Jack Dorsey received quite a bit of attention when he was recently announced as CEO of Twitter. Why? Because that made him CEO of 2 of the most rapidly-growing tech. companies in Silicon Valley at the same – Twitter and Square. Well, medtech’s version of Jack Dorsey might be Duke Rohlen. Duke led FoxHollow Technologies...[read more]
Jack Dorsey received quite a bit of attention when he was recently announced as CEO of Twitter. Why? Because that made him CEO of 2 of the most rapidly-growing tech. companies in Silicon Valley at the same – Twitter and Square. Well, medtech’s version of Jack Dorsey might be Duke Rohlen. Duke led FoxHollow Technologies...[read more]
Scott Nelson: 0:08
Welcome to Med Cider, where you can learn from experienced medical device and med tech experts through uncut and unedited interviews. Now here's your host, Scott Nelson. Hey there, ladies and gents, just a few quick messages before we get started with this interview. First. If you're a fan of this podcast, have enjoyed listening to the episodes over the past five or six years. Please do me a favor and go to the APP store and write a short review. It's a relatively simple thing to Dio, but it helps out a ton in terms of increasing the visibility of the med cider podcast. Please do me a favor and do that when you get a chance. Second item on the list is in regards to podcast players. Now, if you're listening to this podcast on the native app on your iPhone, I would definitely encourage you to check out a different player. There's quite a few available. I personally am a fan of overcast for a number of different reasons, but allows me to listen to podcast various speeds along with a lot of other features and overcast is a paid app, but it's well worth it. Believe me. So check out overcast or any of the podcast players that are currently available. Third item before we get started is in regards to the audio quality. Now this this upcoming interview is with Duke Rolling, and it's really, really good. Duke is a fantastic med tech entrepreneur, and he's got a ton of valuable insights to share. But the 1st 20 minutes or so, we ran into some slight audio difficulties. So just bear with us while we get into the conversation. It'll be well worth it now, in regards to that, here are some of the topics of questions that Duke and I are gonna cover for how Duke and his team at sea. The ingenuity celebrated after selling a comedian for approximately $300 million. Why the CVI ingenuity team pursued a US only strategy, which is contrary to what most early stage med tech companies do these days. Duke's previous relationships with the leadership that E V three, which is now part of Medtronic, and why those relationships were critical to closing the CVI ingenuity deal with Covidien. How Duke secured a really unique $300 million collaboration with Merc while serving as president of Fox Hollow Technologies and the major lessons Duke has learned raising money for four different early stage medical device companies. There's a host of other things that we get into during this conversation, but again, bear with us through the first, maybe 20 minutes or so. It will be well worth it. All right, So without further ado, here's Duke. Hello, everyone. It's Scott Nelson and welcome to another edition of Med Cider, the place where I interview proven MedTech thought leaders and other health care industry experts. And on today's program, we've got Duke Rollo Lean. And before we get into the conversation with Duke, let me provide a little bit of information in regards to his background. Currently, Duke serves as the chairman and CEO of Spy Rocks, as well as chairman and CEO of Advanced Cardiac Therapeutics. He's he's running both companies, which will certainly get into later on in the conversation here, prior to spy Rocks in Advance Cardiac Therapeutics, Duke served as the founder and CEO of CVI Ingenuity, which he sold to Comedian, which is now Medtronic, back in 2013 for approximately $300 million before founding CV ingenuity He spent some time at Fox Hollow Technologies, eventually becoming president took that company through an I P. O and eventually sold it to 83 which is also now part of Medtronic as well for a roughly about $100 million. And it was back in 2008 Duke received his MBA from Harvard and his B A from Stanford University. So he's got perspective from both coasts without further due Duke. Welcome to the program. I appreciate you coming on,
Duke Rohlen: 3:36
thank you very much.
Scott Nelson: 3:38
Let's start with a couple of your past exits with CB ingenuity and then Fox Hollow. And then we'll kind of fast forward to the president with spy rocks and Advanced cardiac therapeutics. But with see the ingenuity I mentioned in the intro here that you sold it to Comedian back in 2013 for roughly about $300 million raised about 30 million and venture capital so huge when from anyone's perspective, and so if you think about when you got that deal done, you know all the due diligence was was finished. Board and investors have signed off. Do you remember how you celebrated that win with your team.
