Mike Kujak - Francis Medical

Giovanni Lauricella: 0:00
It's not right. Kujak, Kujak. What, what background is that? Polish.

Mike Kujak: 0:04
Polish. Yeah. Cool.

Giovanni Lauricella: 0:07
We good? Hi everyone. Today we are in St. Paul and I am with Mike Kujak, CEO of Francis Medical, and this is the MedTech Startup Podcast where we are about to get inside the head. The heart and the guts of this medtech entrepreneur. And so Mike, thank you very much for being here with us today. Really appreciate this. I'm glad to be here. Thank you. And I think there's no better way to start off with understanding the rest of the story by starting off with who you are. So, Mike, where are you from? How did you build your life, academia, professional life, backstory, leading up to the credibility of taking over and running

Mike Kujak: 0:45
Francis Medical as CEO? Yeah, well thanks for the question and thanks for the opportunity to participate. You know, I'm from the I'm from South Dakota, Yankton, South Dakota. Originally went to school in Vermilion, South Dakota, um, played football there, um, and I got a degree in physics and chemistry, and I thought I was going to go and pursue and get my Ph. D. In physics, started the business in college also, um, which I sold prior to after leaving college and checking out a couple Ph. D. Programs and decided not to pursue that path. And, uh, fell into pharmaceutical sales is where I started my career working for Hoffman LaRoche in, uh, Sioux Falls, South Dakota. And then from there, I did a lot of stints in the commercial side, uh, both in, um, pharmaceuticals, uh, and also, uh, in, uh, biotech, um, also. So did that and then, uh, after about 20 years in pharmaceutical sales and moving up the ranks into sales leadership and then moving into biotech, Uh, made a stint over into, uh, the, the, uh, provider side of health care and had a chance to, uh, work for a long term acute care hospital system, uh, running their entire marketing group. Had a chance to, you know, see the ugly side of, as I call it, the ugly side of health care. You know, um, you know, when people go into the hospital, you, you don't see really what's underneath, underneath the belly, so to speak. And, you know. Saw how, you know, nurses are overworked and respiratory therapists are overworked, and really got a chance to see how the insides of a hospital system worked, you know. And it gave me a lot of insight into that. Uh, and, uh, from there I branched in and did, um, worked for a CRO. Um, doing clinical research and patient recruitment. It was a large, uh, organization that did, uh, Phase 2 and Phase 3 clinical trials in the pharmaceutical and medical device space. Uh, in Gurney, Illinois and did that for about approximately four years. I was the vice president of sales and marketing and I'm on my way to be a CEO and as life has it, you know, my, we had a two year old and my wife was pregnant with our second child and I was on the road all the time and we were in Chicago and she had no support system but had a big support system back here in the Minnesota area. Uh, so I made a career choice and, uh, left that career. I was on the track to be CEO of that company and, uh, came up here and, um, tried to find a position in pharmaceutical or biotech and there just isn't. But there was this industry called medtech, which I knew nothing about or medical device. And so I started my career all over again, um, as a product manager working for American medical systems. And, uh, worked my way, you know, up in, at AMS. Uh, was there for four years, left and did a couple startups. Came back to, uh, AMS running, uh, their prostate health business. Um, and did that for seven years. And then we sold, uh, that division to Boston Scientific. Um, and then, um, went to another startup called Nyxthera, where I was the chief commercial of or chief marketing officer. And ran the international business and then we sold that company to Boston Scientific again. So, twice I managed two commercial integrations and was an employee for Boston for six months and one day. Uh, and then got the CEO, got the calling for the CEO position here at Francis Medical. And, uh, Francis Medical is a spin out, um, out of the next TheraPurchase from Boston Scientific. Which they bought in May of 2018. Um, we spun out the new co. Um, they didn't want to purchase the cancer applications to the use of water vapor or steam. But they did retain ownership in the company for that licensing agreement. And they've been a really good investor in Francis Medical.

