the!neighboring!unit.!!Laboratories!can!then!be!equipped!by!tenants!to!meet!any!specialized!needs.!

3.-Next-Steps-

Initially,!the!feasibility!of!the!proposed!InnAccel!MedTech!incubator!was!the!central!question!to!be!answered.!!Now!that!the!project!is!deemed!feasible,!a!logical!next!step!is! the! development! of! a! business/operating! plan! that! details! and! expands! on! the!mission!and!vision,!and!serves!as!a!guide!to!successful!operation!of!a!MedTech!TBI,!based! on! the! specific! findings! herein,! and! accepted! NBIA! best! practices.


54

Appendix-1-

Interviews#by#Stakeholder#Type# #Stakeholder#Sector# # Number#of#Interviews#Government!Agencies- 6!Investors!(Venture!Capital)- 5!Large/Established!MedTech- 3-EarlyDStage!MedTech- 11!Academic/Research!Institution- 5!Clinicians/Physicians- 5!

- - !

!

! ! ! ! ! ! !!!!

! ! ! ! ! !

! ! ! ! ! ! !

!

!


55

Appendix-2-

Interviewees#and#Affiliation#Dr.!Rinti!Banerjee!Professor!IIT!Bombay!!

Avijit!Bansal!Founder!Windmill!Health!

Arindam!Bhattacharya!CEO!Technocratz!!

Dr.!Jagdish!Chaturvedi!Physician!St.!John’s!Hospital,!Bangalore!

Jyoti!Chaudhary!Project!Manager!UNOPS!!

Sanjay!Chaudhary!Partner!Tata!Capital!

Anand!Daniel!Principal!Accel!Partners!!

Dr.!Rajakumar!Deshpande!Neurosurgeon!Fortis!Hospital!

Dr.!Ravikrishnan!Elangovan!Assistant!Professor!IIT!Delhi!!

Prasanna!Hota!ExDUnion!Health!Secretary!Government!of!India!

D.!V.!Jagadish!CEO!Incubation!Center!IIIT!Bangalore!!

Hemanshu!Jain!CoDFounder!Diabeto!

Dr.!Niranjan!Joshi!Researcher!HTIC!!

Taher!Khorakiwala!Managing!Director!Meemain!Advisors!

Dr.!R.!Kim!Chief!Medical!Officer!Aravind!Eye!Care!!

Anant!Koppar!Advisor!Karnataka!IT!Ventures!

Dr.!Anjali!Kulkarni!Clinical!Specialist!Perfint!!!

Sashi!Kumar!Managing!Director!Phoenix!Medical!Systems!


56

Leo!Mavely!CEO!Axio!Biosolutions!!

Ranjith!Menon!Vice!President!IDG!Ventures!

Adarsh!Natarajan!Founder!AIndra!!

Dr.!Bipin!Nair!Dean!Amrita!School!of!Biotechnology!

Kurian!P.!Oommen!QA/Procurement!UNOPS!!

Dr.!Uday!Patil!Physician!Medall!

Rajesh!Rai!Managing!Partner!IIF!!

Ravi!Ramaswamy!Director,!MRI!Philips!Innovation!Campus!

Suresh!Sarojini!Program!Director!HCL!!

Ravi!Shankar!Director!of!Engineering!Neuation!

Nitin!Sisodia!CEO!Sohum!Innovation!Laboratories!!

Ambar!Srivastava!Founder!Wrig!Nanosystems!

Nandakumar!Subburaman!CEO!Perfint!Healthcare!!

Taslimarif!Sayed!Research!Director!Department!of!Biotechnology!

Dr.!Renu!Swarup!Advisor!Dept.!of!Biotechnology,!BIRAC!

Gnanasekar!Veluswamy!Principal!Architect!Perfint!Healthcare!


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Appendix-3-

Focus#Group#Survey#

INNACCEL-

MedTech-Accelerator-FEASIBILITY-STUDY-

APRIL-2013-

Technology-Accelerators-are-a-special-type-of-business-incubators-that-provide-highZvalue- services- to- startZup- technology- businesses- with- an- aim- to-accelerate- their- product/solution- development- and- reduce- time- to- market.-Technology- Accelerators- in- India- have- typically- focused- on- IT- and- Internet-business,- while- globally,- medical- technology- (MedTech)- is- a- big- area- for-incubation-and-technology-acceleration.-

Acceleration- services- are- tailored- to- the- specific- needs- of- each- individual-company,- and- can- include- product- development- support,-mentoring,- shared-workspace- with- other- startZups- and- access- to- seed- funding,- among- others.-These-facilities-provide-small-increments-of-affordable-space,-along-with-dayZtoZday-help-and-nurturing-to-accelerate-the-growth-of-startZup-businesses-and-ensure- their- financial- stability.- - Entrepreneurs- have- the- opportunity- to-interact-with-nonZcompetitive,- likeZminded-individuals-in-the-highZrisk/highZreward-MedTech-sector-on-a-daily-basis.-

InnAccel- is- considering- the- development- of- such- an- Acceleration- facility- to-serve- MedTech- entrepreneurs- in- the- Bangalore- region.- Your- input- on- the-following- survey- will- provide- very- valuable- information- to- help- us- design-space-and-services-based-on-the-needs-of-current-or-wouldZbe-entrepreneurs-such-as-yourself.-

Personal- Information! (optional)!This# information#will#not#be#divulged,#and# is#only#requested#should#we#need#to#follow#up#with#you#on#any#specifics.!

