Ask a room full of medtech founders when they plan to sell their company and you usually hear some version of “get through regulatory, launch the product, and then exit.” 

It sounds sensible—regulatory approval is hard and launch feels like a finish line. Many teams assume valuation peaks at that moment. It rarely works that way.

Recently, we reviewed what happened to 75 startup programs where StarFish Medical played a substantial role. These were not hypothetical models or pitch-deck narratives. They were real companies building real, new-to-the-world devices, navigating regulatory strategies, reimbursement realities, and figuring out product-market fits. In particular, we looked at the 28 companies (38%) that have achieved an exit so far.

To our surprise, none of the companies in this data set exited at launch, directly contradicting the common stereotype. Perhaps the closest was a company called Hemosonics, which sold to a French company after achieving regulatory clearance, but they still didn’t launch or build a commercial team. 

So how should a startup team plan its ultimate conclusion? We hoped the outcomes might help shed some light on this essential question. To make sense of the outcomes, we divided the exits into three categories: pre-commercial exits, public listings, and commercial-stage exits.  

Public Listing

Ten companies (13%) chose the public listing route. Some did so at an early development stage. Two didn’t survive. Of the other eight, their average current value is $156 million. Two subsequently exited again; two are still pre-commercial.  

One example was a company called HD+, now Outset Medical, which had a dream of home-based nocturnal hemodialysis. They brought together a large market need, compelling technology solution, and clever ideas about human factors. They launched with in-center dialysis, and now, over 20 years after their start, they are moving into the home. 

Another example is Inogen, a pioneer in wearable oxygen concentrators. They launched their first product in 2004, which was immediately successful and spawned an industry category. Ten years later, well into their commercial phase, they did their IPO on NASDAQ. Their market capitalization peaked at $6 billion in 2018, but has since subsided to under $300 million. Depending on when the founders got out of the stock, they might have done very well.

Novadaq did an IPO in 2005 at a pre-commercial stage. They launched their SPY imager a few years later. (More about them later.)

The public route was a viable path for some companies. Anecdotally, they didn’t all find being public at an immature stage helped with access to capital, and being public didn’t prevent some failures. What about those that decided to sell early?

Pre-Commercial Exit

Eleven companies (15%) exited at pre-commercial stages. Some had strong financial outcomes. They tended to fit particular criteria, solving big problems in large markets with diverse buyers.

There were a few outliers. Two were drug delivery plays focused on particular indications, and sold to pharma companies. One was a build-to-buy deal in cancer therapeutics, which sold to a robotics company prior to clinical trials. Two were asset sales where the company elected not to proceed with their business plan.

The remaining six companies are of particular interest. They chose to sell prior to achieving commercial valuations.

Apama Medical is an interesting case in point. In 2017, the company sold to Boston Scientific for $175 million upfront, plus possible milestone payments. This company was crafted around addressing a huge, underserved market, namely atrial fibrillation therapy, with a differentiated solution. The venture was also selected and designed specifically by its founder, Amr Salahieh, already an experienced expert in the rapidly evolving field of interventional cardiology, for a pre-commercial exit.

Atreo Medical, on the other extreme, was a student project. Four students from McMaster University in Hamilton, Ontario, came up with a prototype CPR trainer and managed to sell it to Medtronic Physio Control for millions of dollars. It was kind of an acqui-hire and the numbers were small, but for four engineering students it was a great outcome. Sometimes the magnitude of a good exit is in the eyes of the beholder.

Chestmaster was another interesting example. A farmer in Alberta, Canada, came up with a prototype wearable percussion vest for cystic fibrosis (CF) sufferers, such as himself. CF is a rare disease that makes the economics difficult. Luckily, Hillrom took it on and released a commercial product called the Monarch. The dollars weren’t large, but the impact was large for patients. The farmer, Maarten De Vlieger, died from his condition last year. Not all good exits are financial wins.

One company came up with a laser-based ophthalmic surgery device that they sold at the pre-clinical stage. The economics were very good, based on the uniqueness of the technology and the large market it addressed, with an enhanced safety profile relative to the current state of the art, and a saturated market with companies looking for advantages to play. 

For this set of seven companies, the average outcome was $55 million. The stronger ones in the set were over $100 million. In each case of those high value pre-commercial exits, there was a large market, a unique solution, and a range of possible buyers.

The big question we were interested in was whether it’s worth it to take a company to a commercial stage.  

Commercial Stage

We tracked eight companies (10%) that carried their companies forward to the commercial stage and then achieved an exit. The outcomes were much larger.  