Giovanni Lauricella: 4:49
So, thank you for sharing that. And, wrapping around where Francis Medical is a company today. So you alluded to the technology. So just a little deeper on the technology and then also, where is the company as a status today? How old is it? How many employees are there? How much funding has he raised so much or so far? Just that story of where Francis is today and we're going to deep dive into everything

Mike Kujak: 5:11
else after that. Sounds good. So we're using water vapor or steam to oblate cancerous prostate tissue. The Nyxthera developed it for the benign portion. piece that Boston bought along with the overactive bladder applications and, you know, prostate cancer is, is a very debilitating disease for men, especially when they get treated with the current therapies such as radical prostatectomy and radiation. They have horrible unwanted adverse events. We're located in Maple Grove, Minnesota. We have 35 employees. We founded the company in April of 2018. Um, I joined them in November of 18 and we closed on a, uh, 25 million series a round at that time and subsequently have, um, closed in September of 21 at 55 million series B, which will take us through August of 2024. Uh, we're going to be kicking off a 70 million series C round here real shortly at, uh, at JP Morgan. And, uh, hopefully close on that in June of next year, and that'll be really our funding to bring the product to market. Uh, we're in pivotal trials right now, uh, study, uh, studying it in, uh, prostate cancer.

Giovanni Lauricella: 6:28
So, I want to deep dive into the entrepreneurial aspect of this. Uh, hearing your story now, just to clarify, you're a first time CEO. I

Mike Kujak: 6:37
am a first time CEO.

Giovanni Lauricella: 6:38
Almost a CEO before, but this is your first...

Mike Kujak: 6:41
C. E. O. Ship. It's a great question. Um, I think the biggest part of the nuances that I learned is Finding the right people to put on your team right? You're building a football team. You don't need 11 quarterbacks, right? You need people to play in their positions and to be experts in their position. And so I believe we've built a great team around me, you know, while I've got my charge to raise money and in support my team, I've always adopted a philosophy of servant leadership, you know. And, and, and I instill that throughout the organization along with my team. You know, I went and found a, a great head of clinical affairs, and a great, um, leader for R& D, and a finance person who's my right, right arm, you know. Um, and we really take more of a team approach and a partnership approach, you know. And that's one of the, I guess the biggest things is don't hire the first person you see and take the time. Define that right person, and, and you will. You just, you don't need to do it immediately. But, sit there and think through, you know, you're building a team, and, and you don't want to have everyone, you know, marching down the same street with you. You want people to challenge you, and to have good debate amongst each other. And, um, people who have come with the experiences that I haven't had in some of these functional areas, especially something that I've learned a lot about is. We've hired a very good regulatory person and they've, they've taught us a lot and got the company to where they're at today, um, which is really the pinnacle right now in, in cancer treatment. So

Giovanni Lauricella: 8:26
the other thing is not only taking over the helm, but raising capital. And you and I were speaking earlier and you have this quote and correct me and refine it, but you basically say that raising capital is no different than salesmanship. It is. Yeah. And learning that commercial background that you've taken throughout your whole career, and then all of a sudden being tossed in the helm and saying, Okay, I got to go out and raise external capital. What was that learning process like for you? Yeah. And what did you walk into in terms of you mentioned that they started the company? I want to say in April, and you joined him in November. Yeah. So was there money already walking into the gate? Or do you just jump right into the 25 million?

Mike Kujak: 9:03
Yeah, no, there wasn't money at the gate. It was that we had a 2 million bridge to get us to my position. And also, To get us to the, uh, additional, uh, 23 million, the 2 million rolled into the 20, 25 million. But, you know, we really had to sit down and put together what our corporate strategy was and what our story was around prostate cancer. You know, we put together really a sales story, right, of, you know, we're here today and we're going to be commercial in X number of years. What are all the different milestones and things we need to deliver on? You know, and look at, you know, really, um, compartmentalizing those, those, those, that, that fundraising. The 25 million we tranched, uh, and the reason we did that is we tied certain milestones along the way. The first 25 million was used to develop our first generation technology, to get through FDA IDE approval of our pie, uh, early, early feasibility study, complete our early feasibility study. And use those results to lead into the series B. And so we had tranched it in three tranches along the way to meet different milestones along the way. We also tackled reimbursement is very important to the story and something that I did. is, um, so I started in November of 18 by May of 19. We already had a category three CPT code, and then in July I approached CMS with a new tech APC application, and they actually published what this procedure, this CPT code for our technology. So not only was it described, but it was also a payment assigned to it. And so having that reimbursement strategy laid out and having Both, you know, AMA with the CPT code and CMS with what the proposed payment should be was really important and key along with our early feasibility results to lead into a successful Series B.

