Welcome to the 114th edition of Deep Tech Catalyst, the educational channel from The Scenarionist where science meets venture!
This week, we explore one of the most persistent misunderstandings in MedTech company building: what happens when founders apply conventional startup logic to a sector where validation, regulation, commercialization, and financing are deeply overlapped from the very beginning.
I sat down with Jon Bergsteinsson, Founder & Managing Partner at LIFA Ventures, to unpack how an investor evaluates early-stage companies, why many founders ask the wrong questions at the start, and how the most credible companies align product development, go-to-market strategy, regulatory planning, and fundraising far earlier than most teams expect.
Key takeaways from the episode:
🏗️ Validation, Prototyping, Regulation, and Go-to-Market Must Evolve Together
In MedTech, these are not separate stages that can be handled one by one. The strongest companies build them as an interconnected system from the outset, rather than treating commercialization and scalability as downstream concerns.
📍 Go-to-Market Strategy Determines Regulatory Strategy
Regulatory planning should not be chosen in isolation or based only on geography. It should follow from a clear understanding of who the product is for, who will use it, who will pay for it, and how the company intends to enter the market.
🧪 Clinical Development Is Also a Capital Planning Exercise
Clinical studies are not only scientific milestones. They are budgeting and financing milestones as well. Timelines, sample sizes, and study design all shape capital needs, and founders often underestimate how early those assumptions need to be made.
💰 Fundraising in Medtech Should Be Framed Around De-Risking, Not Venture Labels
Rounds such as pre-seed, seed, or Series A often fail to describe what is actually happening in a medtech company. A clearer approach is to define each raise by the specific technical, clinical, regulatory, or commercial risks it is meant to remove.
📈 Scalability Begins with Early Commercial Signals
Revenue is not the only meaningful sign of traction. Buyer interest, pricing feedback, reimbursement logic, and early distributor conversations can all provide strong evidence that the company is building toward a real market rather than just a promising technology.
BEYOND THE CONVERSATION — STRATEGIC INSIGHTS FROM THE EPISODE
Market Validation is the First Real Milestone
In an early-stage MedTech, the first milestone is market validation. Before anything can scale, before capital can be deployed, and before a regulatory or commercial path can be chosen with confidence, there has to be evidence that the company is working on something real.
In the strongest cases, the company is not only trying to prove that something can work technically, but also that it should exist commercially.
This is the stage in which the earliest version of the company begins to take shape.
The goal is to determine whether the underlying assumptions are strong enough to justify further development. Without that foundation, every later step becomes more fragile.
Prototyping is a continuous process, not a single event
Once early validation begins to take form, prototyping becomes one of the key tools through which learning continues.
But it is important to understand prototyping correctly.
It is not something a team does once before moving neatly into the next phase. It is an ongoing process of refinement.
A common mistake is to treat the prototype as a one-off milestone, as though the company can build an initial version, freeze the design, and then simply move forward.
In reality, prototyping is iterative by nature. It evolves alongside the team’s understanding of the product, the user, the clinical context, and the commercial environment.
Each version should bring the company closer to a solution that is not only technically functional, but also viable in the broader sense required in the field.
That is why prototype readiness is such an important marker. It says less about completion than about progress. It reflects whether the company is moving through the right cycle of development, testing, and refinement.
Regulatory strategy needs to be a priority from the start
Regulatory strategy cannot be left until later. It has to enter the picture early, because it influences how the product is built and how the company prepares to bring it to market.
But regulatory thinking should not be approached as an isolated technical exercise. It belongs within the wider structure of the business.
The key point is that regulatory choices are not supposed to exist independently from the rest of the company’s direction.
They have consequences for how claims can be made, how products can be introduced, and which pathways become available. That makes early regulatory awareness essential, even before all answers are known.
At this stage, what matters most is not just knowing that regulation will be important, but understanding that it must be developed in relation to the company’s broader plan.
Go-to-market
One of the clearest mistakes early teams make is treating go-to-market strategy as something that can be solved later, once the product is more mature.
In reality, market access and commercialization logic belong near the beginning.
Founders need to understand who the buyer is, who the user is, how the product will be sold, what the pricing logic might look like, and how early commercial traction could eventually emerge.
This is not because every detail has to be fixed at the outset. It is because the company cannot make sound decisions in isolation.