Name_____________________________________________________!

Company/Affiliation___________________________________!

Telephone/email_______________________________________!


58

1.!Have!you!already!started!your!business?!

!!!!! _____Yes! _____No!!!!!_____In!process!

! If!!yes,!what!kind!of!MedTech!(be!specific):!

! ___________________________________________________!

If!not,!what!kind!of!MedTech!business!are!you!considering!starting,!and!when!do!you!anticipate!starting!operations?!!

! ___________________________________________________!

2.! How!much! space! did! you! need!when! you! started! operations,! or! will! you! need!when!you!do!start!operations?!What!about!after!1!year!and!2!years!after!starting?!Please!answer!in!square!foot!(approx)!or!the!number!of!teamDmembers!you!would!need!space!for,!and!make!estimates!for!the!future.!

! ! ! At-inception- - After-Yr-1- - After-Yr-2-

Total-Sq-ft-

- Office-

- Private-Lab-

- Storage-

- Other-

Team-Size-

3.!Would!your!business!require!any!specialized!equipment!and!resources!that!could!be!shared!with!other!tenants!(clean!room,!prototyping!machine,!etc.)?!!If!so,!please!describe:!!

___________________________________________________!

___________________________________________________!


59

4.! Some! types! of! nonDlab! space! can! also! be! shared,! such! as! conference! rooms,!library,! small! meeting! rooms,! training! classroom,! kitchenette,! etc.! What! types! of!shared!space!would!you!find!valuable?!!

! ___________________________________________________!

___________________________________________________!

5.!What!types!of!business!assistance!did!you!need,!do!you!need,!or!do!you!expect!to!need?!!Please!indicate!level!of!importance!by!placing!a!number!1!through!5!next!to!each! of! the! following! services,! with! 5! being! very! important! and! 1! being! of! little!importance:!

! Access!to!Capital_____!

! Accounting/Financial!Reports_____!

! Business!Plan!Development_____!

! Legal!and!IP!Support_____!

! Market!Research_____!

! Commercialization!Support_____!

! Product!Engineering!and!Development_____!

! Regulatory!Support_____!

Mentoring!and!Strategic!Input_____!

!!!!! Administrative!and!Secretarial!Services_____!

! Others!(please!describe)_________________________________!

6.!Have!you!already!accessed!one!or!more!of!the!above!types!of!assistance?!!If!yes,!what!type!and!what!organization!or!entity!have!you!utilized?!!Please!indicate!level!of!helpfulness!(1!through!5)!with!5!being!the!most!helpful,!and!1!least!helpful:!

Type!of!Assistance! ! From!what!Organization! ! Helpfulness!(1D5)!

_______________! ! ! ____________________! ! ! _______________!


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7.!What!is!your!general!perception!of!the!business!climate!in!the!Bangalore!region!for!earlyDstage!business!today?!

Excellent_____!Very!good_____! Good_____! Fair_____! Poor_____!

8.!ToDdate,!how!have!you! financed!your!business!(self,! friends/family,!debt,!equity!such!as!angel!investor!etc.,!sales!revenues,!etc.)?!

! ___________________________________________________!

9.! InnAccel! is! exploring! the! feasibility! of! establishing! a! MedDTech! Accelerator!serving! 12D15! earlyDstage,! MedTech! businesses.! The! Accelerator! will! identify! and!work!with!selected!entrepreneurial! teams! that!are!working!on! innovative!medical!technologies!addressing!the!emerging!markets,!with!a!focus!on!costDinnovation!that!dramatically!reduces!the!cost!of!quality!medical!devices!and!diagnostics.!

The!Accelerator!will!provide!office!and!lab!space,!specialized!research!equipment,!a!trained! Acceleration! team! to! support! startDups,! a! product! engineering! and!development! platform,! and! relationships! with! hospitals,! engineering! colleges,!clinical! advisors,! mentors,! technical! consultants! and! other! resources.! The!Accelerator!will! be! able! to! arrange! equity! funding! (up! to! $1MM)! from! its! partner!venture! fund! (IHV)! for! a! 3! year! acceleration! period! to! selected! startDups! (funding!will! be! only! available! for! startDups! being! accelerated! at! InnAccel)! in! return! for! a!negotiated!equity!stake.!