Giovanni Lauricella: 11:07
Did your commercial experience push you to do that? Because we're privy to many co founders, founders, first time entrepreneurs, and sometimes they don't even spell the word reimbursement anywhere on their deck. Until they're six months away from FDA clearance. Yeah,

Mike Kujak: 11:23
that's a great question. What really led me to do that is not only observing what medical device companies weren't doing, but really my experience in pharmaceuticals, you know, when I was in, on the commercial side, including marketing, we worked very early on in the product lifecycle to not only obtain what our reimbursement strategy is, but what's our health economic story to the, to the marketplace, right? Where, where is the value? That a technology is going to bring not only to patients, but also to the health care system. And so, those experiences led me to really tackle this up early. Because I've seen, you know, many companies, you know, and I've observed it. You know, while I was working at AMS and even at Nextera. A lot of times reimbursement is thought of last. Or already when you're in your pivotal trial. But we did this before we even had a final device designed. laid out for our early feasibility study.

Giovanni Lauricella: 12:22
So it's never too early to get involved in reimbursement for your technology? It is

Mike Kujak: 12:26
never too early. So,

Giovanni Lauricella: 12:28
on the regulatory side then, are you a 510K,

Mike Kujak: 12:32
DeNova, or PMA? Uh, we're both a 510K and a PMA. So, Explain that. So one of the things that our, um, strategics, both Boston Scientific and Coloplast, who are in our cap table, Uh, said to us that having a cancer label was extremely important for their sales organizations to be able to promote on label. Uh, also there is no other cancer therapy on the market today that has a cancer label in the area of prostate cancer. So we went through five pre subs with the FDA over a period of two and a half years. It took, it took time, but eventually we got there. So our 510k pathway. We'll get us to market in Q3 of 25, and we'll have a tool claim, ablation of prostate tissue, just like all the other cancer treatments today have on the market. But we've worked with the FDA to talk about, you know, really prostate cancer, and talk about how men are treated with prostate cancer today. Really, and you know, as I mentioned earlier when we were in our discussions, that men have two choices. They can either Choose active surveillance and live with cancer in their body, and why do they do that? I myself had a father who had prostate cancer and had radiation therapy. I have a father in law who has prostate cancer today, who's in active surveillance and really should be treated. And the reason he doesn't want to be treated is for fear of having a radical prostatectomy or radiation. When you have the prostate removed out of the body, there's a high incidence of urinary incontinence and erectile dysfunction, stricture disease, other complications that that person, that man has to live with the rest of their life. And so, we had a discussion with the FDA and also used some patient advocates in our discussions with them. Who had prostate cancer, and who had a radical prostatectomy, and what their life was like, and what they went through. And, um, having that with the FDA, and talking about, you know, we should be looking at this a little bit differently. We should be looking at it like breast cancer, or any other, you know, kidney cancer, bladder cancer. In none of those examples do you remove the organ from the body. Especially if it's not impact the entire organ. You know, for example, breast cancer. If there's a, just a part of the breast, you know, that's impacted by the cancer, you do a little bit of, oh, you do a lumpectomy, you remove that tissue and you leave the breast intact. Why? And again, quality of life for the woman. Kidney, cancer, same thing. When you have kidney cancer, unless the entire organs impacted, you don't remove the entire kidney. You go in and you ablate or you, uh, do a partial nephrectomy and leave the kidney in place. Cause it's a, it's a, it's a functional organ and it's needed by the body. So why are we removing the entire prostate? So they got to think a little bit more about this and we started talking about the management of cancer. You know, once you're diagnosed as a cancer patient, you're a cancer patient for life. If you get cured or treated, you're always going to be in active surveillance or you're going to be monitored for fear that cancer may reappear. Somewhere else in the body or somewhere else in that organ. And so we got them to think more about that. And our PMA path is actually, so we will have an ablation of prostate tissue and we'll start to market the technology in the third quarter of 25. But in 27, we'll actually upgrade our indication through the PMA process to the management of prostate cancer by providing longer term data set of men.