Duke Rohlen: 4:10
It was sort of a bittersweet moment for us because we had a bunch of employees that were really committed to growing this company for the long run and the engine was there. So I think people were actually surprised that we had decided to pull the trigger, even though the exit value was high and the return on equity was high. I think there was a bittersweet moment where this family that we created and it was a small family that worked exceedingly, how we were able to move the company forward with such a small amount of capital. That family was, I think, going through excitement and the concept of monetizing an asset quickly, but also a little bit of trepidation about what happens next and potentially. The separation anxiety with Standing Way did have that meeting at the company. And then we went out. We celebrated with a bunch of models of Duckhorn, which is the wine that cavity in used as the code name for our deal. So it ended up being great, obviously, but there was a lot of there's a
Scott Nelson: 5:19
Duke Rohlen: 5:20
Scott Nelson: 5:23
that's cool. I love the story about Duckhorn. I think in my in my time at committing. I do believe I remember hearing that name and did not realize what it was. Four. So that's a good story Before we get into some of the some of the strategies that you guys employed in that in that successful exit, I want to ask you a question about the kind of a bittersweet moment. Is that something that you see more often than not in your experience in early stage med tech companies?
Duke Rohlen: 5:46
Yeah, just being galvanized, the whole engine being galvanized around doing something big and lofty, creating something that Azriel meeting. And these companies that get sold are sold because the acquires see that there is a tremendous opportunity not only with technology but with team, so they want boat. But when you do that, when you've created this engine of feeling of confidence and capability, there's worry about, you know, turning it over, doesn't you know, to somebody else and letting them affect the outcome of that company? There's concerns about you know the way that senior management of my company's run that versus senior management of some other company. There's an unknown there that's concerning and there's just inherent to transition. There's there's fear, right? And so these people end up feeling like, Gosh, I really liked what we had going with this small company. Am I gonna still like that when I'm part of the bigger company? When this deal this deal transactions close, so there definitely is, and I think that nobody part of a great company feels great, no matter what the price tag that you're getting for the company. Is everything totally great about turning it over to somebody else?
Scott Nelson: 7:02
That's an interesting point. I was just going to ask you about that. I almost wonder if it's a sign of a really great culture and a lot of really good progress if everyone kind of on the team describes their feelings, that sort of bittersweet. So, yeah, interesting that you make that comment. I
Duke Rohlen: 7:15
think that you know the way that I think families work of the way that friends work with companies working too transparent as a company get bigger a lot of times transparency getting shut down because bureaucracy starts infiltrating an organization unnecessarily right, you need to basically have the right amount of bureaucracy and hunger for a big company scale. But the companies that I've run have had incredible transparency. Where everybody knows what we're doing, everybody feels bought into a vision. And so when you when you start thinking about going to another company that's not have that, I think that there's a lot of there's a lot of concerns. Transparency to me is our culture. Culture is the people, and that starts with me, obviously, and that goes for everybody. And I think that there's transparency and that makes people feel good about great things and also collectively unified around solving the problems of challenging People enjoy being empowered. And that's what culture concerned about that going away with.
Scott Nelson: 8:17
It seems like you read so much about culture, especially within, you know, start ups these days. I mean, you're you're in the heart of Silicon Valley there so easy to read, you know, and maybe understand at a high level, but much more difficult, distorted, ingrained within a culture and company. So that's cool that clearly, obviously you've been ableto do that with that with the companies that you've loved, so appreciate you mentioning that, let's get on to some of the strategies that you employ because, like I said before, you know, you raised a pretty light amount of capital and eventually sold CV ingenuity for roughly $3 million to comedian. You know, that wasn't just luck. Luck of the draw or maybe good timing. You know, certainly Maybe some of that. But is there a few strategies that you can think about that really know, Maybe propelled you to another level faster, and maybe one of those is. But I'm thinking of is, you know, doing research for our interview Now is that you really focused on a U. S. Only strategy from the very beginning versus any you only strategy of Europe only strategy which I think is unique, especially for the era. The Mets. I care that we're in right now.
