The Co-Investor Question That Determines Everything in Biotech and Medtech
with Károly Szántó and Thijmen Meijer
This is a continuation of our main conversation.
We have been building a single line of logic across these episodes and editorials, not a collection of opinions. We started with the startups and spinoffs, why they suffer, where the gap really is, and how the right model can close it. Visibility, milestone discipline, and a credible path to exit are not motivational slogans. They are outcomes of execution.
Now we move to a stakeholder who decides whether the model scales or collapses.
The co-investors.
In my dialogue with Károly Szántó and Thijmen Meijer, one point kept resurfacing from different angles: the co-investor fit is not a detail in the financing. It is the financing.
Because in biotech and medtech, the cap table is not a spreadsheet. It is a governance system. It shapes cadence, risk tolerance, hiring, protocol decisions, regulatory posture, and the founder’s ability to stay rational when reality starts pushing back.
You can have a promising asset and still lose years because the wrong people sit behind the signature rights.
So here is the central question:
Who are you building the company with when the trial gets hard, the recruitment slows, and the data forces you to make uncomfortable choices?
That is the co-investor question that determines everything.
Why this question matters more in biotech and medtech than in most sectors
In many industries, product market fit can show up quickly, and iteration costs are manageable. In life sciences, iteration is expensive, slow, and regulated. The timeline itself is a risk instrument.
This creates a simple problem with a brutal consequence:
If your investors misunderstand the real risk, they will demand the wrong proof at the wrong time, with the wrong urgency. The founders respond by optimizing for the next check, not the next milestone.
This is how good science burns capital.
In our earlier discussion, we addressed several burning platforms that are structural, not personal:
High technical failure rates that often come from trial design and execution, not the molecule itself
Capital inefficiency from a weak operational structure
Execution risk when academic founders do not have regulatory and management discipline
Talent scarcity and uneven distribution in clinical operations
Geographic bottlenecks and recruitment friction in traditional hubs
Cross-border regulatory complexity
Investor mistrust in soft claims and underpowered data
Dilution pressure from unstructured rounds
Exit uncertainty without Phase II or Phase III pathways or strategic partners
None of these problems are solved by enthusiasm. They are solved by governance, infrastructure, and decision quality.
The co-investor profile determines whether those elements exist in practice.
Stop categorizing investors by labels, start categorizing them by behavior
Károly made an important point early in our dialogue: do not start with types. Start with the value proposition and the synergy.
People love to debate investor categories: angels, VCs, corporate venture, family offices, and institutional investors. But the category does not predict behavior under pressure.
What predicts behavior is alignment on three dimensions:
Incentives
How do they win, how do they lose, what do they fear, and what do they optimize for?Capabilities
When the company faces execution friction, what can they actually contribute beyond advice?Decision cadence
How fast do they move, how do they validate, and what does their governance style do to the founder’s operating rhythm?
A cap table filled with misaligned incentives is a slow liquidation.
Skin in the game is not a slogan; it is a filter
Károly said it cleanly: we invest time, professional services, and capital. We have skin in the game. That changes everything.
When capital is the only contribution, the investor has one tool: pressure.
When capital is combined with execution support and reputational risk, the investor has a different posture: partnership.
I have seen this repeatedly across markets.
When everyone carries downside, people stop romanticizing optionality. They focus on what works.
This is why I do not believe in a model where the operator is purely a service provider. If you deliver expertise but do not share exposure, the relationship stays weak. The founder will treat you as a vendor, and the investor will treat you as a cost line.
In early-stage biotech and medtech, that is a recipe for superficial diligence and delayed accountability.
Skin in the game does three things:
It forces disciplined selection. You cannot pretend every deal is great when your own downside is real.
It improves decision speed. People stop debating abstract theories and start validating operational realities.
It creates trust. Not emotional trust, but structural trust.
If you want to know whether someone believes in a thesis, look for cost.
Time, capital, responsibility, and reputational exposure.
