In basic terms, how do venture capital firms work?
We raise capital from investors (called limited partners) typically to create a sizeable fund. Then, we try to find companies in which to invest that have certain characteristics—in our case, early stage and with a disruptive technology focused on a very large market opportunity. By disruptive, I mean a novel technology or intervention that will allow surgeons to treat a disease better, earlier, or more cost effectively than in existing practice. We invest on average $10 to $15 million per company, and we attract other venture firms to invest with us. Typically, in the medical device arena, it requires some $40 to $80 million to fund a company to develop a technology, take it through clinical studies and the FDA regulatory path and then on to the market. The timeline is often 5 to 10 years. We invest in the earliest-stage companies that may have as few as half a dozen employees and over time build them to 100 or more employees. For venture capital investments to do well, the company is