Duke Rohlen: 9:14
It all comes down to making the vector towards value creation and straight and focused as possible. And so from inception, have toe say OK, the market big enough. The company could actually be a company Or are you building this thing to have huge opportunities in their single products? And there's an ability to go after those products the standard company would take Never rose Example of that And then there are other companies where the market smaller. We see the ingenuity. We recognize that there was an enormous need for a drug coated full moon by all the recognized that way weren't gonna be first. So okay, what is the value driving capability of the technology? And we realized it wasn't the balloon. So we decided to go on the ever cross way, realized that it wasn't European sales or European approval. So we decided to forgo any effort in Europe. Aside from clinical work that we get in Europe with Germany, Germany and we decided that the biggest play with the lowest hanging true coronary space, we completely alienated any efforts that could compromise our vector and went straight after the cripple market in the US, without any focus on anything outside of just the chemistry with drug, obviously using they have a crossbow were very, very tight. What that did is allowed us to be very, very lean as a team. So we had a core group of people that were exceptional. Actually, Marco, who was the chief operating officer of that company, is best in class in terms of his ability to do what he needed to do in terms of getting approvals, coming up with strategy, regular story strategy, enrollment, etcetera, incredible. And then we worked really, really hard with that small people toward the end. Points not only enable us to be very focused, as I said, but that also focused saves a lot of money because you're not spending things distraction. So
Scott Nelson: 11:12
Duke Rohlen: 11:13
cost savings helped us
Scott Nelson: 11:15
raise very little money.
Duke Rohlen: 11:16
And then when you raise a little bit of money, you have a lot of room for arbitrage, right? So you can go and sell for 300 million. Or you could still get an incredible return on equity for, you know, 150 million, which opens up the buyer universe by opening up the buyer universe who end up with more offers, which just by virtue of the fact that you have more people interested, even though summer at a lower price, higher price, you know the value of the company,
Scott Nelson: 11:44
that framework that utilize really focusing in on that one vector, I think, is really beneficial and probably a key learning point on that note. Did you feel like by ignoring the coronary market by kind of ignoring other regions, you know, Europe included, and just focusing on the periphery market in the U. S. Did you feel like that was a risk? How did you overcome, you know, balancing the fact that you wanted to just focus on that versus maybe some alternative paths that could have potentially worked out
Duke Rohlen: 12:11
way. And yet we had a very, very revolutionary technology with silver talking. But my whole mindset was towards medical data, and I looked at the peripheral market and I said, Gosh, look what happened with
Scott Nelson: 12:33
drug coated stents in the
Duke Rohlen: 12:35
corner market, there was more of a subject. They clinical data that demonstrates fertility. Did nine months have 8% of percent balloon angioplasty market, right? So my feeling was peripheral market back in 2000 nine, there was a lot of data that was still able to drive realization on. Yet I felt if you had that data said you'd be able to get in command significant market
Scott Nelson: 13:06
Duke Rohlen: 13:06
no, I never viewed it as a risk. I've You didn't trade off for sure, but I was very confident that with clinical data you could go after a $1,000,000,000 market and make a huge inroads on. I felt it was a race to be within a certain time frame of the leader, which was tonics and show demonstrably better data.
