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Late-Stage Dealmaking Takes Off

Some VCs insist that only 25%-30% of device investments find a successful exit -- significantly better than the 10% of biotech deals, but still far from a sure thing. As a result, over the past year or so, there has been a marked increase in interest in late-stage dealmaking -- investments made at Series C or later or via alternative vehicles such as PIPE deals and SPACs.

It is axiomatic in medical devices that venture capitalists (VCs) only like to do early-stage deals. Because the technology risks are so much lower and product prototyping and vetting is so much quicker than, say biotechnology, the argument goes, early-stage investors get more equity for their money—and therefore a higher return on their capital—by investing early without necessarily incurring a lot of risk.

But though the inherent risk of medical devices is low, it is not entirely absent from device dealmaking. Anecdotally, some...

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