At Mutual Capital Partners (MCP), we know that we could not be successful investors and mentors to our portfolio companies, if not for the incredibly talented and experienced limited partner investors (LPs) who support our fund. Our investment decisions are often shaped by the knowledge they bring to the table and the guidance they give to our portfolio companies. In this series of profiles on our various LPs, we hope to highlight many of their unique experiences and insights and better share how MCP brings expertise along with capital.
Dr. Bryan DenHartog is an orthopedic surgeon and innovator with over 30 patents.
Q: You played a large part in the success of OrthoHelix. What are some of the biggest lessons you learned working with that company?
Building a successful company is not easy- it takes more than most new entrepreneurs expect. In my time working with OrthoHelix, sitting on the board of Crossroads Extremities, and working in a technology incubator, I have learned that many moving parts must come together in order to create a great startup.
It is crucial to have talented and trustworthy teammates. You will need people with different skill sets; a CEO who can set a vision and expectation for the company, a CFO who makes sure you don’t run out of money, engineers who can rapidly develop great products in a timely manner, and a sales and marketing team that makes sure your product doesn’t just stay sitting on a shelf. Those great teammates are usually found through solid relationships, either by coming to work with people they have worked with previously or someone else they trust has worked with these people.
In addition to a good team, you have to have great ideas and great products that fit a need in the market. These ideas come from individuals who have a lot of experience in the space and understand what the needs and frustrations are. David Kay, the founder of OrthoHelix, always says "ask yourself where is the pain? What do you wish you could change to make the treatment we give to patients more predictable?" Use those questions to target a need in the market. Today startups need a truly distinctive product, if not two or three unique products. Those differentiated products will get you in the door- and it has to be able to be explained in an elevator ride.
Finally, most startups fail because they run out of cash. You have to track cash closely, especially during the early stages where you are investing more money in the product, team, and educating the market than you are generating in revenue. If you need to bring in venture capital to fund the business, make sure the fund you choose brings more than just capital. There are numerous funds out there that bring just money. You need a fund that has expertise, can add value to your board, and especially have contacts in the market to help generate sales.
Q: What trends in the healthcare industry are you excited about?
One of the big trends in healthcare over the last few years has been focused on the operating room. The market is interested in products and systems that improve quality and reduce cost. Even big health systems are looking at ways to reduce overall costs, including saving time. The cost of running an OR is over $100 a minute, so any way to minimize that makes a difference. Studies have also shown better patient outcomes with fewer complications when you reduce time they are under anesthesia and the time a wound is exposed.
Another trend I’m seeing is a focus on precision. Many patients don’t realize there is a big variation in motor skills among surgeons. There is a need in the market for devices that allow a surgeon to do things more predictably and accurately. Part of this is seen in the focus on minimally invasive procedures. This is a good way to reduce trauma to the body while still allowing accuracy.
Q: With over 30 patents, you have a long track record of innovation. Can you tell us how you go from an idea to creating something patentable?
I started designing implants in the early 2000s, and it’s important to have experience in the field. As I mentioned previously, you need to know where the needs are, what works and what doesn’t work in the operating room, and what can be done better. Once you think you have an answer to those questions you need to try and detail that idea: what does it look like, how does it function, what are the different parts, how complex will it be?
I always design with two or three other people. Sometimes it’s done independently, or sometimes it is done with a larger organization in the space (make sure you have an NDA!). It’s very important to collaborate with others and get their feedback. You might think you have a great idea, but others might bring you back to reality that it isn’t that great. Find people who have experience in the industry and can offer you those different perspectives; the end user, the person who would sell your product, and the person who would buy it.
When the idea has been defined, I work with an IP attorney. It’s important to find one that understands you’re a startup with limited resources, because filing a patent (and review of the IP landscape) can be expensive. The attorney's job is very valuable because you need to make sure there’s no infringement on other patents before you file. This is a much bigger process than you might think, and chances are someone else has thought of something close to your idea. It’s important to see what is out there as you’ll likely find some overlap.
Overall, it is an exciting process. It’s satisfying to see your intellectual property become a real product and get commercialized. There’s nothing like seeing something you’ve designed put in a human body and seeing it meet the need for which it was designed.
Q: What advice would you give to entrepreneurs thinking about pitching MCP?
The first thing you have to do is make a case for why your product is special and meets an un-met need. Tell a compelling story and share your vision of where you are going and how you will get there. Have a product pipeline that can build on the platform you have created.
Next, it’s very important that you have a scalable market. You could have a great, unique product that can help people, but if the market is too small then it’s not a fit for most venture capital companies.
It’s critical that management and the sales team are the right people. In OrthoHelix we started with a team that was remote and wasn’t working on the company full time. We had to get onsite management that was committed to the company before the business began to grow. In sales you need people with experience and great connections. MCP will look at how fast the company will be able to grow and this is a huge component.
Finally, you have to show some sales traction before you can convince a VC to invest. Generating revenue is a great way to de-risk the investment. You want to show sustainable growth year over year.
Dr. DenHartog completed his medical degree at the University of Iowa College of Medicine, completed his residency in Orthopedic Surgery at the University of Kansas School of Medicine, and completed his fellowship training in Foot and Ankle Surgery at the Medical College of Wisconsin. Dr. Den Hartog is a Diplomat of the American Board of Orthopedic Surgery, a Fellow of the American Academy of Orthopedic Surgeons, a Fellow of the American Orthopedic Foot and Ankle Society and an officer on the board of American Orthopedic Foot and Ankle Society (AOFAS).
Dr. DenHartog has over 30 patents for the design and development of orthopedic implants used around the world, and he has authored more than 25 peer-reviewed scientific papers; all with the goal of improving the quality of surgeries and outcomes for patients with complex lower extremity injuries and conditions.
His profound interest in teaching led him to develop a surgeon education website called footinnovate.com that has grown to over 5,ooo surgeons worldwide. He also has been a reviewer for Foot and Ankle International since 2004 and has been a featured speaker internationally spanning five continents.
Dr. DenHartog and his wife Nancy, have three sons and four grandchildren.