Scott Nelson: 13:36
I wanna ask you a little bit about when the deal with Comedian came to fruition. But before we go there, I remember reading about the fact that you basically managed your clinical your clinical trials internally versus you know, that may be the more common approach is working with an outside. So can you talk to us a little bit about that and why you made that decision and whether or not it was
Duke Rohlen: 13:55
Yeah, I think it turned out to be incredibly effective. There was, you know, just like I was talking about getting this conversation. Transparency is important. Transparency establishes trust. Trust established his loyal right. So what we did is we said, Let's go get very, very good, high rolling position that trust us, and they're gonna go the extra mile because not only are they getting paid well, but more importantly, we nurtured and engendered incredible relationships before we started the trial. And then when I started the trial, we were able to actually win this lots of terms of moment. Why would we do that? Very well, do that because it was actually dealing with traditions. But some of the accountability and some of the personal loyalty goes away when that outsourced. So even when you get to doing a bigger clinical study, I think it's imperative that, you know, the principles of information are actively involved in creating. Sites are actively involved in managing not only with positions
Scott Nelson: 15:02
Duke Rohlen: 15:02
positions but also working with the clinical staff because the president stop, stop, be as important to buy in the positions we were actually doing. So it requires more work. But my whole philosophy and might be those about running companies, is people like to be part of success
Scott Nelson: 15:22
Duke Rohlen: 15:23
They're not afraid of hard work more than they like to be, you know, underutilized. If you push these people, they're doing more than that. Not only can they feel great and as do I or as the positions, it's the lack of moment of momentum in the lack of attention and lithe
Scott Nelson: 15:48
and wait can. I would have expected you to answer that question in that way. But after hearing you explain It makes a lot of sense, especially in regards to, you know, sort of empowering your your sights, your trial sites to sort of get involved and feel like they're involved in what you're trying to accomplish as a team, as a company. So that's very interesting.
Duke Rohlen: 16:09
Yeah. I mean, everybody wants to feel important,
Scott Nelson: 16:11
right? And everybody
Duke Rohlen: 16:12
is important if they're treated their my way. And I do believe that these relationships with sites would you think about the most important thing for see the I was positive. So given that the most important thing was that positive clinical study, I felt that, you know, it was the best use of my time and Felipe's time to make sure that study will quickly and, you know, and I would never have outsourced that thio anybody, no matter how good they were. With zero
Scott Nelson: 16:45
perspective just too
Duke Rohlen: 16:46
important to the mentality of the company
Scott Nelson: 16:49
before we get into the timing around the deal that you did with Comedian because I want to ask you about how your past relationships impacted that anything else that you want to mention in regards to, you know how much you and your team were able to get done in four years. Any other strategies or tactics that you employ that would be valuable for the audience to know about.
Duke Rohlen: 17:06
One of the things I think challenges the lack of focus. A lot of common times comes from answering to a lot of different opinions. Someone will say Okay, I think you should be going in Europe or someone else. I think you should be doing that. You're going coronaries and I think that what we did is we raised our money. We raised the money from any A, raised the money from our individual investors before any A with a very targeted approach and that targeted approach allowed for buying, which took away a lot of questions or the strategic discussion at the board level on a going forward basis. We knew what we were going. Everybody was galvanized around that mission and everybody worked incredibly hard to make sure it was realised without distraction. I think that's a critical piece of any small company and if you look at the companies that spend a lot of money, look at companies, they try this, try that they've gone to Europe, they start commercializing here these things, you know, they all go back to fundamental initiative, which is our building this to sell or you're building this to be a standalone company and what is the fastest way to get there and the most cost effective way to get there? But that alignment is critical, in my opinion, to be cost effective.
Scott Nelson: 18:24
That's a good little anecdote that you pursued investment money with that purpose in mind. That's great. You mentioned any and I know I remember reading an article by Think Justin Kline, who led some of those rounds of investment with any A. But he made a comment about how you know you've done a fantastic job building relationships, that former companies and how that helped to sort of not only get the deal done, but get it done in a way that was a win for everyone. So can you speak about that? And how those past relationships that you forged at E. V three in that condition led to the eventual sale of CBS
Duke Rohlen: 18:56
companies are bought me gently not opportunistic, meaning you don't go develop a company in a black hole and then hope to sell it to somebody when you have approval. What happens is you have a lot of dialogue. We have a lot of strategic discussions with a lot of companies and let that know what you're doing and when you're doing it. And then they can monitor how you do it, right? Are you effective at doing what you said you're gonna do when we sold Fox? Although that was how we did it. You know, I actually sat down with their CEO, Jim Corbett, and from those initial discussions, which important, I got to know Stacy and I got to know the other people that were involved, including Warburg over three. So then when when we sold that company, it was never expected that I would stay at that company. In my mind was very clear about it. That I was gonna go do something else. So I started seeing the ingenuity, you know, during the during the diligence phase of Fox Hollow. Do you remember we talked about that drug? Could have Well, I'm actually building a team that could go and create that. And I'd love for you to follow us because we were close at that point because we have engaged in a lot of dialogues about where the peripheral vascular market potential disruption that could come from drug balloons. She was very interested in understanding what I was doing. I don't think I also think she had confidence in my team that we could pull off something as audacious. Is developing a drug cut a balloon? So are our Siri's. A. Our seed investment included money from from committee, and that was all driven by. I was actually leaving three of time before the emergency committee that was all driven by relationships that we had formed was exiting Fox Hollow. So relationships are key, and I think, one of the critical pieces just like, you know, person who's driving strategy this company has to be involved in in the the high value initiatives for TV, I was clinically woman. They also have to make it a priority to know personally that the buyers get to know that you understand what they're thinking about and to be there.