Two co-investor archetypes that actually work
In our conversation, Károly outlined two kinds of investors that can create real synergy with an execution driven life sciences model. I agree, and I want to sharpen the distinction.
Archetype one: the deep tech generalist who needs a domain partner.
These investors may include medtech as one focus among several deep tech themes. They can be very capable allocators, but they are not specialized in clinical reality.
They need a partner who can validate, de-risk, and translate.
Not as a consultant, but as a co-builder.
What they bring:
Broader market pattern recognition across sectors
Strong capital networks, syndication, and follow-on pathways
Often excellent discipline around governance and reporting
What they lack:
Protocol level intuition
Regulatory navigation across jurisdictions
Operational depth in site networks, recruitment, and clinical delivery
If you can provide the missing capability with real accountability, this partnership can be powerful.
But it only works if the generalist respects domain expertise and does not treat biotech like software.
Archetype two: the domain embedded investor who can double down on execution.
These investors already live in biotech or medtech. They understand why execution is the moat.
They can add value in:
Regulatory strategy
Go to market in healthcare procurement realities
Clinical evidence expectations
Strategic buyer logic and partnering pathways
The risk with domain-embedded investors is not ignorance. It is a competition of theses. If you are not aligned on the company’s clinical strategy and exit logic, you can create internal friction fast.
So the key is synergy in execution, not parallel oversight.
If the investor’s contribution is to second-guess every operating decision, you will lose time. If the contribution is to strengthen the decision, you gain speed.
Angels and corporate venture have a place, but know what you are buying
Károly also raised a practical truth: in early stage, angels often appear on the cap table, and that can be a strength.
A good angel investor can be hands-on, responsive, and personally invested in the founder’s success. In pre-seed and seed, there is no such thing as too much support, as long as it is the right support.
The danger is unstructured influence. Ten small angels with ten opinions can create noise and slow governance. One or two high signal angels, aligned and disciplined, can accelerate execution.
On the other end, corporate venture capital can be valuable for a specific reason: they can help you build a company that will be attractive to a strategic acquirer in the long arc.
But you must be honest about the time horizon. If you take corporate venture money, you may be shaping your product, clinical plan, and market narrative toward a strategic buyer logic that plays out over many years.
That can be correct, but only if the founder wants that path.
The wrong corporate partner can quietly block partnering conversations or create perceived conflicts. You must diligence their intent and internal alignment, not just their brand.
Family offices: patient money, relationship first, values first
Thijmen brought family offices into the discussion.
Family offices, especially those focused on deep tech and medtech, can be exceptional partners. Often, the decision maker has built and exited. They understand what building feels like. They also understand that the path is not linear.
But family offices require a different operating system:
They want to know you, not just the deal
They often have a personal connection to a disease area or technology
They evaluate alignment and trust before they evaluate scaling plans
I have seen this clearly in Singapore. For a country of about 6 million people, the number of family offices is substantial. The density itself changes how relationship networks work.
When I accompanied one of my portfolio companies to a family office event, the dynamic was not transactional. They wanted time. They wanted proximity. They wanted to understand character.
Károly said something I fully agree with: with family offices, you do not start with business. You start with values. You build a friendship.
If that sounds slow, good. It is slow for a reason.
It is also why cold outreach fails. Intros matter. Social proof matters. Who vouches for you matters.
Founders often misread this and send a long deck. That is not how it works. You earn the conversation.
There is also a cultural layer. A family office in Asia can operate with a deeper relationship expectation than a family office in Switzerland. Neither is better. But the rules differ, and you must respect that.
Europe versus Asia: the same type of investor can behave very differently
In our dialogue, I raised a frustration I have experienced: some investors understand the model immediately, and others simply do not.
Sometimes the message was not delivered clearly enough. Sometimes the investor is trapped in a conservative mental model, focused on numbers that are not yet meaningful at seed stage, while ignoring execution risk, which is the real determinant.
