While COVID-19 has slowed down economic activity across the country, Monogram has actually sped up. We recommended Monogram to you almost exactly a year ago. It makes “perfect-fit” hip implants that will be followed by “perfect-fit” knee replacements. Monogram’s technology will force doctors and patients alike to rethink implants. It will enable less cutting, less pain and much faster recovery. It’s going to make today’s practices seem barbaric by comparison.
To make this happen sooner rather than later, Monogram has gone on a hiring spree. It hired several engineers at the beginning of the year. One came from a competitor specializing in robotics. Another came from the biggest implant company in the country. They all want to be part of something great, says CEO and cofounder Benjamin Sexson. He says he has the best engineering team in the medtech space now.
And that’s not all. He’s also brought on five surgeons who will spearhead an intensive period of inhouse testing and help finalize the product.
Ben even has his next hire lined up. He’ll be the company’s VP of Sales. Makes sense. Once the product is ready for a large-scale commercial rollout, sales and marketing will have to step up.
Remember, this is medical equipment. It still needs FDA approval. And that process demands patience. But Ben is doing what he can to move things along. Monogram’s tech is on an “accelerated approval” track. But that doesn’t sidestep all the testing and validation required. Ben expects to get approval sometime in the second half of next year. In the meantime, Monogram is saving time (and money) by working with a medtech company that’s about to receive FDA approval for certain components that are also going into Monogram’s product.
It’s the kind of smart aggressive thinking that attracted me to the company in the first place (aside from the amazing technology).
So lots of progress is being made at the operational end. And before the year is out, Ben wants to be able to say the same thing on the fundraising side. He’s planning another raise. The one last year was a Series A round — the company ended up raising $14.6 million. This would be a Series B. And it’s going to be another crowdfunding campaign.
Ben really likes everything about crowdfunding (music to my ears!). He says he much prefers to work with crowdfunders — like you and me — than with professional VC types. And the playbook isn’t difficult to carry out. As Ben put it, “you can put a raise in place, nurse it, and at the same time continue to advance in terms of operational milestones which you then use to market the raise and lend it some real excitement.”
Ben expects to meet — and probably exceed — a series of important milestones next year. So launching another fundraising campaign toward the end of the year makes too much sense to pass up.
There’s something else that Ben is thinking a lot about these days — the company that will eventually buy Monogram. He’s already talking to some of these prospective companies. Having another successful crowdraise under his belt would enable him to engage in “we’d like to talk with you but don’t need your money” discussions. He doesn’t want to be the supplicant in those negotiations. And if his strategy goes as planned, he won’t be.
His preferred scenario is to “launch a successful fundraise, commercialize the technology and then lock up a buyer.” He says there are a few that are seriously interested in Monogram’s implant products.
I like what I’m hearing from Ben. But “fundraise, roll out product and sell to the highest bidder” is easier said than done. Especially with medtech. That said, the path is there. And crowdfunding is a critical piece that enables Monogram’s end-game strategy.
With VC participation, the path would look quite different. The money raised would probably be higher, but so would investor expectations. The rollout would be aggressively scaled to maximize adoption in the shortest time possible.
And that’s a double-edged sword.
It’s true that more value would be created more quickly. But profitability would be delayed. And the rapid increase in value could make Monogram unaffordable to some of the big buyers professing genuine interest in the company — an odd but very real price of success.
But let’s not get too far ahead of ourselves. The company isn’t. Monogram is laser-focused on getting its product to commercialization. And crowdfunders will be asked to fund the rollout of a product that will vastly improve the experience and outcome of implant patients. Exciting stuff.
This is precisely the kind of company where it pays to be early. First Stage Investor members who invested last year have reason to hope for big gains. And it looks like they’ll get a chance to double down on their initial investment. There’s much more to come. And I’ll keep you fully updated on future developments.