Device deals--albeit fewer--are still getting done in the current environment, and many investors remain bullish on devices. A panel of venture investors--both VC and corporate--who are still active dealmakers, discuss what they want to see today in start-up companies, and whether the device investment model has changed both for now and the future.

This article first appeared in the March 2009 issue of Start-Up. The current economic crisis is hard on everyone, including investors and start-ups. But the news isn't all bad for medical device VCs. Those with capital will find the prices to be right in today's depressed economy. On the flip side, those venture firms without new funds or sufficient reserve capital will get penalized by declining valuations and punitive terms offered up by some new investors in their companies. Medical device companies, meanwhile, face tougher scrutiny from investors. During all this, both VCs and start-ups must answer new questions being posed by regulatory bodies, public investors, corporate acquirers, and potential customers.

Ever since the transformative success of interventional cardiology, the emergence of new interventional subspecialties seems to come at ever quicker paces. One of the latest clinical spaces to embrace the interventional revolution is pulmonology, which over the past couple of years has seen a host of new procedures and devices transforming traditional procedures. Indeed, the pace at which interventional cardiology evolved now seems almost leisurely compared with that at which interventional pulmonology companies are now moving. Thus, many of the companies in the space face an interesting dilemma: how to establish a foundation in this new specialty and, at the same time, how to refine that technology to keep pace with the field as it grows. That's the challenge facing superDimension, whose executives believe they own not just the road map, but the road itself.