Brian Brockway is the founder of Data Sciences Intl. (DSI), the leading provider of wireless implantable sensors and systems for preclinical testing of new drugs and biomedical research. He bootstrapped DSI with SBIR grants into a highly profitable business with over $40 million in revenue where he developed domestic and international direct sales and distribution network serving 40 countries on five continents. Brian was named to the Inc. 500 list of America’s fastest growing private companies for three consecutive years and was named SBA Exporter of the Year 1994 and Tibbetts Award winner 1997. DSI itself received several awards and recognition for technology innovation and creative financing strategies during Brian’s tenure.
Brian has about 80 patents issued and pending in medical devices, sensors, and diagnostics and is co-author of more than 25 scientific publications.
What does VivaQuant do and why is it important?
VivaQuant is a digital health company with proprietary electrocardiogram (ECG) processing and artificial intelligence algorithms for extracting diagnostic information from the ECG. Its FDA-cleared RX-1 remote cardiac monitoring system is setting a new standard for accuracy, speed, and efficiency of rhythm abnormality detection for patients that require ambulatory heart rhythm monitoring. The on-board algorithms in RX-1 identify abnormal heart beats including premature ventricular contractions (PVC) and atrial fibrillation detection, long battery life (>2 weeks), and excellent ECG clarity. Patients wear the RX-1 for up to 30 days while going about their normal activities. RX-1 detects rhythm abnormalities and forwards those to our Medicare-certified monitoring center in Plymouth, MN via the on-board cellular connection to the cloud. The monitoring center reviews incoming ECG strips and reports clinically important findings to the patient’s physician. The detection accuracy and ECG signal clarity provided by RX-1 enables a large reduction in labor required to review and report arrhythmia findings from monitored patients, reducing the overall cost of monitoring. VivaQuant is currently in a limited launch of its RX-1 system.
How did the company start?
VivaQuant was founded in 2009 by Dr. Marina Brockway. Her experience with helping her mother with a cardiac arrhythmia monitor opened her eyes to the obstacles and frustration that older people experience when operating these devices and the poor-quality signals they provide. Further research showed that her mother was not an isolated case. This motivated her to identify new technology to remove noise from ECGs and more accurately detect abnormalities, enabling a patient-friendly wearable device targeted at improving quality and reducing costs.
What is your go-to-market strategy?
We are providing arrhythmia services under a partnering (client bill) model where clinics and hospitals contract with us to provide review and reporting services at our US-based monitoring center. This allows us to leverage the efficiencies of our technology and use the price we charge clinics and hospitals as a differentiator to capture market share. We currently have one independent sales rep engaged during our limited launch and will expand following completion of limited launch.
What is MNVest and why is VivaQuant using it to raise capital?
MNVest is a way for Minnesota businesses to legally raise growth capital through crowdfunding by selling equity to Minnesota residents through an internet-based portal.
Our decision to use MNVest came after reviewing options for raising capital several months ago. We extensively reviewed the pros and cons of VC, angel, and various crowdfunding exemptions. The size of this round was too small for VC, plus we prefer to have investors and employees to each hold the same class of stock. After evaluating various approaches, we thought equity crowdfunding (CF) was our best option. The statistics indicated that the success rate for equity CF was better than VC or angel with CF at about 50% vs. 20% for angel and < 10% for VC. Plus, dollars raised with equity CF is strongly trending upwards, indicating a growing awareness and acceptance. Nationwide, capital raised through equity CF increased from $466 million in 2016 to $1.4 billion in 2017 compared to $14.1 billion for VC and $9.8 billion for angel. This is impressive growth, especially given that the typical CF round is much smaller than VC and angel rounds. We also had some comfort with MNVest in that Zach Robins of Messerli Kramer and Dave Duccini of Silicon Prairie were working with us, two veterans of MNVest equity crowdfunding.
Despite the broad success achieved by high-tech firms across the U.S. with using equity CF to raise capital, we had some concern that MNVest had not been tried by a medtech firm. After careful consideration, we thought this was still a good option for us. Because the cost of setting up a MNVest offering is quite reasonable, we felt that with our track record, there would be good support for our MNVest offering. The PR surrounding the offering will raise awareness of VivaQuant in the community, which will be an asset for recruiting down the road. Investments in small medtech firms have created a lot of wealth in our community, so there is a lot of familiarity with the returns these companies can provide. Minnesotans have a lot of pride and support for homegrown medtech firms and want to see them succeed.
How much are you raising and what will the capital be used to accomplish?
We are targeting a $500K raise. This capital, combined with existing cash flow, will take us through limited launch, initial scale-up, and initiate development of the next generation product.
If other companies were considering MNVest, what should they do to prepare?
Plan carefully to determine if MNVest is a good match for your situation
Confirm that the amount of money you want to raise aligns with what can be raised with MNVest
Talk with experts about your long-term capital needs to determine if using MNVest now is consistent with your future capital needs and confirm that you are managing your cap table appropriately
Work with an attorney familiar with MNVest
Be aware that since equity crowdfunding/MNVest is new, and there is a lack of familiarity with it, it will require extra time educating and communicating to get some people comfortable with the idea