Product development, regulatory direction, and commercialization planning all shape one another. A MedTech company that delays go-to-market thinking too long risks building technical progress on top of weak commercial assumptions.
The strongest early-stage teams begin asking these questions while they are still validating the problem and refining the product. That creates a more coherent path forward.
Funding and scalability must be planned as part of the same system
As the company develops, funding becomes one of the structural requirements that keeps every other part moving.
Founders must start thinking not only about what the company needs to build, but also about what kind of financing pathway can support that journey.
At the same time, scalability, distribution, and manufacturing cannot be treated as distant concerns that belong only to later stages. They are part of the architecture of the company from early on.
A business may not be ready to scale yet, but it still needs to understand what scaling would eventually require and what assumptions must hold true for distribution and sales to work.
This is why the company has to be built as an interconnected system.
Validation, prototype development, regulatory planning, go-to-market logic, funding needs, and scalability are not separate boxes to check one after another. They are linked parts of the same structure.
Why Go-to-Market Strategy Determines More Than Founders Think
Founders often speak about regulatory pathways as if they were mainly a matter of choosing between geographies or selecting the fastest technical route to approval.
But that framing misses the deeper issue. Regulatory direction only makes sense when it is rooted in a clear go-to-market plan.
The company first needs to know who it is building for, who will use the product, who will pay for it, and under what conditions adoption is likely to happen.
Without that clarity, regulatory planning becomes detached from the actual commercial reality the company is trying to enter. The risk is that the business chooses a pathway that may be technically valid, but commercially misaligned.
This is why commercial thinking has to begin early. It should happen at the same time as initial prototyping, market research, and early product definition.
The point is not to postpone regulation until later. The point is to avoid pretending that regulation can be designed correctly before the company understands how it intends to reach the market.
The go-to-market plan shapes every major decision
A strong go-to-market plan becomes the foundation on which many of the company’s core decisions are made.
Once the company knows the type of customer it is targeting, the intended buyer, and the type of user it wants to serve, it becomes much easier to determine how the product should be positioned and where it should be introduced first.
That clarity also affects the selection of countries, regions, and market segments.
A company should not decide to enter the United States or Europe simply because one regulatory route appears easier than another in the abstract.
It should decide where to go based on where the strongest commercial traction is likely to emerge. The regulatory pathway then follows from that decision, not the other way around.
This is a critical distinction because it reverses the logic many founders instinctively use.
The question is not which regulatory path looks most convenient. The question is where the company can build a real business. Once that is understood, the regulatory route becomes part of a coherent strategic picture rather than a standalone technical choice.
Early confidence in the buyer matters more than founders assume
At the center of all of this is a simple idea: founders need to become very confident, very early, about who they are selling to.
That confidence does not need to be based on perfect certainty, but it does need to be grounded in serious market understanding. Without that, the company is exposed at every level.
The product may be built with the wrong assumptions.
The regulatory plan may support claims that do not matter enough in the market. The commercialization strategy may arrive too late or fail to match the buying behavior of the intended customer.
In MedTech, these are not small corrections. They can alter the entire trajectory of the company.
That is why go-to-market strategy determines more than many founders initially think. It is not a downstream commercial layer added after the technical and regulatory work is done. It is one of the earliest strategic choices the company makes, and it influences nearly everything that follows.
Clinical Studies Takes Longer Than Founders Think
One of the most common mistakes in early-stage MedTech is underestimating timelines around clinical development.
Founders often assume that once they are technically ready to move into studies, progress will depend mainly on their own speed and execution.
In reality, that is rarely the case.
Clinical development is shaped by external approvals, third-party timelines, and institutional processes that the company does not fully control.
Even getting approval to run a study can take far longer than inexperienced teams expect. Ethics committees and other approval bodies introduce delays that are not necessarily predictable from the inside.
This means clinical planning cannot be treated as a simple extension of technical development. It has to be approached with the understanding that major parts of the timeline will be dictated by outside actors.
That matters because timing is never only an operational issue. It has direct implications for hiring, runway, fundraising, and company credibility.
Clinical work should not be the first real test
Another important point is that clinical development should not become the company’s first true testing ground.
Not every medtech company needs animal studies, and the development path varies depending on the type of product.
Some companies can do a great deal of their early work through bench testing, laboratory environments, and controlled preclinical validation.
But the broader principle remains the same: the stronger companies tend to arrive at clinical studies only after they have already done meaningful scientific and technical work.