Giovanni Lauricella: 16:18
So storytelling, salesmanship, you've talked about regulatory and reimbursement strategies. You've raised a significant amount of money in two series, Series A and Series B. So 80 all in to date. You're about to go raise a 70 million round next year in 24. But out of that two series of 25 and then 55, you said something to me earlier. You didn't waste your time for the angels and you just went straight to it. Once again, I deal with a lot of first time founders a lot of startups in general and there's this push and pull And I know that you like to mentor and deal with other startups yourself, but there's this there's this web of like Overwhelmingness of raising capital where they don't know what to do is it 500, 000 that they have to raise 2, 000, 850, 004 million and it's all these angels and you look at this cap table and it becomes cluttered with 100 or 200 people, but you seemingly had bypassed that entire process. As a first time CEO, you've had the foresight to come up with storytelling and being able to put something very logical together, probably off your commercial background. But how do you bypass dealing with angels and go straight into raising a 25 million

Mike Kujak: 17:36
series a yeah, that's a great question And I did contemplate doing that and I talked to a couple other CEOs who had of a cap table with 100 people on their cap table right in angel investors And I just scratched my head and I'm like going that's a lot of headaches you have to manage not only Currently as you're managing it, but later in life right later in the product life cycle And I just made the decision that, you know what? I might, it might take longer. I might have to knock on a lot more doors, but I'm setting myself up for future success. Because if you can get the right investors in on your cap table on the series a so and it's happened to us is all of the investors who came up with the 25 million also took down the entire 55 million too. Right. Because of the execution and the story and everything else. And, you know, you also don't have a large base of investors in having to manage also. How many are on your

Giovanni Lauricella: 18:38
cap table? Six. So you've managed a total of 80 million with six investors on your cap table. Yep. And then out of that, if you've mitigated angels... What's the style of investor that you've taken on?

Mike Kujak: 18:51
Yeah. So we have two strategics, Coloplast and Boston Scientific. Neither one of them have rights, but they're great investors and they're valuable because they have resources we can tap into, you know, from different reasons. You know, like for Coloplast, they've got a great surgical sales organization with relation, deep relationships with urologists. So we can Tap into that resource with Boston Scientific. They are very large. They're tapped into the idea ends. They have, you know, multiple sales organizations in their urology group. Very successful. Um, and they have great reimbursement resources. So we've tapped into both of those. So those are two strategic investors. We also tapped into two true VCs, both Arboretum and Arboretum. Ventures in Ann Arbor and Solis BioVentures in Chattanooga. We have a family office that was part of the Carlson Foundation called Tonkawa. And then we've got a very unique, um, another Chattanooga, uh, who we were introduced by Solis BioVentures there, the McClellan Foundation, who actually invests in game changing health care technologies that will add great value to the health care system. And they do it to raise money for their Christian organization. So any profits they make, they, um, give us grants out to establishing new churches, helping, you know, people in need, stuff like that. So all of that money they make in terms of selling companies. Uh, when they take a profit, they give back to, uh, to, to the, to people. I want to get

Giovanni Lauricella: 20:29
into investor psychology and you have corporate venture on your cap table. You have traditional institutional VCs, family offices and foundations. Was it the same pitch to all of them that got them over the line? In

Mike Kujak: 20:44
essence, it was for about the company. But really understanding what their unmet need is in their portfolio and really digging down and looking at I did a lot of due diligence and research to find out the type of companies they invest in. You know who will lead in a who will lead a B. Do they follow? Do they like to trunch their money? You know, do they have sharp elbows or not? Right? You want to have investors that all get along together because you're going to have them on your board as either board observers or, you know, board members, you know. Um, we also added two independent directors now to our board. We have Andre DeBrun, who's our lead, who was also the, the chair, um, of Francis Medical, but the chair of Mixtera. He was a great resource to bring over. And, uh, Michael Hoy, our founder, brought him over originally when they, he first founded the company back in, April of 18. And then we also have, uh, Andrew Cleland. We just recently added to our board. You know, we're at a stage right now where we need to start looking at what, you know, our series C and what our options are. And Andrew is has been very valuable in helping us navigate the next steps that we need to take as we're going into raising our series C.