Scott Nelson: 21:13
Duke Rohlen: 21:14
and thio, you know, and to engage them proactively, right? I probably met with Davidian or E V three, 25 times, but I'm not kidding. Well, uh, maybe 20 times before we actually did the transaction, and comedian knew what my influence. They knew that I was gonna sell the company that i d approval. And so they had a lot of time to do diligence on the company. Understand what the opportunity Waas. And so when I said Listen, I want to sell the company, and we're gonna do it on you could be competitively advantaged if you go and, um, and move quickly. They responded immediately. They also knew that Optionality is what I completely subscribed. You have to have options and they know that I was very transparent with Hey, listen, if you don't want to fight with yourself, somebody else and they're a bunch of buyers that would want it. So either step up and step in at a big level or step out. There was a lot of confidence in my ability to communicate that
Scott Nelson: 22:18
the mantra of people buy from people. I mean, that that applies, you know, even in this type of situation, right? They trusted you knew your experience. He had built a relationship over years. Well, clearly it impacted your success in making that deal happen. That's
Duke Rohlen: 22:32
right. It also impacts you know Ryan Durant, who funded Ryan and Justin funded TV Ingenuity and Ryan and I had gone to Stanford together and didn't know each other very well at Stanford. And then, you know, Ryan had been involved in seeing how we operated our companies at Fox Hollow and he was a partner, right? Ryan was an investor and Justin wasn't investor. They were true partners and seeding ingenuity. Incredibly value at it. Guys who our great investors and great because they buy in and great because they add value. You know they buy into the strategic direction because I think it makes sense, and then they add value on a going forward basis. But that relationship doesn't happen overnight, either. You gotta nurture that along, that they're ready to pull the trigger on on investing when it makes sense for them to do so.
Scott Nelson: 23:21
That's a great perspective. I think the takeaway is it's just like in all relationships, don't burn any bridges and really try to foster and take advantage of everyone. You cross paths with a CZ time. There's Longmen, Texas, small circle, a zay mentioned in the intro. You spent quite a bit of time at Fox hollow lead that company through a typo and then eventually sold it. TV three, as you mentioned earlier, you know, participated in a lot of interesting things, you know, partnership with Mark. That I think was I can't remember exactly the deal size in that partnership with Mark. That was, I think, fairly unique. You took that company through an I p O. You know, when you think about some of those deals that you, uh, that you participated in the lead at Fox Hollow, do a couple of those. You don't come to mind any any takeaways that were valuable for you now or valuable for your time at CV, I receive the ingenuity.