The! Accelerator! would! charge! an! acceleration! fee! from! each! startDup! of!approximately!Rs.!1!to!2!lakhs!per!month,!which!would!include!office!and!lab!space,!access! to! equipment,! acceleration! services! and! resources.! The! fee!would! increase!proportionately!as!the!teamDsize!increases,!and!can!be!roughly!equated!to!Rs.30,000!per!teamDmember!per!month.!

! I!would!definitely!consider!becoming!a!tenant!and!investee!co_____!

I!would!have!considered!being!a! tenant!at! the! time! I! started,!but!no! longer!need!such!assistance_____!

! I!would!not!consider!becoming!a!tenant!and!investee!co_____!

! If!not,!why!not_____________________________________________________!


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I! would! consider! becoming! a! tenant! but! would! not! want! InnAccel’s!investment!funding_____!

! Why___________________________________________________!

10.!!If!you!were!a!tenant!in!the!proposed!facility,!would!you!want/need!24/7!access?!!!

! Yes_____! No_____!

! If!no,!what!hours!would!you!anticipate!needing!access?!

11.! Many! Accelerators! require! a! small! equity! stake! in! addition! to! rent! in!consideration!of!all!of!the!services!and!support!the!center!gives!to!startDups.!!Would!you!still!want!to!be!a!tenant!at!the!Accelerator!if!it!required!you!to!provide!a!small!equity! stake! to! the! Accelerator! (3D5%)! under! the! same! financial! terms! as! for! the!funding!being!provided!by!the!associated!venture!fund?!!

! Yes_____! ! No_____!

! If!no,!why!not?!

_____________________________________________________!

12.!Are!there!any!other!questions!we!should!have!asked!that!we!did!not?!

_____________________________________________________!

Other!comments?!

_____________________________________________________


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Appendix-4-

Focus#Group#Summary#Results#

1.!9!of!15!respondents!had!already!started!a!MedTech!business;!6!anticipate!starting!one!

2.! Would! your! business! require! any! specialized! equipment?! ! Most! common!responses!include:!

• Measurement!equipment!(microbalance)!• Spectrophotometer!• Rapid!Prototyping!(3D!printing)!• Prototyping!Facilities! (i.e.,! “machine! shop”! equipment! such!as!drills,! lathes,!

CNC,!etc.)!• Optical!equipment!

Conclusion:# # InnAccel!will!need!to!supply!(procure!or!provide!access!to)! the!above!equipment! at! a! minimum;! therefore! cost! of! equipment! should! be! factored! in! to!development!costs.!!!

3.!What!type!of!shared!space!would!be!valuable?!

• Conference!and!meeting!rooms!• Videoconferencing!facilities!• Library!(access!to!scientific!journals)!• Kitchenette!• Space!conducive!to!brainstorming/recreationDleisure!activities!

Conclusion:#Common!areas!such!as!above!must!be!factored!into!facility!plan.!

4.!What!types!of!business!assistance!did!you!need,!do!you!need,!or!do!you!expect!to!need?! ! Indicate! level! of! importance! with! 5! being! very! important,! 1! being! least!important.!!(Responses!are!ranked!in!order!of!perceived!value:!

Type#of#Assistance# Average#Rating#(1F5)#Access!to!Capital! ! ! ! 4.7!Commercialization!Support! 3.9!Market!Research! 3.6!Mentoring/Strategic!Input!(tie)! 3.5!


63

Regulatory!Support!(tie)! 3.5!Business!Plan!Development!(tie)! 3.3!Legal!and!IP!Support!(tie)! 3.3!Product!Engineering!and!Development! 3.1!Accounting/Financial!Reports! 2.8!Administrative/Secretarial!Services! 2.4!

Conclusion:# InnAccel’s! proposed! incubator/accelerator!model! as! defined!will!meet!the! primary! unmet! needs! of! MedTech! startDups.! ! InnAccel! will! outsource! certain!services! (law,! accounting,! regulatory,! etc.)! and! provide! other! services! within! the!domain!expertise!of!the!principals.!

5.!Have!you!already!accessed!one!or!more!of!the!above!types!of!assistance?!!If!yes,!what! type! and! what! organization! have! you! utilized?! ! Please! indicate! level! of!helpfulness!with!5!being!most!helpful,!and!1!being!least!helpful:!

Type#of#Assistance# From#Organization# Helpfulness#(avg.#score)#

Accounting! CA,!local!network! 3.5!Strategic!Input! Stanford!Biodesign,!HTIC,!IIM!

(Bangalore),!local!network!3.5!

Legal/IP! Local!firms! 4.0!Access!to!Capital! Nirma!Labs,!Villgro,!Gates!Foundation! 3.0!Market!Research! Local!network! 5.0!Clinical/!Regulatory! Local!consultants! 4.0!

Conclusion:#StartDup!assistance!in!many!instances!is!limited!to!local!networks!which!are! not! fully! developed.! ! InnAccel! has! the! opportunity! to! vet! qualified! and!appropriate! service! providers! while! enhancing! the! growth! and! quality! of! the!MedTechDspecific!network(s).!