Giovanni Lauricella: 22:02
So going back to your mentorship, if you think about all the entrepreneurs listening into this and watching us right now, When you think about building a board and you have the founders and then you have the investors that take those board seats. But then there's this third group called independence. That's a choice on how to build those people on properly. You just mentioned two excellent names that have joined your board as independence. What advice can you give the entrepreneurs when thinking about how to craft a board and obviously focus on the independent piece? What would you, what would you advise them to think about and how to properly execute on building that board? Because ultimately that's your boss.

Mike Kujak: 22:40
Yeah, yeah, it's a great question. Um, I did something really simple. You know, I put names on the top of an excel spreadsheet and I put down what are the, you know, strengths they bring, right? And then where are the gaps that we have of our deeds? And then I went to the investors and said, okay, here are where our shrinks are as a board. Didn't put individual names on them, right, for fear of hurting someone's feelings. But then said, here are our gaps, and then asked the board members, who are some good candidates that you have been familiar with? You know, Jan Garfinkel, our lead out of Arboretum, is on very many boards and has invested a lot in MedTech. And, you know, before long, we had a list of about a dozen potential people. And then we start. I went out on LinkedIn and started looking at their background and where they had advised and then had phone interviews with them and met with the top five candidates. And then we had board interviews with the top five candidates and we settled on the person that best fit our needs as an organization.

Giovanni Lauricella: 23:50
And what are some of the sensitivities to be from a CEO's perspective? And just once again, objectively speaking. But you know, building a board and then managing and leading a board is a sensitive challenge. Never having raised capital before, taking on CEOs for the first time, meaning your CEO ship for the first time, and then learning how to, which is also a new learned skill

Mike Kujak: 24:14
set. What's your thoughts on that? Yeah. So a couple of things, you know, I would say number one is lay out a solid plan, have your board behind a solid plan and execute. Yeah. If you execute your plan. Right. To the, to the dollars you're spending life is pretty easy as a, as a, as a CEO, meaning that you're delivering results to what they invested in and the story. Right. And it's also important to have a really strong chair to help to keep the board guiding down the street. Because every once in a while, you may start to go into the ditch, right? You get that tire into the ditch a little bit and you need help pulling it out. And so, you know, Communication is very key. You know, like some of the board members I know will have questions about the next board meeting after the deck goes out, but they won't ask it in front of the group. So I'll schedule an hour with them. Ask if you do have any questions about about the recent board deck and they they really enjoy that, meaning that they know I'm listening to him and it also gives me a preview Of what the other board members might be thinking too, so I can address those, you know, when I'm opening my opening comments in the board meeting or lay them out front to say, we'll get to those discussion points later, later in the deck when we're meeting together as a board,

Giovanni Lauricella: 25:43
I want to go back to your story. I mean, you're, you're Midwest at heart and in history. But we're now here today in St. Paul, but the company that you're running right now is based out of Minneapolis or Minnesota. Um, talk about the resources and the benefits of being here as a medtech hub. You know, we know about Boston, we know about California, there's secondary, tertiary hubs going on. But, you know, Minnesota is very well known for being part of that medtech ecosystem. What has it given you? What does Minnesota offer this

Mike Kujak: 26:16
ecosystem? Yeah, a lot. I mean, especially talent. I mean, talent is so strong here. I'm on the board of two other med tech startups, and they struggle. They're not in Minneapolis, right? One's in Dallas and struggles to find people. There's one in Tennessee struggles to find people. There's a benefit of being here. There's also, um, I'm part of a group that Steve Gedke at, uh, CardioNomics started, I don't know if you know Steve or not. Yeah. But, um, it's a small group of, um, startup CEOs, so there's about 45 of us, and it's good to get together, we get together about every other month, um, depending on the topic. We talk about all different types of things, and we'll have outside guest speakers, we'll even talk, like I talked one time about reimbursement. You know, and we all learn from each other, you know, when a position like I'm looking for a systems engineer, right, I put out, you know, to them, we're looking for a strong system engineer. Does anybody know of one and you'll get referrals. So it's this ecosystem here is really strong, you know, because there's either really strong, big companies and with operational people that you can tap into, you know, Um, or you, there's a great ecosystem of small companies that you can tap into. And, and, and I have attached myself, I have a couple of mentors myself in the industry who are multi, you know, been a CEO of a startup several times over and also came from big companies originally. And they've been very helpful to me too, to help guide my path as a CEO.