Duke Rohlen: 24:06
One of the things that I think a lot of pride in is the deal we did with Burke. That was a deal. That was unprecedented time, which is that we were taking out this plaque and we thought we could figure out a way to use the plaque to help under stand disease process after influenced by medicine. And so the concept was that you could get a baseline of disease in one leg when you do at directing on one leg by taking that plaque out doing analysis on that black, you could, you know, put a put a patient on medicine and then when you go back and treat the disease leg on the other side because almost all patients have bilateral disease, you could see if the if the medicine actually influence the disease process. So it was really not all idea. And it was very, um, it was it was just a big idea, right? And so, uh, what I learned about that is it just takes a lot of knocking on doors, and I sort of with another person, a woman. Angela. So that was in charge of regular touring company. We just started talking to companies and trying to sell them of this vision. That division made sense and, you know, and then we ended up doing this deal Mark and that feel became a bye $100 million deal with Burke ending a big bond buying 10% of our company. And so what if the takeaways from me about that deal I had complete conviction that there was value that was
Scott Nelson: 25:38
could be realized from this
Duke Rohlen: 25:39
transaction, So a zay was flying all the way around the world a lot of time on and selling this concept. I knew it. I knew somebody should buy it. Somebody should engage in there again. It goes back to milling with confidence that there's a value added proposition associating with the efforts you're doing and then being very, very tight about who could who could benefit from it and going after them. We ended up finding a group in murk that was that had a very visionary approach to drug development and engaged in a big way to take away from me from that was Hey, listen, you got a You gotta work pretty hard and you got to be pretty clear about the value proposition associate with working hard in order for you to get anything happen. And it took a year. It took a lot of knocking on doors and a lot of failed ideas and potential meetings for that to happen. But it continued Thio before we're getting that deal. That was one. The 2nd 1 was I looked at the sale of the company. We're at the collection point as a company where, uh, we either need to become an aggregator company by buying other other other companies. You know, we have looked at the life stent. We looked it in the tech out of Italy, and the feeling was we either use the leverage I distribution channel or we need to sell to some of the company. We were at the size where it was hard to sell a company because, you know, you had a lot of money in the company at that point. And I think the lesson for me was, if you're gonna be a single product company and if you're gonna be public, you better have a pipeline. And, uh, in that, that revenue line better be stable. I think that we found Ah, great Byron TV three. And I think actually evey trees ultimate acquisition by, um, uh, cavity in was, uh, in large part, uh, attributed to the industrial
Scott Nelson: 27:37
Duke Rohlen: 27:37
having at direct to be with their balloon stent lines. So I think that the ultimate vision of having multi product company that leverages infrastructure was realized. I would say that I think Fox Hollow could have done it if we had thought about being an aggregator company. But we weren't organized as an organization to be that kind of company from inception, which I think is the company. You have to be able to do that Well,
Scott Nelson: 28:03
if you're gonna become a
Duke Rohlen: 28:04
Scott Nelson: 28:05
back to your example with Mercury quick, I understand that, right? I presume you've got a lot of nose as you were pitching that that proposition. But the underlying as you mentioned, the underlying conviction that that there was true value is just too clinical value for at the core of that concept sort of led you to keep keep knocking on those doors despite the nose. Is that fair to say
Duke Rohlen: 28:25
That's absolutely right. So I was working with the great scientist a guy named Tom could tear most over. It stands for the guy that you and Ashley over at Stanford, and we knew that there was a lot of rich data in the plaque, you know, and, uh, and we knew that plaque should be influenced by drugs. And if we could basically measure that influence or not, it would have tremendous value to the company. They're spending hundreds of millions of dollars trying to get an outcome space study complete right, So if you can know, it's going to influence positively disease process early, which is what we're trying to demonstrate. Wow, it's worth an enormous amount of money and that's where you know, that's where I felt very confident when we structured that $300 million deal with Merc. I felt very confident, saying, Hey, listen, this is worth 300 million even though we're basically selling them stuff that we were taking out of the bodies throw away. So is that confidence that gave me the ability to negotiate a strong deal?
Scott Nelson: 29:29
Let's fast forward the present time. So you're currently I'm not sure this will resonate with our audience. I consider use the Jack Dorsey of Med Tech. You know you're running two companies at the same time. Jack is running square and Twitter for those that are listening and aren't familiar with him. But not sure if that's a fair description, but I'll leave it at that. Let's fast forward and talk a little bit about your experiences at Spy Rocks as well as a CT Vance Cardiac Therapeutics. So you recently raised a Serie C for spy rock, so congrats on that, I think was, I think I read a around $45 million Serie C. So congrats on that. When you think about your experiences and I said what I want to contrast that with, I believe you also structure to deal with Abbott for a C T back in, I think 2014 that was more of, ah, corporate venture collaboration where they leave for you to describe that. But maybe compare and contrast the two in regards to your experience is raising money for really stage cos
Duke Rohlen: 30:17
well, I think that they're very different. So by rock is a technology for that your nose and throat space. You're right. We get raised money from our insiders. So we had Venrock. We had aperture involved, We had w t I
Scott Nelson: 30:30
involved. And then we brought
Duke Rohlen: 30:32
in a sling and k k r. And so we have, ah, very strong syndicate. Unlike most medical device companies, way have about $60 million in the bank. So we've spent about 10 million to get where we are. I have a lot of money in the bank, and we're, you know, approved to start selling the problem. It's a very different paradigm, a different world right now, where capital risk is is a is a significant risk for companies. And so I thought, Let's just take out that capitalist by bringing in the money that we need to get to, You know, 100 plus $1,000,000 revenue company and bringing a good black KK are and the other syndicates that are involved in the deal that give us flexibility to make moves, make moves todo by a company or to build a company the right way without have to worry about short term, short term responses. So it's to me, Optionality and reducing Capital Risk is a critical part of being a med tech CEO. The abbot deal was the same thing.
