It was a classic technology CEO quandary. The medical device company that Susan Hertzberg leads, BrainScope, was ready to bring its device and software to assess mild traumatic brain injury to a wider market. Unlike expensive, radiation-heavy and hard-to-schedule CT scans, BrainScope can help assess the likelihood of a brain bleed in 20 minutes while at the same time providing an assessment of the severity of a concussion. Hertzberg was hesitant to ask the company’s true-blue investors, who had been loyal through 12 years and seven funding rounds, to provide more capital or to further dilute their financial stake. Seeking a way forward, Hertzberg says, she began nonetheless talking with potential equity partners.
During the summer of 2021, a new option presented itself. Aon, a leading global professional services firm that already served as an advisor to BrainScope, introduced Hertzberg to the idea of intellectual property (IP)-based valuation and related non- or minimally-dilutive funding. BrainScope could raise money based on the value of its IP—and lenders could have peace of mind, knowing the asset was valued using Aon’s data-enabled algorithms and insured like any tangible property. After consideration, Hertzberg opted to go down the path of IP-backed lending.
BrainScope and Aon announced a $35 million IP-backed lending arrangement in the fall of 2021. The funding arrangement provides BrainScope the resources to expand its commercial footprint to reach more hospitals and connect with concussion centers enabling doctors to get rapid, objective insights about the likelihood of brain bleeds and concussions. Further, the “concussion index” capability gives clinicians the first objective, brain-based biomarker tool to track concussed patients, athletes, and military personnel and aid in determining their readiness to return to activity. With 70 million head injuries reported annually around the world, the company will be able to expand globally as well. Next-gen versions of the device show promise in detecting stroke, dementia and depression efficiently.