Giovanni Lauricella: 27:52
So I'm really glad that you bring that up. Cause it was a question I was going to ask you anyway. In terms of those mentors, who would you like to give a shout out to? Who are some of those mentors that have helped you get to where you are?

Mike Kujak: 28:01
Yeah, so Bob Paulson. I worked for Bob twice. Uh, once at Restore Medical, uh, and, uh, also at Nexthera. And, uh, he was very instrumental in helping me get the position. At Francis Medical, he's always been a great confidant. Uh, also Marty Emerson at Monteros. Marty, Marty's been a, a great resource for me to tap into. And then I've also tapped into Steve Blum. You know, who was the president. He's retired now, but was the president of the coloplast surgical business, and he's been a very helpful. Also,

Giovanni Lauricella: 28:34
so as I'm listening to your story, I mean, it seems like you've taken such a tactical approach to doing this, and it almost sounds too perfect. Like you got the reimbursement thing up front. It came from the commercial background which gave you some of the legs to understand what to think about early on for the long term. You have a very clean cap table, an amazing independent board. Building medical device and innovation within the medtech space, do you attribute it to luck or effort?

Mike Kujak: 29:05
Oh, definitely effort. But you gotta have some luck along the way too. And you gotta make your luck, right? If you don't know the answer to something, don't be, um, bashful or ashamed that you don't know the answer. Go out and find the resource, you know? Tap into that resource. Another resource I tap into is the Business Advisory Group at the University of Minnesota Venture Center. Has a plethora of different functional, you know, either retired or senior people that, you know, give back. And take the, look at the ideas at the University of Minnesota's coming out and advise them of where they should take it. So I would say, you know, tap into your resources. Another thing I always do, and my team knows this, and it's not that I'm interviewing to upgrade them at all. But talk to people, interview people, you know. Always look, because people have different experiences. And talking to them about their experiences, I feel like I learn so much from them also. So

Giovanni Lauricella: 30:09
I wanted to go back to the idea of having two strategics on your cap table. You mentioned some of the benefits that come from them. Yep. But I'm just going off of what I've learned from the various conversations I've had. There are different styles of structured deals, etc. You mentioned that they don't have any rights. But, you know, what are the pros and sometimes even the challenges of having corporate strategic? A part of your cap table. Mm-Hmm. and some of the, the signals that it might even

Mike Kujak: 30:38
give to the ecosystem. Yeah. Yeah. I mean, some of the signals are, as we're going out to raise the series C, we have about a half a dozen of other strategics who want to come into the series C. Right. And potentially, uh, invest. Um, you know, that's, that's a challenge to balance.'cause the last thing you want to do is upset either of the current two current strategics, right? Mm-Hmm. Um, so it attracts. It also sends a signal out to other ventures that we want to come in and lead the C round that we have two strategics that are interested in in the in the company and in the technology. So another added benefit, but you're going to have to balance that too, because you want to make sure you treat them both equally and fairly, right? And you can't bring them to one or the other too much into the tent, so to speak, right? They both have board observer seats, and they get the same information, and if they have, you know, one follow up, they get that follow up. But they have to really initiate that. We can't initiate it on our end to provide one more information than the other. So there's that delicate balance. That you want to make sure you, we don't, I don't, personally myself and my team doesn't, uh, over, cross over that line.

Giovanni Lauricella: 31:56
Okay. The other thing about the story that I found was super interesting, just for clarity, Nexthera, or Francis Medical, was a spin out of Nexthera. That is correct. Boston Scientific Bot took out Nexthera, but pushed out this cancer application, which is now Francis Medical. But now they're also an investor.