Scott Nelson: 31:27
Advanced cardiac Therapeutics
Duke Rohlen: 31:29
with the company that I've known in college for a long time. They had gone to run out of business. They run out of money and we're looking at shutting down the company. I call it Justin is a friend of mine and said, Let's go on recapitalize that company because I think there's a lot of interesting room to grow that company, and, uh, we get it. So we took advantage of a lot of good work that had been done, Uh, and and raised $7 million. And it just so happened that Merck that Sorry Abbott was putting together, uh, sort of consolation of companies. That was gonna be the basis of their E p franchise. And they looked at to appear and they looked at Petronas and looked at a C T. And so it made sense for us to not take venture money from them, but to give them the opportunity to buy the company. So they they put, you know, less than $30 million into the company without any equity rights. They basically just got the option to acquire the company. And, uh, in the acquisition, Tigger Point became C e marks. What that did was effectively gave us a straight vector. To what?
Scott Nelson: 32:40
The value creation
Duke Rohlen: 32:41
inflection point wasn't for us. It was okay. Build this to see Mark approval, right, and show that it works in humans, and then you get paid. So we took out all market risk. We took on a capital risk with them and made it a straight shot execution play. And then I was able to build an incredibly good engine to do that. Spy rocks have incredibly good engine two It's a different place, right? So we have big
Scott Nelson: 33:03
Duke Rohlen: 33:04
have a lot of money, and so we're going for a big company there. But the difference is in the model allow for me to actually manage effectively. Both companies. Spy
Scott Nelson: 33:15
Rocks is got
Duke Rohlen: 33:16
a great team. A CT has got a great team, but a C T is focused on CG mark and sell, whereas Spy Rocks is focused on growing a company that can hopefully be, ah, publicly traded company that has multiple products. You know, the next 3 to 4 years
Scott Nelson: 33:32
that's two completely, almost completely different paths. And that's very interesting. And I could see why you'd say that. It allows you to kind of effectively manage both because of the clear shot to the goal, I guess, with a C T versus what you're trying to do with spy rock. So before we end our conversation with a couple rapid fire questions, what is your general advice for those throws early stage founders or folks that are at early stage companies that that are raising money or either need to raise money and maybe don't have the reputation that you have? Do you have any advice in regards to raising it with traditional venture capital investors or corporate corporate venture arms.
