So what makes a startup company a good investment for #VisionTechAngels? Obviously, there’s a tremendous amount of due diligence involved. Our priority is Indiana-based companies; we also look for companies that are a good fit with our members and our knowledge base. When OrthoPediatrics approached us in 2009, they met all of our criteria—and more.
Headquartered in Warsaw, Indiana, OrthoPediatrics was founded in 2006 by Nick Deeter, a longtime orthopedic and medical device industry executive and entrepreneur, who recognized a significant unmet need in the specialized arena of orthopedic implants and surgical instrumentation for children. Quite simply, there was no company in the world offering solutions for children with long bone deformities, trauma and sports injuries, and other musculoskeletal conditions such as cerebral palsy.
In 2011, Mark Throdahl, former group president for global orthopedic company Zimmer, was appointed to lead OrthoPediatrics. It was a challenge Mark embraced.
Mark explains. “In the past —and even now—orthopedic surgeons would use adult implants and cut them down for children even though they are not anatomically appropriate. A child’s skeleton does not mature until the late teens. We saw a tremendous opportunity to give orthopedic surgeons the means to help children with painful and often life-altering conditions. It remains a tremendous motivation to succeed.”
Like other startups, OrthoPediatrics set about raising money in its hometown and succeeded in securing $13 million. But medical device companies are capital intensive, so the company approached VisionTech Angels in 2009. What happened next, explained Mark, put OrthoPediatrics on the road to success.
“There was great synergy between VisionTech Angels and OrthoPediatrics,” said Mark. “We got invaluable counsel from Steve Burns, the CEO of Wheaton Van Lines and from Oscar Moralez. Oscar and Terry Schlotterback, another angel with 30 years in the orthopedic device industry, joined our board of directors. VisionTech Angels invested $1.9 million over several rounds.”
The well-timed capital infusion helped OrthoPediatrics’s build its team, develop an unusually broad product offering and begin expanding internationally. The company now has 16 product systems that address pediatric trauma, scoliosis correction and sports medicine. Three more systems are nearing release. Forty percent of its business comes from outside of the United States. It has established a Surgeon Advisory Panel that has pediatric orthopedic surgeons from Australia, Europe, Latin America, and North America. Sales in 2014 will approach $30 million.
Mark, who spent one-third of his career working in Europe and Japan, marvels at the impact OrthoPediatrics is making. “I have never seen a business where foreign surgeons come to us demanding our products in their local markets. Our international growth has exceeded our expectations, and we find strong demand everywhere we go.”
OrthoPediatrics’ goal is to take the company public in a few years, but there’s work to be done before an exit. Meanwhile, OrthoPediatrics is VisionTech Angels’ largest portfolio company and continues to benefit from our group’s involvement. Mark is happy for the help.
“OrthoPediatrics is more than a financial deal. Participating in the cause of helping children is exciting and rewarding for our investors. How often do you get the opportunity to change the lives of children around the world?”