Mike Kujak: 32:21
How did that happen? Yeah, so great question. Because I get it all the time from investors, right, who are looking at the company. It's primarily because of the subject matter experts that we built in Nextera on the R& D side. We and Michael Hoy, who's our founder, he knows Vapor like no one else. And so... If, if, if I was in Boston Scientific's shoes, and I was as a general manager at the AM running Prostate Health at American Medical Systems, you want to put that top, that subject in the hands of very capable, experienced people. And so at the time, I, I, I believe, cause I wasn't a part of those negotiations of the spin out, cause I was over on the Boston side doing the, helping with the commercial integration. But they had a belief that they could invest in the company and that it would foster development of our technology much quicker than they probably could do in house. Because we had all the subject matter experts as it relates to the R& D piece of it and the technology. Um, and so that's, that's one of the reasons they not only spun it out and we licensed it for prostate, kidney, and bladder cancer, but they also, um, retained some ownership. And invested in the future

Giovanni Lauricella: 33:38
and now thank you for sharing that I wanted to take the rest of the time that we have here and just wrap up on entrepreneur psychology when we talked about earlier about the learning curves that you had of being a first time CEO, etcetera. But if we talk about the challenges or even mistakes once again, you're a mentor for many others. And you've seen a lot of other startup companies. But now you've had a very strong success of building up Francis Medical to where it is today. When you look at how companies or entrepreneurs build medical device startups, what are some of the overlapping or patterns of mistakes that you see that you were able to either mitigate or it wasn't applicable to your company, but it's in general, let's talk about

Mike Kujak: 34:21
entrepreneurship. Yeah, I would say, you know, one of the key things, and we, we, we're not perfect by no means, right? Um, pick your partners. Very wisely and go through a process and pick, you know, those partners, like from from a manufacturing perspective or development perspective, you know, we don't have software engineers on our team, but we work with a company called Interoptics, which has been a great partner. We've also worked with partners that have not been so so great and maybe don't have the best quality systems in place, and we have to. Find it out on the back end and then have to come in and repair that or fix that because it impacts us In our clinical study, so it's really important to pick the right partners And it's something we've learned and we become much better at it, but it's because we've made mistakes in choosing those partners

Giovanni Lauricella: 35:17
and in terms of leadership like for all those first time CEOs who have to be tasked with building a team and What's your philosophy of building teams?

Mike Kujak: 35:27
Yeah, get out of the way. Get out of the way. Find the right people, build a culture. I'll tell you what I did very early on at Francis. The first thing I did, well first of all the company wasn't called. Francis Medical. It was actually called Nexphase, after Nexthera. Okay. So, taking the technology to the next phase. Um, Don't let, don't let an engineer name your company. How did I get Francis then? So, uh, I went through a mission, vision, values exercise with the team at the time, based on my marketing experience. And we came up with a purpose, uh, and that is, um, you know, tough on cancer, gentle on patients. That's what our technology is. And then we came up with five core values. that we want to aspire and instill within our organization. And we came up with Francis. We went through a naming exercise and everybody put their names out, forward, and we ended up with Francis. And the reason we ended up with Francis is Francis is actually a patient. It's Michael Hoy's father, Francis Hoy, who died from prostate cancer and it was Michael's father that inspired him to develop water vapor. He just couldn't get to prostate cancer early in his career. He had to go do it in lung cancer, in BPH, in heavy menstrual bleeding, and other, and eventually Francis got founded and funded. And so there's a real story and passion behind it. You know, I mentioned that my father had prostate cancer. I mean, everyone has, knows someone who's been through, has or been through prostate cancer treatments. And so, there's really a strong, you know, value set and mission behind what we're doing. And, and, I know

Giovanni Lauricella: 37:10
I distracted you on that one, but the philosophy of building those teams again, you were talking about getting out of