6.!What!is!your!general!perception!of!the!business!climate!in!the!Bangalore!region!for!earlyDstage!businesses!today?!

Rating# Number#of#Responses#Excellent! 3!Very!Good! 8!Good! 3!Fair! 0!Poor! 0!


64

Conclusion:# 100%! of! respondents! perceive! the! business! climate! for! startDups! in!Bangalore! is! good! or! better;! 69%! rate! as! very! good! or! excellent.! ! ! This! positive!outlook!bodes!well!for!development!of!a!MedTech!incubator!in!Bangalore.!!

7.! ToDDate,! how! have! you! financed! your! business:! (9! responses,! but! some! have!multiple!answers)!

Response# Number#of#Responses#Grants!(TDB,!DST,!MSME)! 3!Convertible!Debt! ! 1!Government!Loans! ! 1!SelfDfunded!(at!least!initially)! 3!Venture!Capital! 3!Angel!Funding! 2!

Conclusion:#Although!respondents!rank!access!to!capital!as!their!top!priority,!many!are! finding! funding! available.! ! The! Indian!Government! has! been! better! than!most!countries!in!the!provision!of!various!forms!of!access!to!capital!for!early!stage!TBEs.!!One!must! keep! in!mind! that! in! general,! entrepreneurs’! perception! is! that! there! is!never!enough!capital.!

8.! In! exchange! for! office! and! laboratory! space,! specialized! equipment,!mentoring,!technology! and! commercialization! assistance,! etc.! would! you! consider! paying! Rs.!30,000! per! team!member! per!month! (or! Rs.! 1! to! 2! Lakh! per! startDup! per!month,!based!on!team!size)?!!

Response# Number#of#Respondents#Definitely!Yes! 7!Would!have!when!started,!but!no!longer!need! 5!Yes,!with!qualification! 0!No! 1!

Conclusion:#These!responses!validate!the!proposed!InnAccel!financial!model.!

9.!If!you!were!a!tenant,!would!you!want!or!need!24/7!access?!

! ! 13!of!13!respondents!(100%)!answered!affirmatively!


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10.! In! addition! to! services! and! facilities! outlined! in! question! #! 9,! would! you! still!want! to! be! a! tenant! if! a! 3D5%! equity! stake!were! required! in! return! for! obtaining!funding?!

Response# Number#of#Respondents#Yes! 10!Yes,!with!Qualifications! 2!No! 2! (Not! willing! to! dilute! equity;! would!

diminish!value!proposition)!

Conclusion:# 85%! of! respondents! further! reaffirm! the! proposed! InnAccel! financial!model.!


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Appendix-5-

Interview-Questionnaires-

Academic#Institute#Respondents#

Demography#

Name!of!Institute:!

Name!of!Respondent:!

Designation!at!Institute:!

Responsibilities!at!Institute:!

Please!discuss!any!specific!programs!at!your!institute!relating!to!medical!technology!or!bioengineering:!!

How!many!faculty!members!and!research!staff!do!you!have!in!these!programs?!

! Number!of!faculty_____! Number!of!research!staff____!

How!would!you!rate!the!strength!of!your!faculty!in!these!programs!(high,!low,!etc)?!

Please!discuss!student!strength!in!these!in!medical!technology!and!bioengineering.!!Which!fields!have!the!most!students!in!pursuit!of!advanced!degrees?!

!!!!!!!!!!!BS! ! MS! ! MTech!! ! PhD! !

Medical!technology!and!bioengineering!programs!often!have!areas!of!niche!specialty!–!what!do!you!consider!those!specialties!at!this!institution?!

Are!there!any!other!activities!(besides!the!above!mentioned!academic!programs)!at!your!institute!in!the!medical!and!healthcare!technology!space?!

MedTech-StartZup-Ecosystem-Today-

Do!you!know!of!any!MedTech!startDups!that!have!emerged!from!your!institute!in!the!last!3!years?!If!so,!list/describe:!(name,!area,!team,!status).!!If!you!do!not!know,!can!you!suggest!anyone!with!whom!we!might!speak!to!get!more!specific!information!on!these!startDups?!


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Do!you!know!of! any!other!MedTech! startDups! from!other! institutes!or! elsewhere?!!Or,! can! you! suggest! someone! with! whom! we! might! speak! to! that! could! provide!details!on!these!other!startDups?!

What! are! the! key! barriers! to! success! for! MedTech! startDups?! ! Besides! funding!(which!is!an!omnipresent!issue)!what!do!you!consider!the!top!two!or!three!obstacles!to!success!of!MedTech!startDups?!

Have!you!seen!any!evidence!of!earlyDstage!seed!funds,!angel!or!venture!investing!in!MedTech! startDups?! ! If! so,! please! provide! details,! or! suggest! someone!who! could!provide!those!details.!

Does!your!Institute!have!technologies!or!IP!available!for!licensing?!!yes/no!

In!the!MedTech!area?!!yes/no!!!