Károly shared a useful story from Europe: high-net-worth individuals successful in real estate who consider themselves experienced investors, yet have a limited understanding of venture mechanics. They question why ownership percentages look small or why risk is structured differently. That is not a moral issue. It is a fit issue.
His conclusion was pragmatic and correct: you cannot force it. You can like someone personally and still be operationally incompatible.
This is an important discipline.
Founders waste time trying to convert people who do not share the mental model. Investors waste time trying to impose frameworks that do not apply.
Compatibility is a feature. Not everyone belongs in your syndicate.
Management fees, giant funds, and why alignment is under pressure
Károly also referenced a broader trend that matters for LPs and founders: as VC firms become giants, their incentive structure can shift.
When a fund manages enormous assets, management fees alone can become a meaningful business. That can create comfort. Comfort can create misalignment.
This is not an attack on any specific firm. It is a structural observation: any model that pays well regardless of performance must fight complacency.
The consequence is that some large funds may become less motivated to do the hard work at seed stage, or they may pursue strategies that fit their fund size rather than the company’s needs.
In parallel, micro funds and smaller funds often show stronger performance, partly because they cannot afford to be passive. They must be sharp, effective, and close to execution.
LPs are reading the same statistics. Many are opening up to emerging managers with smaller, domain-specific funds.
This is where biotech and medtech will increasingly go: vertical focus, execution support, and real operating leverage.
The industry-agnostic approach is losing relevance in complex, regulated domains.
Why we do not separate clinical execution from capital allocation
My view is simple: in life sciences, clinical execution is the investment thesis.
If you cannot de-risk protocol design, site selection, recruitment, regulatory readiness, and data quality, then you are not investing. You are speculating.
This is why hybrid models are rising, models that combine clinical infrastructure with investment discipline.
Not because it sounds innovative, but because it reduces failure modes that destroy returns.
The goal is not to promise certainty. The goal is to remove avoidable failure.
There is a difference.
If a trial fails because biology is wrong, that is part of the game. If a trial fails because execution was weak, that is a preventable loss.
The co-investor question is about whether your partners understand that difference and whether they are built to act on it.
A practical checklist: how to evaluate a co-investor in biotech and medtech
If you are a founder or if you are building a syndicate, here is a checklist you can use immediately. It is not theoretical. It is based on what breaks companies in the real world.
1. Can they articulate execution risk without hiding behind jargon?
Ask them to describe the top three risks in your next 12 months. If the answer is only market size and valuation, they are not ready.
You want investors who can speak about protocol feasibility, recruitment realism, regulatory pathways, and operational milestones.
2. Do they respect domain expertise, or do they override it?
Generalists can be great partners, but only if they respect specialization. If they treat clinical work like a commodity, you will fight constantly.
3. What is their decision cadence under uncertainty?
In biotech and medtech, you often make decisions with incomplete data. Some investors freeze. Others force premature certainty.
Ask about a time they funded a company through ambiguity. What did they do, how did they behave, what did they measure?
4. How do they handle follow-on support?
Early-stage capital without follow-on logic can be a trap. You need partners who can either follow or help you syndicate intelligently.
Ask directly: what triggers a follow on for you?
5. Are they values aligned, especially in healthcare?
This matters more than founders want to admit.
Healthcare touches patients. It touches ethics. It touches long timelines and public scrutiny.
Family offices often understand this intuitively. VCs may focus on numbers. Neither is wrong, but misalignment will surface when pressure comes.
Ask what impact means to them in practice.
6. Do they add capability, or only capital?
List the five things you will need help with in the next year: regulatory planning, clinical ops hiring, KOL access, strategic partner introductions, reimbursement thinking, and hospital relationships.
Then ask what they can actually do, not what they have seen.
7. Are they comfortable with your model of accountability?
If you run an execution heavy model with embedded clinical infrastructure, your reporting and governance may be different.
Some investors will love it. Others will see it as unfamiliar.