Mike Kujak: 37:14
the way. Getting out of the way, yeah. And then I asked you about how Francis came about, so I'm sorry for that. Yeah, yeah, no, it's okay, but you want to get out of the way, number one. Number two, you know, I instill servant leadership throughout the organization. My job is to make sure my team has the resources and the, and the, the people and the funding that they need to get their job done right. And then their job is to make sure their teams are treated well and they have the funding and the resources to get their job done. And, and, and, and if everybody at the basic level is doing what they're doing and everybody works together, we all win together. We also do we have a check your ego at the ego at the door. It doesn't matter if I'm the CEO or I have a VP of finance or you're, you know, a mechanical engineer. We're all peers. We're all on one level. We just have different jobs to do, right? And so it's important to instill that philosophy, you know, across the organization and have open communication. We have a, you know, while, you know, we have a, an office structure set up to really help foster that communication. You know, all of our cubes are low cubes. People could pop their head up and talk across the room. It's really, really neat. We've also have mixed, you know, product development, you know, R and D with quality with regulatory, you know, sometimes you can't based on, you know, how the office is set up. But we all have an open door policy that we if you've got something to talk about. Come see me. We also do, uh, employee meetings on a quarterly basis or even more, more, more often if there's news that's going to be coming out. An informed employee base is so important that, you know, everything should be transparent to the people so that, because then they understand what our mission vision values are and where we're going. So

Giovanni Lauricella: 39:09
communication seems like a big. piece of the infrastructure of Francis Medical.

Mike Kujak: 39:14
And sometimes you may say I over communicate, but I'd rather have an informed employee than, and then, um, you know, keeping an employee, I don't know if you've ever heard of an LG that he treats me like a mushroom. So, um, I don't know if I can say this or not, but when someone treats you like a mushroom, they keep you in the dark and they feed you shit. Because that's when a mushroom grows on, right? So, so

Giovanni Lauricella: 39:40
last couple of small questions, um, with regards to the idea of if you had to tell a whole room of entrepreneurs who I'm sorry, want to be entrepreneurs who are aspiring, you know, you've been in the CEO ship now for a handful plus of years at this point. What would you tell them in terms of what to expect in taking over that helm?

Mike Kujak: 40:04
I would say you're, you're going to be working a lot of hours. Okay. Um, always the glass is half full, always, or, or, or quarter full, not three quarters empty. Always look at that glass and challenges will present themselves, but there's always a solution to a challenge. And, you know, tap people around you and listen, listen, listen, listen, um, and reach out to your resources.

Giovanni Lauricella: 40:33
And the last question I have for you is a tactical one. So it's a. Hyper unique story. Once again, six investors on the cap table, taking 25 million series a, all of them came, put their heads together, put their money together and they took a 55 million series B. It's both a huge positive signal to have investors continuously carry on. When you go out and raise the 70 million series C. Tell me about this. Is it is it still positive if all of them take it on? When is it necessary to bring on new investors for fresh blood? Is there a positive and a negative of only having the same investors? Talk about that

Mike Kujak: 41:16
whole philosophy. Yeah, it's a great question because we went through this as a board and we talked about this. Um, only two of our investors can lead and both of them have led the A and the B. So it's we're in the C. We're bringing in a new lead. Or maybe a new lead who needs to put it together with another individual. The board, I sat down with the board and said, Okay, we're doing a 70 million Series C. Is everybody signing up for that? And how much are we going to take around the table? So that I have some direction to go and figure out how do we make the gap up, right? And so, they've, you know, spoken. We're going to go out and look for a new lead to fill somewhere between 20 and 30 million. Um, you know, and, um, and then that will be, get us all the way out to, um, potentially a crossover when we need to do it prior to an IPO.

Giovanni Lauricella: 42:11
Well, I want to say I wish you super luck, but like you said, it's all about effort. So I know that you're going to have the hard work behind you to be able to go out and raise that 70 million next year. Wish you a lot of success with that. And I want to say thank you very much for joining us here today. This is the medtech startup podcast where we just got inside the head the heart and the gut of this incredible medtech entrepreneur and this is Mike Kuyak the CEO of Francis medical. Thank you so

Mike Kujak: 42:39
much. Thank you. Appreciate it. Pleasure to meet you. Pleasure to meet you

Giovanni Lauricella: 42:45
Nice thank you. Thank

Mike Kujak: 42:46
you. What do you think fun? Yeah. Yeah now

‍