Duke Rohlen: 34:04
I look at companies three parts. Equally important, I look a technology part as being 1/3. You have to have a technology that addresses and unmet need, has reimbursement that can get clinical data and can come to market in a time frame and with a cost allocation that cost to get it time to market. That makes it right. If
Scott Nelson: 34:28
it takes 20
Duke Rohlen: 34:29
years to develop something, the market's gonna move beyond. So there needs to be like a period of time that that works. That's complemented. That technology is complemented by two things. A teen and what is the team? The teen is not just just the technology people that feel that the team is the people that are required to build to develop on a business plan, right? So that could be the venture guys that could be a private equity group. That could be, um, you know, advisors. That could be if you're going into a highly political, uh, industry, it could be people that represent political persuasion. But the third piece has to be that business model And so you have tohave Ah, business model that says, Not that we're gonna be able to sell this amount of product To get this amount of revenue, you have to be able to say, this is how we're going to get equity returns for the investing for the investors. So when you
Scott Nelson: 35:24
Duke Rohlen: 35:25
it as this whole, you have three contributing factors. You have a business model, which has to be sound and clear. Right? Are you building a product to sell? Are you going accompany the last two? You have to have a great technology that facilitates that. And three, you have to have a teen that's all comprehensively oriented to around you into that business model. I think a lot of mistakes are made with people. Just focus on the technology, right? We're
Scott Nelson: 35:51
gonna know this
Duke Rohlen: 35:51
technology because and there's not a lot of business strategy around that. That's the second thing is that you have to be capital efficient. You know, you just look at all of the road kill that's on the side of Of of the roads from the last 10 years of medical device investing, it's given the space and incredibly bad name, and it's because it's because they spent a lot of money in the They don't have a lot to show for it. And it's not because of anything other than, um, I think changed business plan. So I think you have to be incredibly capital. Capital efficiency requires trade offs and trade offs allow you to trade us based on creativity. So you have to be creative and capital efficient with early money in order to be able to track later stage money. And 1/3 thing I was going to say is you have to have an ace in the hole and ace in the hole for me is somebody who knows without question, um uh, everything about that technology, everything about that space and can give you competitive advantage over somebody else who doesn't. And every one of my companies has at least one employee, if not two or three, that are what I call a sin the holes. So I work with the best and the brightest in order to make sure that we're nailing what we want to do. But I think if you nail those three things, you have a chance right and then things have to break your way in order
Scott Nelson: 37:16
for it to work out three really, really good takeaways in regards to, you know, raising money for early stage companies. So let's real quick before we run out of time gets in the last three questions, which is sometimes my favorite part of this conversation. So, first Duke, what's your favorite nonfiction business? Mook.
Duke Rohlen: 37:29
So I have to, um, I have a book. I love Stephen Covey's book. I think that seven habits of highly effective people and I know every one of those habits. I've read those books maybe 20 times. I think they're phenomenal. Have him on tape. It's better. I think that's the best nonfiction business book I know, and you can actually characterize all other books and what you see business guys have done into those habits. If they've been successful, it's really true. I also read a book about five years ago. It's about this guy. Peter Barton founded Liberty Media. He ended up dying of cancer, but his book was Don't Fade Away, and It's an incredible book about his life and lessons and balancing family work and career aspirations. And, uh, those are my two favorite books.
Scott Nelson: 38:15
So is there another CEO or business leader that you're following right now?
Duke Rohlen: 38:19
My favorite CEO is, uh, be those from Amazon. He basically lived by the philosophy of Attack, Attack, attack, you know, Let's keep going, keep going, keep going. He thinks big. He invests the right amount of money. He's grown a company that's profitable, and it's just taking over the world. He's not in the med tech sector, but he's a guy that I think is extraordinarily bright and has combined beautiful strategy and vision with unbelievable execution.
Scott Nelson: 38:45
And then, lastly, when you think about the course of your med tech career, you could rewind the clock a little bit and give some advice to your 30 year old self. What would that be?
Duke Rohlen: 38:53
So one time I know that Fox, although a board member who I don't know if he likes me or didn't like me, but he told me I was impetuous but honest, competitive but convivial. And I didn't really understand what most of those
Scott Nelson: 39:06
words been a time,
Duke Rohlen: 39:08
but I wrote it down because I thought it was really interesting. I knew is not a positive thing, and I rejected it. Once I went and looked up those words when I thought he was dead wrong. I think he was dead. Right, Which is you know, I think you have to be impetuous. You have to be honest. I think you have to be competitive. But you also have to be friendly. And you have to do it in a way that makes people want to continue to work with you because it is based on relationships. At the end of the day, you got your integrity, and you have your relationships and and those little attract people that allow you to be successful. You've
Scott Nelson: 39:37
Duke Rohlen: 39:37
to be competitive. You gotta push hard, and you got to attack attack back. So I would advise myself to continue to be aggressive at my 30 year old self.
Scott Nelson: 39:47
Very good, if that's good stuff. So I know you gotta get to go into, but thanks again for your willingness to do this interview. Okay. Thank you, Scott. And look for to touch