AUGUST 20249capital investment to commercialize superior solutions. As witnessed in the crash of the 2000 dot-com bubble and the 2008 global financial crisis, durable early-stage investors will be critical to supporting and investing in these innovators and entrepreneurs through a challenging period. While the volume of early-stage venture investments industry-wide may temporarily dip, the road to a new golden age of medical innovation and healthcare progress will be paved for innovators that can stay the course and focus efforts on improving clinical outcomes and addressing large-volume medical reimbursements where incumbent standard of care devices are under serving patients, providers and payers. As a co-founder and investor of innovative life sciences companies, I challenge you to see the higher innovation cost of capital not as a regression from the capital abundance and venture growth of the 2010s, but rather a re-focusing on what matters most, namely the development of quality products that tackle big challenges facing humanity and deliver healthcare solutions for people's urgent and unmet needs. Despite the higher bar for raising venture capital for entrepreneurs and the softened return expectations for venture fund managers, our firm believes that the broader decade ahead is filled with opportunity to create category defining medical technology companies that improves standard of care for patients in broad indication segments, including but not limited to respiratory health, surgical outcomes, oncology care, women's health, and gastrointestinal health sectors. In this period of reduced valuation multiples and lowered market return expectations, the alpha of superior actively managed venture capital funds and savvy entrepreneurs developing ground breaking technology will be more clearly recognizable compared to past years of abundant low-cost capital and market exuberance. Increased cost of capital will force founders to be more disciplined, practice lean start-up fundamentals and thoughtfully plan longer-term budgets for major R&D expenditures, go-to-market strategies, and commercialization milestones. This is not a new paradigm for the medical devices sector relative to the biotechnology or healthcare IT sectors, thus providing an exploitable advantage for experienced medical device founders and start-up companies to outperform their peers in other innovation verticals in this higher cost of capital economic environment. For regulatory agencies and clinical testing programs worldwide, reduced volume in each medical device segment allows for increased focus and resources for each funded program, resulting coordination between agencies and investigators and better funded clinical studies per program. While the total aggregate market value of medical device startups may contract over the year ahead, we expect the design quality, product-market fit and commercialization success rate of new medical devices to improve over the decade ahead. The increased cost of capital will constrain number of venture funded medical devices at each funding stage; however, I believe dedicated technologists will not be deterred and coordinate to band together behind the best projects in our ecosystem to solve the most urgent and unmet problems in healthcare. My firm, General Inception, is doubling down on medical device innovation with a longer-term outlook and focusing on company-creation fundamentals to support scientists and engineers to tackle our world's big problems. As an institutional co-founder, General Inception brings together domain expertise, executive talent, infrastructure resources, and capital to nurture and scale growth throughout the entire company journey, supporting our founders to face the challenges that will present in this longer-term outlook. Increased cost of capital will force founders to be more disciplined, practice lean start-up fundamentals and thoughtfully plan longer-term budgets for major R&D expenditures, go-to-market strategies, and commercialization milestones
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