If!yes,!enumerate!and!describe:!

What!support!does!your!Institute!provide!for!entrepreneurship!in!general!and!in!the!MedTech!field!in!particular?!

If! none,! would! the! institute! consider! (financial?)! support! for! InnAccel! to! provide!entrepreneurial! assistance! and! commercialization! services! (in! order! to! create! a!potential!revenue!stream!for!your!institution)?!

What! are! the! other! efforts! your! Institute! to! drive! innovation! in! medical! and!healthcare!technologies?!

Does!your!Institute!have!an!incubator?!yes/no!!If!not,!why!not?!

If!so,!what!resources/services!does!the!incubator!provide!(office!space,!labs,!access!to! capital,!mentoring,! business! support,! technical! expertise,! product! development!platform)?!

How!would!you!describe!its!fit!with!the!requirements!of!MedTech!startDups?!

Does! anyone! in! the! incubation! program! have! the! necessary! domain! expertise! in!MedTech!or!bioengineering?!

How!would!you!rate!the!business!support!network!and!commercialization!services!in!Bangalore,!Chennai!and!Mumbai!for!MedTech!startDups?!


68

Through!what!organizations/entities!are! these!services!derived?! !Can!you!provide!contact!information!on!those!entities!so!we!can!meet!with!them!and!get!specifics?!

What!needs!of!current!and!potential!MedTech!startDups!are!not!met!by!the!existing!incubation!ecosystem?!!Rank!in!importance,!1,2,3!excluding!access!to!capital.!

What!are!the!key!needs!that!a!new!incubator!should!meet!to!enable!MedTech!startDups! to! successfully! develop! technologies! and! products?! ! Focus! should! be! on! the!programmatic! aspects—buildings! and! shared! services! do! not! commercialize! new!businesses.!

Concept-Testing:- Describe-the-proposed-InnAccel-Accelerator-

Overall!assessment!of!the!concept!(i.e.,!what!is!your!reaction!to!the!concept)?!

What!are!the!most!important!gaps!that!an!InnAccel!incubator!could!fill?!(Rank!1,2,3)!

Will! the! presence! of! such! an! incubator! spur! MedTech! innovation! and!entrepreneurship?!In!general?!At!their!Institute?!

How! do! you! think! a! MedTech! incubator! could! impact! innovation! and!entrepreneurship!at!your!institute?!!How!do!you!suggest!we!go!about!integrating!an!InnAccel! incubator! into! the! fabric! of! your! institution! (i.e.,!market/promote!within!the! institution;! what! are! the! top! three! things! we! could! do! that! would! impact!entrepreneurship!at!the!institution?-

Government#Agencies##

Name!of!Department:!


Designation!at!Dept.:!

Responsibilities!at!Dept.:!

Email!Address:!

Phone!Number:!



69

Do!you!know!of!any!MedTech!startDups!that!have!emerged!in!Bangalore,!Chennai!or!Mumbai! in! the! last!3!years?! ! If!so,! list/describe:! (name,!area,! team,!status!and!any!contact!information!you!may!have,!or!where!we!can!obtain!such!information).!

What!do!you!consider!to!be!the!key!barriers!to!success!for!MedTech!startDups?!

What! kind! of! support! does! your! Department! provide! to! research! projects! in! the!MedTech!space,!both!academic!and!private?!!

How! does! this! support! (financial! or! otherwise)! get! approved! (i.e.,! what! is! the!process)?!

Does! your! department! have! any! form! of! policy! in! dealing! with! incubation! and!technology! startDups! –! especially! in! the! MedTech! area?! ! If! so,! please! describe! –!guidelines,!specific!requirements,!etc.!

Do! you! know! of! any! incubators! (academic! or! private)! that! support! and! incubate!MedTech!startDups!in!Bangalore,!Chennai!or!Mumbai?! ! If!yes,!please!describe!their!model,!and!provide!any!contact!information!you!may!have!or!know!how!to!obtain.!

What!resources/services!do!these!incubators!provide?!

(Office#space,# labs,#access#to#capital,#mentoring,#business#support,#technical#expertise,#product#development#platform,#regulatory#assistance,#intellectual#property#protection,#access#to#professional#business#service#providers#(pre=vetted#law,#accounting,#internet,#communications,#etc)?###

Are!there!any!services!or!resources!specific!to!MedTech!(such!as!shared/specialized!space,!equipment!–!i.e.,!dry!labs,!autoclaves,!etc.)?!

How!would!you!rate! the!effectiveness!of!current! incubators! in! India! in!supporting!MedTech!startDups!and!innovation,!and!what!is!the!basis!for!your!answer?!!Do!they!track!success!metrics!(graduated!companies,!jobs!created,!wages,!paid,!ROI,!etc.)?!

Are!there!any!existing!small!business!support!services!available!for!MedTech!startDups?!!How!would!you!rate!their!effectiveness?!!What!do!you!perceive!as!the!gaps!in!their!services!that!need!to!be!addressed?!

