Pt. 1 Conversations with Ananth Natarajan
Dr. Ananth Natarajan is a physician and engineer specializing in the utilization of advanced technology to solve pressing clinical problems. As a member of the Pasadena Angels, he brings extensive experience in the healthcare field to bear on emergent business opportunities.
Dr. Ananth founded Infinite Biomedical Technologies, LLC (IBT) in 1997 and served as the Chief Executive Officer of the company for over ten years. IBT is a medical device company, develops and supplies neurodiagnostic monitoring instruments for clinical care, research, and field setting applications.
Dr. Natarajan received his BSE in Biomedical Engineering and Electrical Engineering from Duke University at age 18, with Distinction. He received an MSE in Biomedical Engineering from Johns Hopkins University and his MD from the University Of Chicago Pritzker School of Medicine, and he completed his residency training in Obstetrics & Gynecology at the University of Southern California.
He lives in San Marino with his wife Margaret and their twelve-year old son, Ajay. In this lively conversation, he describes his involvement with the Pasadena Angels and his core belief in the power of innovation to accelerate positive change.
Q. What aspects of the Pasadena Angels strike you as unique?
AN: It’s a singular team with experts from many fields. And it’s part of a wider network, a web of relationships between associates with complementary skillsets and experience that we can call on when we want to make something happen.
We all have our areas of specialization and find creative ways to work together. For example, manufacturing is not my focus, but we have team members who know it firsthand. We each have our own expertise to offer. On a recent deal, for example, I happened to bring some specialized expertise. I found it interesting and reassuring how the financial due diligence has already been done before I became involved. And because that phase of the planning had already been facilitated with expert guidance, I could focus on the next phase considering any investment strategy with complete calm and focus.
Additionally, I have noticed that many angel investors are also involved in philanthropic activities. There is a clear intention to do good things. When that happens, a lot of opportunities come back to you. It only works if you really care about what you’re working on. It’s not something that can be faked. But you do get that benefit, and that’s great. There are no limits to what we can accomplish together.
Q: How do you determine when an opportunity is right for the Pasadena Angels?
AN: One thing we strive for is making sure that the deal is a good fit for both the investor and the entrepreneur. It has to be a win for both sides to work. We also want to make the process valuable and informative for applicants, whether or not we ultimately decide to invest in them.
For example, we recently considered a company that had approached us, and decided it was too early in their development for us to get involved. It simply was not the right time. But we gave them an entirely new path on how they could approach their trials, and of course, the door remains open to them. So, the pitch process should help everyone clarify his or her aims and current position, even if it’s not yet the right time to invest. We had a long talk with them and identified their issues and concerns. We weren’t able to come up with a financial model that would make sense for all the parties. But even when that became clear we still spent an hour and a half with 10 men and women from the angel community who are very knowledgeable about a lot of different areas, and provided as much guidance and feedback as we could possibly provide.
The result was that the co-founder felt that, although he did not get the money he was after—yet—he left with a lot of knowledge that he can hopefully use, and with an invitation to come back once the core issues with that particular company have been solved. So, in a sense, we’ll go the extra mile to counsel and advise based on our expertise, and that can be very valuable to start-ups. I would have found advice like that invaluable when I was looking for funding.
Q. So the pitch is more of a collaborative process, in your view?
AN: That’s right: the pitch is an opportunity for both sides of the deal. Investment is not just about injecting money into something. We’re willing to invest our experience and energies into nurturing businesses as much as any sort of capital investment we might offer.
Q. How did you become an Investor with the Pasadena Angels?
AN: I trained as a physician and an engineer. I had no business background, but I had an interest in developing technology that would help patients. I had a team out of John Hopkins that all really felt the same way: they wanted to do something that would be socially meaningful.
We started the company and raised a lot of federal funding: we knew how to do that. We had seven figures in funding by the time that I finished my residency.
We didn’t have any need for external capital, but I realized our company needed help from a business standpoint.
I brought in some advisers, one of who was Bruce Blomstrom, who was a member of the Pasadena Angels. Along with those individuals, they helped us to transform the company into an efficient operation that could get help people by getting our products to patients. All in all, I’m very proud of what we have accomplished.
When it was clear that we had enough funding— and, I believe, the right knowledge about how to give back to the community— I joined the Angels. That was 10 years ago. I wanted to give back to other companies that I felt could benefit from my business experience and my experience in building more than one company.
Q. What do you enjoy most about being a member?
AN: It’s been a lot of fun. I’ve met a lot of great people. If you’re going to build companies in the Southern California area—being part of Pasadena Angels—it’s really great to be central to the ecosystem.
I think there a lot of people like me, who have built businesses and have become angels. Honestly, if I were an entrepreneur, I would want to know that the cheapest and simplest way to get truly expert advice is to pitch to the Angels.
Because whether you get funding or not, you will get a lot of really good advice that you might not have gotten otherwise. You never know where unseen opportunities might take you: there are people who don’t get funded by the Angels, and yet they develop a relationship with our members, and sometimes it may lead to funding separate from Pasadena Angels.