Holland, MI-based Genesis Innovation Group announced early this month that it has raised $1.1 million in capital to invest in new medical device technologies. Since its 2013 inception, Genesis has raised a total of $2.3 million.
Genesis is not a traditional venture capital firm, says co-founder and CEO Rob Ball. Instead, it’s a consulting group consisting of engineers, accredited private investors, and industry professionals with “deep experience in the medical device space” that also invests in the companies it consults with.
Ball says Genesis is primarily interested in early-stage device startups with needs the group can help with, such as product development, distribution, and marketing.
“We’re looking for companies with demonstrated proof of a solution to a known problem,” Ball says. “If that’s been met, we assess if the talent associated with Genesis is the right talent to help move the company forward. After that, we consider an investment. We’re usually seeking an equity position and meaningful influence.”
The organization’s impetus was a void in the ecosystem, Ball says. “We realized there was a real need in the industry because large medical device companies are focused on distribution, not innovating new products.” Genesis could carve out a niche by concentrating on developing early-stage technologies and then leveraging its network to sell or license them to more mature organizations, he explains.
Ball says the 20-person Genesis team is currently engaged with six portfolio companies and is “administratively operating” at least two: Shoulder Innovations and Magnesium Development Company.
“We invested in Shoulder Innovations as any other VC firm might,” Ball says. “We invested cash and acquired equity with that cash. We also brought in a group with a lot of experience and managed the company to its success.”
Regarding the current state of Michigan’s medical device industry, Ball says there’s “a lot of talent here, and a modest number of great opportunities to invest in. There’s a lack of meaningful capital and, generally, what’s available is more conservative than early-stage medical device startups require. My sense is that access to capital for regulated industries is less fluid.”
Despite the risk-averse local investing culture, Ball says Genesis tries to avoid seeking backers from outside Michigan. However, he says his group sometimes works with entities in Ohio and Indiana. “We have a Midwest focus,” he adds.
Genesis will use its new capital to make additional investments in portfolio companies and add staff with financial and regulatory expertise. The organization is also in the process of establishing a more conventional VC fund called Cultivate MD, Ball says. It hopes to raise $10 million between now and the end of the year.