One example is LumiThera, which was recently acquired by Alcon for $132 million for its photobiomodulation-based macular degeneration therapy. They had been selling for a few years and built enough clinical and commercial interest to attract a major strategic company. They were also formal about their clinical trial approach, which was cited in the acquisition press release. 

The largest one we have worked on was MiniMed, an early pioneer in insulin pumps, under the legendary Alfred Mann. Medtronic acquired MiniMed in 2001 for $3.7 billion. In a sign of everything old being new again, it was announced last year MiniMed would be spun out as an independent public company.

Another interesting example is Novadaq, previously mentioned, which commercialized fluorescence technology to visualize blood flow. They had dramatic success in their first year, partly aided by recent reimbursement changes. After building an initial market in skin graft surgery monitoring and expanding into endoscopy indications, they were able to sell to Stryker for over $700 million.

The companies in this group of eight sold for much more, with an average transaction value of $580 million. It seems that those companies were richly rewarded for taking their companies to the commercial stage to increase their attractiveness. By demonstrating commercial viability and reducing risk for their acquirers, their shareholders did very well. 

Based on our somewhat biased view of the startup market, we can observe a few outcomes, and if I may, add some editorial commentary.

The chances of an exit are not bad. We tracked 38% of our recent startup clients to either a public listing, a pre-commercial exit, or a commercial-stage exit. My guess is that this number will rise to over 50% over time as more companies reach investor outcomes.

A pre-commercial exit is possible, however the only strong ones we tracked had huge markets, competitive buyer pressures, and strong, differentiated solutions. In one case, they did a build-to-buy deal balancing risk and reward for both parties. When those conditions were absent, pre-commercial exits were typically modest. The deals were structured as asset sales, technology tuck-ins, or acqui-hires that returned limited capital with not much upside for founders and investors.

Any company that tells investors it intends to exit on commercialization should consider fallback options. Our data doesn’t support this as a viable path in medtech.

The public listing path does exist. The strong, standalone public companies we tracked seemed to be strong before they went public. They did not go public as a way to attract speculative capital to their early-stage startup—Novadaq being a notable exception.

The data supports a robust exit path for commercial stage startups. The largest exits, averaging hundreds of millions of dollars, came from companies that built real businesses before selling. These transactions were consistently multiple times larger than pre-commercial exits. Acquirers generally prefer to buy accretive opportunities for near term profit, and can justify paying more for them.

Why Are Commercial-Stage Exits Larger?

Public medtech companies allocate capital under constant internal competition. Every division pitches their corporate treasury for investment dollars. The projects that win are those that can demonstrate near-term, accretive value with less risk. Commercial companies make that case more easily. Margins are visible. Demand is demonstrated. Manufacturing risk is understood. Regulatory and reimbursement uncertainties have largely surfaced.

There is also an organizational dimension that is easy to overlook. Commercial companies come with teams, processes, and operating rhythms that acquirers recognize. Forecasts are grounded in real sales behavior. Manufacturing issues are no longer hypothetical. Regulatory and quality systems are lived, not planned. Demonstrated manufacturing control, in particular, reduces integration risk and removes a common valuation discount. 

Early commercialization is often treated as a sales and manufacturing problem—it’s a market discovery phase for a new-to-the-world device. Teams are learning who actually buys, why they buy, and how they use the devices. Beachhead markets matter more than broad positioning. Key opinion leader support matters as much as volume. Early revenue is less about scale and more about reducing uncertainty. We often advise companies to worry less about margin on launch and double down on it later.

Choosing to commercialize is choosing to build a different company. Leadership needs to evolve and capital requirements need to increase. Organizational complexity rises, but it also creates optionality.

A company that can sell for $20 million at launch may be able to sell for several hundred million after proving commercial viability, but only if it invests intentionally in product quality, manufacturability, and margin. That trade-off needs to be understood early, not discovered late.

The core lesson from reviewing these outcomes is simple: If you want a big exit, launch is not the finish line. It is a gate.

Value accrues to companies that move beyond it with discipline, clarity, and enough commercial evidence to change how buyers perceive risk. Not every company should take that path, but every company should understand what it costs, what it enables, and why the payoff, when it comes, can be much larger.

MORE FROM STARFISH MEDICAL: How Medtech Startups Should Use Prototype Builds to Prepare for Market

Scott Phillips earned a degree in engineering physics from the University of British Columbia. Before starting StarFish Medical, he worked in such areas as lithium battery development, UV spectroscopy instrumentation, and hi-fi audio speakers. Under his leadership, StarFish has grown into a diverse organization with worldwide clients and 100% focus on medtech.