Concept-testing:-- Describe!proposed!InnAccel!Accelerator.!

What!is!your!overall!assessment!of!our!concept?!


70

What!are!the!most!important!gaps!that!an!InnAccel!incubator!could!fill!(rank!1,2,3)?!

Will! the! presence! of! such! an! incubator! spur! MedTech! innovation! and!entrepreneurship?!!

What!are!your!thoughts!on!the!optimum!location!for!such!an!incubator?!

What!ways,!if!any,!would!your!department!consider!partnering!with,!or!supporting,!such!an!incubator!ecosystem?!

D Partnership!where!dept.!funds!and!InnAccel!incubates!startDups!D Support!for!incubator!setup!and!operations!D FieldDtesting! of! “affordable! innovations”! from! InnAccel! at! govt.! health!

centers!and!hospitals!D Dept.!as!customer!for!specific!innovations!

Are!you!aware!of!any! international! funding!sources! for!MedTech!startDups!and/or!incubators,!either!in!collaboration!with!your!dept.,!or!otherwise?!

What!other!input!and!guidance!would!you!like!to!give!us?!

Investor#Questionnaire#

Name:!! !

Company:!! !

Role:! ! !

Date:! ! !

Do!you!currently!invest!in!MedTech!companies?!yes/no!!!!!

What!strategy!do!you!follow!(sectors,!stage,!etc.)?!

What!is!your!assessment!of!the!MedTech!startDup!ecosystem!in!India?!

What! is! your! assessment! of! existing! incubators! and! the! incubation! ecosystem! for!MedTech?!

What!are!the!critical!gaps!in!MedTech!incubation!in!your!opinion!in!India?!(Top!3)!


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What!investing!strategy!do!you!follow!in!MedTech!(sectors,!stage,!etc)?!

What!are!typical!valuations!and!investment!amounts!seen!at!the!seed!stage?!

What! is! the! typical! time! to! Series! A?! The! typical! valuation! increase?! The! typical!Series!A!amounts?!

What!are! the!exit!paths! for! seedDstage!and!Series!A! investors?!What! is! the! role!of!strategic!buyouts?!

What!are!the!sources!of!seedDcapital!(first!external!money)!in!India?!

What! are! your! views! on! MedTech! as! an! investment! sectorD! and! likely! exit!opportunities!for!investors!in!this!sector?!

Incubator-concept:-

15=20,000/SF#physical#facilities,#set#up#in#collaboration#with#academic#partners,#with#labs,# equipment,# office# facilities,# and# a# trained# incubation# team.# Besides# physical#infrastructure,# the# incubator# will# provide# a# proprietary# Product# Engineering# and#Development# platform# for# start=ups,# an# extensive# network# of# clinical,# technical# and#business# resources# to# guide# product# development# and# organizational# growth,# and#funding#(average#$0.5MM#per#start=up)#during#the#incubation#phase.#

What!is!your!evaluation!of!the!concept?!Will!this!meet!the!gaps!in!the!ecosystem?!

What!are!the!key!success!factors!for!the!incubator?!

Would!there!be!enough!entrepreneurial!activity!in!India!if!such!resources!and!seedDcapital!were!made!available?!!

What!would!the!ideal!location!be!for!such!incubators?!

MedTech#Large#Company#Respondents#

Name!of!Company:!


Designation!at!Company:!

Responsibilities!at!Company:!


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Email!Address:!

Phone!Number:!


Do!you!know!of!any!MedTech!startDups!that!have!emerged!in!Bangalore,!Chennai!or!Mumbai! in! the! last!3!years?! ! If!so,! list/describe:! (name,!area,! team,!status!and!any!contact!information!you!may!have,!or!where!we!can!obtain!such!information)?!

What! do! you! see! as! the! key! barriers! to! entrepreneurship/success! in! the!Medical!Technology!field!in!India?!

Are!you!working!with!any!incubator!–!either!as!a!resident!client!or!affiliate!(offDsite)!member?!!If!no,!have!you!been!incubated!in!the!past?!!If!yes,!which!incubator!(name,!location! contact! information)! and! please! describe! the! value! proposition! and! your!overall!experience!with!the!incubator.!

Do! you! know! of! any! (other)! incubators! (academic! or! private)! that! support! and!incubate!MedTech!startDups!in!Bangalore,!Chennai!or!Mumbai?! !If!yes,!which!ones,!and!provide!contact!information.!

What!resources/services!did!your!incubator/!these!incubators!provide?!

(Office# space,# labs,# mentoring,# business# support,# technical# expertise,# product#development# platform,# access# to# capital,# assistance# with# regulatory# hurdles,#professional#business#services,#IP#protection?)#

Any!services!or!resources!specific!to!MedTech!(regulatory,!IP,!etc)?!

How!would!you!rate!the!effectiveness!of!your!incubator/other!incubators!in!India!in!supporting!MedTech!startDups!and! innovation?! !Please!describe! the!basis! for!your!answer! on! effectiveness.! ! Does! the! incubator! track!metrics! (graduate! companies,!jobs!created,!wages!paid,!etc.)?!