You want co-investors who understand that operational discipline is not overhead. It is the moat.
A suggested approach with family offices: start small, learn fast, build trust
Károly offered a strategy that I consider highly practical:
Invite a family office to participate with a smaller ticket directly into one of the startups you have invested in. Treat it as a learning cycle for both sides.
This reduces friction.
It allows them to see how you operate.
It allows you to see how they decide.
If alignment is strong, the relationship can evolve naturally into larger participation, even LP roles in a future fund structure.
Many family offices have tried to invest directly and regretted it, not because they are not smart, but because portfolio construction and governance require a system. They still want exposure, but they want professional management.
That creates an opening for aligned operators with real infrastructure.
The founder perspective: choosing investors is choosing your future operating system
If you are a founder reading this, I will be direct.
Do not optimize for the biggest check.
Optimize for:
The fastest path to credible milestones
The lowest probability of preventable failure
The strongest governance under pressure
The clearest path to strategic partnering or an exit
Ask yourself one question:
When the data is mixed, who do I want in the room?
The wrong co-investor will push you to spin. The right co-investor will push you to decide.
In life sciences, decision quality is survival.
The investor perspective: the best deals are built, not found
If you allocate capital, especially in biotech and medtech, you already know the truth: this is not a passive asset class.
The highest returning opportunities often look messy at seed stage. They require clinical discipline, regulatory competence, and operational maturity.
So the question is not only whether the science is exciting.
The question is whether the company can execute, and whether the syndicate can govern execution without breaking the founder.
If you want asymmetric returns, you need asymmetric capability.
That is why de-risking models, embedded clinical networks, and operator-led investment platforms are gaining momentum.
Not because of marketing, but because of math.
Bringing it back to our main conversation
This episode title is not a provocation. It is a reminder.
The co-investor question determines everything because it determines how you move from promise to proof.
In our continuing dialogue, Károly, Thijmen, and I keep coming back to the same point:
Capital is necessary
Execution is decisive
Alignment is the multiplier
If you are a founder, treat your cap table as your boardroom culture. Choose people who reduce noise and increase outcome probability.
If you are an investor, choose partners who do not just price risk, but actually remove it.
That is how real therapies reach real patients.
And that is how clinical innovation becomes scalable impact.
Timecode:
00:00 Introduction to Key Stakeholders
00:22 Types of Co-Investors
01:09 Value Proposition and Commitment
02:10 Investor Specialization and Synergies
03:26 Role of Angel Investors
04:02 Corporate Venture Capital
04:44 Family Offices and Personal Touch
08:56 Challenges in Different Regions
09:32 Building Relationships with Investors
10:34 High Net Worth Individuals
18:02 Micro Funds and Emerging Managers
19:51 Conclusion and Future Outlook
Links:
Peter M. Kovacs LinkedIn: https://www.linkedin.com/in/petermkovacs/
Peter M. Kovacs Personal Website:https://www.petermkovacs.com/
PMK Group Website: https://www.pmk-group.com/
Guests:
Károly Szántó: https://www.karolyszanto.com/
Thijmen Meijer: https://www.thijmenmeijer.com/
UniPrisma: https://uniprisma.com/
Transcript:
Peter M. Kovacs: So we talked about the very important stakeholders, which are the startups and spinoff companies, how they are suffering, how we can find the gap, how we can solve the gap, and how we can build them up and support them to reach the visibility and the exit level. And also to get attractive for the investors.
We also have a very important stakeholder in our model: the co-investors. What kind of co-investors do we work with, what kind of co-investors are we expecting to collaborate with? What are the main differences for us between the different types of investors? How do you see this?