There is a clear preference for companies that have built a strong base of laboratory testing before moving into first-in-human work.
When founders can show that they have already explored the solution thoroughly in controlled settings, it signals a more disciplined development process.
It suggests that the company has taken the time to think through methods, technical assumptions, and performance expectations before exposing the product to the complexity of clinical reality.
If a company uses clinical testing as its first serious attempt to understand whether the product works, the risk of poor outcomes rises significantly.
Study design and financing strategy are inseparable
Clinical development becomes a capital planning exercise as well.
A company cannot build a credible fundraising strategy if it does not know what its studies are likely to cost, how long they are likely to take, and what the major cost drivers will be.
The more serious founders understand that study planning and financial planning have to evolve together. If the company is preparing to raise capital, it needs to be able to explain not only why a clinical study matters, but how much it will cost to run it and what that capital will actually de-risk.
That level of specificity becomes especially important in MedTech because investors are not just evaluating the science. They are evaluating whether the company has a realistic development plan. A vague understanding of clinical costs can weaken the whole investment case.
Early conversations with experienced partners improve realism
This is also why early engagement with experienced CROs and other specialized partners can be so valuable.
Organizations that work regularly on MedTech studies often have a practical view of timelines, cost ranges, and operational requirements. They can help founders move from abstract assumptions to more realistic planning.
These conversations matter well before the company is fully ready to launch a study.
By speaking with experienced operators early, founders can get a better sense of what it will actually take to move from one stage to the next. That improves both internal planning and external communication with investors.
In that sense, clinical development is not just a technical progression toward validation.
It is one of the main places where strategic planning, operational realism, and capital discipline come together. The companies that understand this early are usually much better positioned to build an investable path forward.
Fundraising in Medtech Should Follow De-Risking Logic
One of the reasons many MedTech companies struggle with fundraising is that they present themselves through a framework that does not fit the actual nature of the business.
Founders often anchor their company to conventional venture labels such as pre-seed, seed, bridge, or Series A, as if those categories naturally explain what stage the company has reached. In MedTech, that picture is often misleading.
The development path of a company does not unfold in the same way as a software startup or a more conventional venture-backed business.
The company moves through stages that are defined less by generic financing labels and more by technical, clinical, regulatory, and commercial milestones. Trying to force that progression into the standard language of venture rounds can create confusion rather than clarity.
That confusion matters because investors are trying to understand where risk still sits in the company. If the company describes itself in language that says little about what has actually been achieved, the fundraising story becomes weaker from the outset.
A MedTech round should be defined by what it is meant to de-risk
A more useful way to think about fundraising is to define each round according to the specific company risks it is intended to remove.
In practice, MedTech companies move through a sequence that might begin with prototyping and early technical validation, then move into early clinical validation, regulatory progress, market validation, commercialization, and eventually scalability.
When a round is framed in those terms, the logic becomes easier to understand.
Instead of saying the company is raising a seed round, it may be more meaningful to say that it is raising a regulatory round, or a round to complete early clinical validation.
That immediately gives investors a clearer picture of what capital is being used for and what the company expects to achieve before the next financing event.
The point is not just to rename rounds for the sake of presentation. It is to communicate the true structure of company development.
Every financing round is, in effect, meant to de-risk a particular set of unknowns. The more clearly that is articulated, the more coherent the company appears.
The right amount of capital depends on the next real milestone
This way of thinking also changes how founders should approach round size. In theory, every company would prefer to raise a very large amount of capital at once and then move forward without constant fundraising pressure.
But in reality, investors commit capital based on what has already been de-risked and what they believe the next tranche of funding can credibly accomplish.
That means round size should not be determined by generic expectations about what a company at a certain “stage” is supposed to raise.
It should be determined by what the business needs in order to reach the next meaningful milestone.
If the company needs a certain amount of capital to complete a defined regulatory process, or to reach a specific validation point, then the amount raised should be tied directly to that objective.
There is no automatic rule that each round must simply be larger than the previous one.
Often they do increase over time, because the company is taking on larger and more expensive de-risking steps as it progresses. But the increase only makes sense when it reflects the actual cost of moving the company forward in a credible way.
Medtech funding paths are usually more segmented than founders expect
Another important implication is that medtech companies often need more financing rounds than founders initially assume.
