Raising money for a medical device startup can be incredibly challenging, but serial entrepreneur Michael Berman financed his latest venture MikrobEX in a rather clever fashion.
He wanted to raise $5 million and also take advantage of the Minnesota Angel Investment Tax Credit program. But the angel program puts a cap on the amount of money a company can raise and still be considered a qualified business for investors to receive the credit. That amount is $4 million.
So Berman and his two co-founders drew up investor documents such that once the state returns 25 percent of the money invested to the angels, each of them would plow that money back into MicrobEX. Berman closed the round in October where he raised $4 million and the remaining $1 million will come over the course of the year as the state starts making payments.
With the Rise of AI, What IP Disputes in Healthcare Are Likely to Emerge?
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
This unusual negotiation strategy was likely helped by Berman’s track record. He was a co-founder of Velocimed which St. Jude Medical bought for $74 million in 2005; a board member at Lutonix, which was sold to C.R. Bard for $225 million late last year; and president of Boston Scientific’s Cardiology business between 1995 and 2000.
Berman is also involved as either a co-founder and/or an investor and board member at 10 startups currently.