Károly Szántó: I would start maybe not with the types, because as we discussed earlier, there are ways to work together with angel investors, institutional investors, VCs, and in some cases corporate venture capital and other investor types. I think, again, it's about the value proposition—whether there are strong synergies between the investor partners. We collectively invest a lot of time and professional services, as well as capital from your side, Peter. So we have skin in the game. I think this is the most important part: how you can prove that you believe in something. You have skin in the game. Otherwise, if we screw up, it'll hurt all of us. This is the commitment and dedication apart from everything we have said. Our professional de-risking and risk mitigation is our core offering.
I see two kinds of investors that could be interesting. One is not so much domain-specific, but maybe in their investment thesis, med-tech is one focus among other deep tech interests. Because they're not so specialized, they need a partner who does specialize in this to provide the knowledge and experience.
Peter M. Kovacs: And the experience.
Károly Szántó: Exactly. Decades of experience in that segment to validate and to de-risk. So we can bring that to the table, but not purely as a service provider, because then that would be weak.
Peter M. Kovacs: There's no additional value. Not enough additional value.
Károly Szántó: Yes, exactly. And then the other type is deeply embedded into the med-tech or biotech domain already. We can double down on the segment, and most probably we'll find strong synergies in the execution part—in the regulatory, the go-to-market, the clinical, the testing, and all that. So I think these are the two ways to approach it.
And because we are dealing with early-stage investments like pre-seed and seed mainly, at least in this region, angel investors have a place on the cap table. One great thing about angel investors is they're usually very hands-on, and we need hands-on support. There is no such thing as too much support. But then if you look at the other extreme on the scale, which would be corporate venture capital—perhaps from a pharmaceutical company—again, they are very valuable. From that perspective, they can provide professional input and guidance on how to navigate and how to build a company that will eventually be very attractive for a pharma company, maybe seven to ten years down the line. How do you see the other conditions of an ideal partner?
Thijmen Meijer: I would also like to loop in family offices that are very specific on deep tech and med-tech. Usually, they are run by somebody that has exited actually, or has family wealth deep inside biotech or med-tech, and doesn't want to go blindly with a VC but wants to have professional investors to mitigate that risk completely.
Peter M. Kovacs: I see that family offices are extremely well represented in Singapore. In Singapore today, there are over 2,200 family offices for a 6 million population country. It's a huge number. I see that family offices focus more on the personal part. I accompanied one of my biggest portfolio companies to a family office event, and they want to spend a couple of days with you to know you very well. The personal touch is very important for them.
Also, it was very interesting that I've seen many times family offices focusing on a dedicated disease or a dedicated tech because they have some relationship in the past or their family is related because of some illness or some other experience—positive or negative. I see family offices as significantly different from VCs and institutional investors. Their financial due diligence is a bit different, and this personal touch is a bit more important. I see that very early-stage companies could be more successful not because of the ticket size, but because of this personal touch. If you find a very good founder and CEO with the personality that can present this impact, it's more touchable for a family office or angel investor than VCs. Based on my own experience, VCs are often just about numbers.
Károly Szántó: I love that you brought in the family offices. They are very much value-driven and impact-driven, and they are deeply committed to whatever they're committed to because of personal reasons of the founder or the family. But on the other hand, they are very difficult to approach. It's not a quick game; it's a relationship. I remember a couple of days ago you mentioned your event with family offices, and I had similar experiences. When you get in contact with a family office, you must not talk about business first. It's about values.
Peter M. Kovacs: Build a friendship.
Károly Szántó: Absolutely. And then if it resonates and it's built up authentically and there is a match, then of course you will find ways to collaborate. But it's not transactional. Whereas with a VC, it's absolutely New York style: go, no-go.
Thijmen Meijer: And an intro as well. Everybody said to get an intro from somebody else they know—friends or family within or outside of the family office—who can vouch for you and basically say, "This is a good one." No cold emails, no cold calls. Don't send a 14-page slide deck or anything like that. Really build up that relationship. That was quite interesting to hear.
Peter M. Kovacs: Also, I see quite a difference between the same type of investors. For example, a family office in Asia versus a family office in Switzerland. Based on cultural differences, it's even more difficult in Asia because the culture to build this friendship is even more intense than in Europe or the US because of tradition.