It is not unusual for a company to go through four or five rounds before it reaches the point where sales begin to scale meaningfully. Some will go through even more.
That should not be seen as a weakness in itself. It reflects the reality that the path to market in MedTech is staged, capital intensive, and dependent on multiple layers of validation.
Early rounds may be relatively small, focused on very specific technical or clinical milestones. Later rounds tend to become larger as the company moves toward regulatory approval, commercialization, and scale.
Seen through that lens, fundraising becomes much more logical. The company is not trying to fit itself into a venture template borrowed from another sector. It is building a financing strategy that reflects the actual sequence of development in MedTech.
Investors respond better when the story matches the company
Ultimately, the fundraising narrative becomes stronger when it mirrors the real progression of the business.
VCs respond more clearly to a story in which each round is tied to a defined purpose, each use of capital corresponds to a real de-risking step, and each milestone makes the next stage of the company more credible.
For MedTech founders, this is an important shift in mindset. The goal is not to sound like a standard venture-backed startup. The goal is to present the company in a way that reflects what development process actually looks like.
When the financing story is aligned with that reality, fundraising becomes easier to understand and, in many cases, easier to support.
Scalable Medtech Companies Are Built Around Early Commercial Signals
Validation is not only about revenue
One of the most important things founders can understand early is that commercial validation does not begin only once revenue appears.
In MedTech, some of the strongest early signals come before sales. What matters is whether the market is already showing credible signs that it would be willing to adopt the product if the company succeeds in delivering it.
That can take the form of written interest from buyers, confirmation from payers that they would consider purchasing the product under defined conditions, or early feedback around acceptable pricing ranges.
These signals matter because they show that the company is not operating in a vacuum. They indicate that someone on the market side is already willing to engage seriously with the proposition.
From an investor’s perspective, this kind of traction is meaningful even before commercial launch.
It does not replace revenue, but it helps validate that a payer exists, that the buying logic may be real, and that the company is building toward a market with actual demand behind it.
Reimbursement can define whether the business is viable
Reimbursement strategy is another area where early thinking matters far more than many founders initially assume. In some cases, it can shape the viability of the entire business model.
If there is no reimbursement code available for the product, the company may face a serious structural problem.
Creating a new code can take years, and not every startup has the time or capital required to absorb that delay.
This means reimbursement cannot be treated as something to solve once the product is ready. It has to be part of the company’s early commercial logic.
Distribution only works if the economics support it
Distribution strategy is equally important, but there is no universal answer. Whether distributors make sense depends heavily on the type of product, the margins available, and the markets the company is trying to enter.
If a distributor is taking 20 to 30 percent of revenue, the economics of the product need to be strong enough to support that structure.
A high-margin product may be well suited to that model. A lower-margin one may not.
That is why distribution cannot be evaluated in isolation. It has to be considered in relation to product economics and overall commercial design.
At the same time, early discussions with distributors can still be valuable even before launch.
They may not generate immediate revenue, but they can serve as another form of market validation.
They can indicate whether there is appetite in the channel, whether external sales teams can imagine supporting the product, and whether the company’s vision makes sense in the context of real market infrastructure.
Geography and manufacturing shape the commercial model
The right distribution strategy also depends on geography.
In the United States, some companies may favor direct sales, while others may prefer distributors.
In Europe, the picture often becomes more complex because of language barriers, currency differences, and local regulatory realities that can make distributor involvement more important.
Manufacturing adds another layer to the equation.
Some products can be manufactured flexibly in multiple places and therefore support a broader range of distribution setups.
Others depend on very specific production capabilities in a limited number of locations. In those cases, the structure of manufacturing can directly affect how the company distributes the product and what kind of commercial arrangements are realistic.
This is why there is no single formula that applies across MedTech. The right model depends on the specific product, its margins, its manufacturing constraints, and the markets being targeted.
Scalable companies are built by testing commercial reality early
Taken together, these elements point to a broader principle. Scalable MedTech companies are not built by focusing only on technology in the early stages and leaving commercial design for later. They are built by testing commercial reality as early as possible.
That means looking for credible buyer signals, understanding reimbursement constraints, exploring distribution dynamics, and thinking through manufacturing and sales as interconnected parts of the same business.
Not every early conversation will lead to immediate traction, and not every hypothesis will hold. But from an investor’s perspective, these efforts are important because they show that the company is not only developing a product. It is learning how that product can actually become a business.