What! entities! provide! support! or! commercialization! services! for! MedTech! in!Bangalore,!Chennai!or!Mumbai! (name!of!organization,! contact! info,! etc.),! and!how!would! you! rate! the! business! support! network! and! commercialization! services! for!MedTech!startDups?!!What!is!the!basis!for!your!rating!(explain)?!


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What!are!the!top!three!needs/gaps!of!current!and!potential!MedTech!startDups!that!are!not!being!met!by!the!existing!incubation!or!business!support!ecosystem?!

What!are!the!top!three!needs!that!a!new!incubator!should!provide!in!order!to!enable!MedTech!startDups!to!successfully!develop!technologies!and!products?!

Concept-Testing:- Describe-the-proposed-InnAccel-Accelerator-

What!is!your!reaction/assessment!to!the!overall!InnAccel!concept?!

Do! you! believe! InnAccel! will! meet! the! existing! gaps! in! the! MedTech! innovation!ecosystem?!!Explain.!

Will! the! presence! of! such! an! incubator! spur! MedTech! innovation! and!entrepreneurship?!!Explain!in!detail.!

What!are!your!thoughts!on!the!optimum!location(s)!for!such!an!incubator?!

Do!you!believe! that! in!general,! entrepreneurs!understand/are!willing! to!exchange!ownership! for! funding?! ! If! not,! why! not?! ! If! so,! what! would! you! consider! an!appropriate!range!of!equity!stake!(in!%)!that!the!fund!should!receive!in!the!startDup,!when! it! capitalizes! the! startDup!with!Rs.! 2D3! crores?! (Range! should! consider! pure!idea/concept!stage,!to!a!startDup!that!is!1D2!years!old!with!a!team)!

Assuming!a!3!year! incubation!period! in!a!MedTech! incubator,! and!presuming!you!would!have!requisite!physical!space,! labs,!product!engineering!expertise,!access!to!capital,! regulatory! assistance,! production/market! assistance! –! i.e.,! a! full! range! of!services,!would! you!be!willing! to! pay! in! the! range! of!Rs.! 1D2! lakhs! per!month! for!space!and!services!(to!be!paid!from!the!funding!you!receive!in!exchange!for!equity)?!!Explain!why!or!why!not.!

If! a! private! incubator,! like! the! one!we! described,!were! to! be! set! up! in! Bangalore,!Chennai,!or!Mumbai!how!many! legitimate!MedTech!startDups!would! the! incubator!be!able!to!consider!for!tenancy!annually?!!In!the!first!year?!!After!3!years?!!What!is!the!basis! for!your!answer!(and!where!will! they!come!from/originate!–! i.e.,!what! is!the!source!of!the!IP)?!

What!is!your!view!on!the!Series!A/B!funding!ecosystem!for!MedTech!startDups!(first!institutional!round)?!

D When!do!they!typically!invest!(at!what!stage)!


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D Size!of!investment!and!equity!stake!taken!D Does! the! investor!buy!out! the!angel! investor!or!seedDstage! investors,!or!

do!they!simply!have!their!original!investment!diluted?!

Is! there! a! viable! strategy! for! a! MedTech! startDup! in! India! to! take! a! product! to!market?! ! Please! detail! effective! strategies! you!have! seen.! !What! are! the! risks! and!benefits!of!partnering!(does!“partnering”!include!a!stake!of!ownership)!with!a!large!player!(Indian!or!MNC)?!

Knowing!what!we!are!trying!to!accomplish,!is!there!anything!else!that!we!have!not!discussed!that!you!think!would!be!important!for!us!to!know?!

Physicians/Hospital#CEO’s#

Company/Entity:!

Name:!

Title:!

Responsibilities:!

Email:!

Phone:!

With! the! exception! of! clinical! trials,! do! you! conduct! research,! or! is! research!conducted!at!this!institution?!

Have! you! (or! the! hospital)! ever! filed! or! been! issued! patent(s)! in! the! MedTech!sector?!

Are! you! aware! of! any! MedTech! startDups! by! peers! or! former! employees?! ! If! so,!list/describe,! and! provide! any! contact! information,! or! where! we! may! get! such!information.!

Do!you!believe!there!are!future!opportunities!for!startDups!here?!Why!do!you!think!so,!and!where!would!they!come!from?!!

Do!you!have!any!research!partnerships!with!universities!or!corporations?!!Explain.!


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Is! there! any! unused! space! at! the! hospital! that! could! potentially! be! used! as! a!MedTech!incubator?!!If!yes,!describe!space,!square!footage!available,!etc.!!

What! are! the!key!barriers! that! exist! for! starting!new!MedTech!businesses?! !What!would!be!the!involvement!of!clinicians!from!your!organization!in!MedTech!startDup!activities! (as! entrepreneurs,! teamDmembers! or! advisors)! if! these! barriers! were!addressed?!

