MedTech and Medical Device Incubator: navigating the MedTech startup landscape,
 a new approach to investment and medical device development

The medical device development and production fields promise considerable potential when it comes to the nurturing of innovative startups committed to transforming the industry and improving patient care as they do so. 

The role of an incubator is to provide the necessary support for seed-stage entrepreneurs to establish a company or business, based on a new technology under research and development. 

This support takes multiple forms and usually begins with a financial investment over a predetermined period of time. The incubator can then provide the necessary space for the startup to occupy as they work, and with this provide the necessary managerial, administrative, and marketing assistance as it develops its product. 

The key role of an incubator is to help entrepreneurs generate strategic business networks and relationships that will encourage further investments from other investors. In return, the incubator may receive a share in the company ownership of up to 40%. This may represent a considerably large financial risk for the incubator, but with concerted research and planning, and the right incubator, the potential for the success of the startup is high. 

The expectations for the entrepreneurs joining the incubator are set by the incubator, but will usually involve the preparation of a business plan charting the expected development of the startup, and the company responsible for developing it. 

There will also be an expectation that the startup can demonstrate the technological and marketing feasibility of its product, and this might involve producing a prototype or beta version of the intended final product. The startup will also be expected to be able to lead the venture to a point where it is capable of attracting initial customers, and be an attractive target for commercial investment - both of venture capital funds, as well as potential strategic partners. 

One of the main shortcomings limiting the success of incubator programs for medical technology companies currently is the limited broad support for the medical device startup company’s complete development and production needs. 

Generally, startups are expected to independently, and without the support of their incubator, source different subcontractors for assistance with R&D, prototype production, production of initial series for clinical trials, and DFM (Design for Manufacture). This commonly means high expenses even before they have been able to reach the serial production and distribution stages. This in turn places a great strain on the budget set by the incubator and more often than not results in the failure of potentially successful MedTech startups and their products. 

Further limits, set by the parent incubator on the percentage of their budget that startups can allocate to subcontractors, usually capped at a limit of 15% of its annual budget, creates a situation where the startup is dependent instead on more expensive in-house employees and support. 

Chaban Medical however has a different vision, and is committed to a different way of working that will encourage the development of advanced, creative, and innovative MedTech within Israel. Chaban’s aim is to establish the first medical device incubator that addresses the weaknesses and challenges of the current system, and instead provides a new way of working. 

Chaban’s approach, scaffolded by the infrastructure and expertise of the Chaban Group, and specifically Chaban Medical, aims to create an unprecedented strategic advantage that aims to significantly reduce the risks involved for the investing partner while improving the success rate of the startups involved. 

The Chaban Group has the capabilities and facilities to provide accepted start-up companies with their own offices on-site with Chaban, as well as all the necessary and managerial support. Chaban’s assistance will also uniquely provide these startups with the necessary R&D assistance – electronic packaging, documentation/configuration control, hardware and software (in-house) and PCB development (outsourced to a strategic partner) that will mean the startups will not need to source subcontractors or external assistance thus guaranteeing both quality control, and a reduction in expenses. 

Chaban is also able to provide the manufacturing infrastructure necessary for producing prototypes and initial series, mechanical and electrical assemblies, cleanroom operations, and lab space that will accompany startups throughout the complete cycle development and production phase. 

This in-house, on-hand support will not only reduce potential expenses and a reliance on subcontractors but will also reduce the time needed to get a new product to market. This in turn means the startups involved have a higher chance of successfully completing the R&D stages. 

The Chaban Group has extensive experience to accompany medical device startups through the technical consulting stage in order to reduce their R&D time, as well as any extra costs derived from incomplete system designs.

This combination of extensive experience combined with Chaban’s advanced and comprehensive in-house facilities for medical device development and production are what make Chaban’s incubator program stand out from the rest. 

The incubator will act as a subsidiary under the partnership between the investors and Chaban. 

Chaban’s role will be to assist with the determination of the incubator budget in advance, and funds will be allocated to projects on a case by case basis for medical device investment. Potential investors in the incubator will be entitled to decide which areas their investment will be allocated to, and in the process understand their future returns and potential risks. 

Chaban will also liaise with the startups and their potential projects for the incubator. This review process will involve a filtering process conducted by the Chaban Group based on the estimated potential, business plan, current development stage, and forecast for completion. 

The Chaban group understands medical device development and has the experience to be able to review and filter potential MedTech startups in terms of their product development potential and potential for a return on investment in it. 

Chaban’s commitment is to the development of quality MedTech and medical devices Israel that will enrich the field of patient care. The establishment and management of a medical device incubator that draws on Chaban’s extensive MedTech experience, as well as its in-house development and manufacturing facilities, aims to revolutionize the medical development field while encouraging innovation in the medical device field.