What do you see as the best partner for us? I see a difference in that I talk with many potential partners in Asia, as I mentioned before, and some of them understand the model and how significantly we can decrease the risk—the financial risk and professional failure of the company. Some of them understand and are more than happy to collaborate and see something new. But many of them just don't get it. Maybe I couldn't deliver the message well, or not yet. Some of them cannot think out of the box because they are still in the conservative model, just checking the numbers. How do you see it here in Europe?
Károly Szántó: This year I got in contact with some high-net-worth individuals, very successful in real estate. I was introduced to them; it was not a cold call. We started to talk, and our discussion naturally went into the investment side. They considered themselves experienced in investment, and then I found they had absolutely no understanding of how venture capital works, which is okay. I explained it, and they just couldn't get their head around it. They were like, "If you invest so much money, why would you only have 10% ownership or 20%?" The whole logic of venture capital was out of scope for them.
One thing I learned is that I would rather be very honest with myself and the other person: maybe I like you as a person, but the way we operate is so different that it won't work. We cannot force it. Also, I think once we build up something bigger and we can present it, they would be happy to join in later as followers.
Family offices are called "patient money" by many investors because they have patience; they have time. They're not VCs. They want to leave a legacy; it's a whole different story. I think one nice way to build up a lasting relationship with a family office is to suggest they join in from time to time with a smaller ticket directly into one of the startups that we invested in. This way we can learn about each other and fine-tune our collaboration model. If it works and we are aligned, then we can take it to the next level, which usually is launching a VC of our own and positioning the family offices as LPs. Many family offices have tried themselves as a VC, directly investing, and 99.9% of them regretted it. They're not equipped operationally for due diligence or portfolio management.
They still want to be involved, so the best way is them becoming LPs. More and more family offices are realizing they shouldn't do it on their own, so they form syndicates. They join together and work as a fund of funds and invest in several offices. I think this is the right way to go. But then again, it's value-aligned. Does this syndicate share the same values with us? Do they want to make an impact through biotech and med-tech? If yes, that's already good. Then there is the geographical focus and stage. Some are only interested in growth stages, while some will be interested in early stages. We need to go out and spend time with these people, not selling anything, but rather just asking the right questions.
Peter M. Kovacs: Offering an opportunity for them. I think very few players on the market are able to work in this field and provide this objective risk mitigation. If somebody understands what the real risks in med-tech and biotech are, they can understand the support that we are providing.
Károly Szántó: Thankfully, I read a lot of statistics and reports on VC to understand the trends, and our investment thesis is very much supported by statistics lately. What happened in venture capital is that the successful players became giants, but their business model has shifted because they are continuously charging the 2% management fee for their LPs. I just read that Andreessen Horowitz, one of the largest and most successful, pulled in $700 million only in management fees because they are managing billions and billions. The motivation is not really aligned. If your entire business model as a VC is to charge a management fee, then you become comfortable and values are misaligned.
Also, the return on investment decreases. What is interesting is that micro-funds and small funds—below 50 million euros or let's say even 80 million—produce much higher returns. Why is that? Because they're very motivated, effective, down-to-earth, and they cannot allow themselves to fail. The management fee will not save you if you're running a 50 million fund. You need to actually make miracles.
Now LPs are also reading these statistics, so they learn. There is a new wave of LPs opening up to emerging managers managing small funds below 50 or 80 million. I believe these funds must be vertical and domain-specific. The industry-agnostic approach is over. The way we come together and what we offer is supported by these trends. We are in the right direction at the right stage. Our narrative should be that we are de-risking, executing, and eventually producing higher returns and making much more impact.
Peter M. Kovacs: Hopefully, we prove that we were pioneers in this field and we can introduce a successful model for the ecosystem. I can just wish good luck for all of us and we'll continue from here. Thank you.
Károly Szántó: Thank you. Thank you, Peter.