What! commercialization! services! or! support! infrastructure! currently! exist! within!the! region! to! facilitate! the! startDup! and! success! of! MedTech! companies?! ! Who!provides!these!services!(obtain!contact!information),!and!can!you!provide!details!of!services!offered?!!Are!these!services!effective?!!

What!are!the!top!three!needs/gaps!of!current!and!potential!MedTech!startDups!not!being!met!by!the!current!ecosystem?!

Concept-Testing:-- Describe-the-proposed-InnAccel-Accelerator-

InnAccel! is! considering! developing! a! MedTech! incubator! in! (Bangalore,! Chennai,!Mumbai)!to!accelerate!the!pace!of!development!of!MedTech!startDups.!!What!is!your!reaction!to! this!overall!concept,!and!do!you!have!a!sense!of! if! there! is!demand!for!incubation!space!and!services?!

Will! the! presence! of! such! an! incubator! spur! MedTech! innovation! and!entrepreneurship,!in!general?!!At!your!institute?!

What!would!be!the!demand!for!such!an!incubator!from!MedTech!startDups?!

How!do!you!suggest!we!go!about!integrating!an!InnAccel!incubator!into!the!fabric!of!your!institution!(i.e.,!market/promote!within!the!institution;!what!are!the!top!three!things!we!could!do!that!would!impact!entrepreneurship!at!the!institution?!

What!are!your!thoughts!on!the!optimum!location!for!such!as!incubator?!

Do! you! have! any! other! thoughts! on! this! topic! that! might! be! helpful! to! us?


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Appendix-6!


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Appendix-7-

Coronis#Medical#Ventures#

Coronis!Medical!Ventures!in!Sunnyvale,!California!is!an!excellent!model!to!examine.!!It! was! founded! by! partners! similar! to! Dhanani! and! Vijayarajan:! Carl! Simpson,! a!veteran!of!the!medical!device!startDup!industry,!and!a!few!peers,!all!with!experience!in!various!parts!of!the!device!industry.!

Coronis! provides! a! blend! of! seed! capital,! venture! development! and! prototyping!support!for!early!stage!medical!device!companies.!!Coronis!is!actively!engaged!with!each!incubatee,!and!delivers!handDon!“development,!invention,!leadership,!guidance!and!nurturing!as!well!as!access!to!a!staffed!and!operational!FDADregistered!pilot!and!commercial!manufacturing!facility.”27!

Coronis’! competitive! advantage! is! similar! to! that! of! InnAccel:! founders! have!extensive! industry! experience,! successful! track! records,! investment! acumen,! and!extensive!MedTech!industry!network!relationships.!

Coronis! taps! many! sources! to! find! and! invest! in! the! best! opportunities.! ! First,!Coronis!identifies!unmet!clinical!needs!(as!InnAccel!has!identified!the!need!for!costDeffective!devices! in!developing!economies).! !Then,!Coronis!uses! inDhouse! technical!and!business!expertise!to!develop!new!product!and!solution!concepts!and!address!the!identified!need,!or!find!the!solution!(IP!and/or!product).! !InnAccel!proposes!to!do! the! exact! same! thing! by! establishing! relationships! with! extensive! sources! of!MedTech!IP.!!Coronis’!source!of!new!companies!(dealDflow)!comes!from!its!extensive!network! of! entrepreneurs,! physicians,! universities,! venture! capitalists,! angels,!corporations!and!other!service!providers.! !This! is!virtually!the!same!network!as! is!being!developed!by!InnAccel.!

For! Coronis,! all! prospective! projects! must! meet! the! same! basic! criteria! for!commercial!success:!

• Significant!clinical!benefit!with!large!market!potential!• Developmental!lead!over!competition!and!opportunity!for!market!leadership!• Favorable!economics!and!prospects!for!reimbursement!• Efficient!use!of!capital!with!reasonable!regulatory!and!clinical!pathway!• Strong!IP!position!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!27!Coronis!has!a!unique!partnership!with!Stellartech!Research!Corporation,!located!next!door!to!Coronis.!!Stellartech!provides!a!controlled!environment!for!manufacturing,!assembly!and!packaging.!


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The! InnAccel! model! will! evaluate! projects! using! similar! criteria! to! the! above.!!Furthermore,! InnAccel! will! then! provide! seed! capital,! assemble! a! core! team,! and!assist!with!initial!product!prototyping!as!well!as!the!design!and!completion!of!earlyDstage!research! to!demonstrate!proof!of! concept.! !At! this!point,! it! is! typical! to!seek!followDon! financing! to! facilitate! efficient! commercialization! leading! to! an! eventual!liquidity!event.!

Through!the!execution!of!this!model,!InnAccel!will!bring!a!strong!value!proposition!to! entrepreneurs! and! investors.! ! InnAccel! can! be! systematic,! proactive! as!well! as!opportunistic!to!identify!promising!new!opportunities.!

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