7 GTM Lessons from Building a Medical Device Company on Government Grants for 15 Years

The conventional startup playbook says raise fast, ship faster, and iterate your way to product-market fit. Mark Lehmkuhle ignored all of it.

In a recent episode of Category Visionaries, Mark Lehmkuhle, CEO and Founder of Epitel, a brain health technology platform that’s raised over $20 million, shared a go-to-market journey that challenges everything founders are taught about speed and scale. After 15 years of building on government grants, Epitel finally launched commercially four weeks before this conversation. The lessons from this unconventional path reveal critical truths about building in regulated industries that most founders only learn after burning through millions in VC money.

Lesson 1: Your Seed Round Might Be Government Grants

The biggest mistake Mark saw other founders make was following conventional fundraising advice for an unconventional business. “At the time when were grant funded, I would say that were getting a lot of bad advice of, oh, you should go through, you know, kind of seed stage investors, seed stage investors, when really our NIH grants were that seed stage for us,” Mark explains.

This realization challenges the VC-or-bust mentality that dominates startup culture. For medical devices and other highly regulated products, grants offer something venture capital can’t: patient money that doesn’t expect returns in 3-5 years. The NIH’s Small Business Innovative Research (SBIR) program became Epitel’s entire early-stage strategy, allowing them to develop technology and achieve FDA clearance “all non dilutive.”

The principle here isn’t that grants are universally better—it’s that funding strategy must match your development timeline. “Any seed stage investor is just not going to see the return on that investment for a long period of time,” Mark notes. If your regulatory path takes 10+ years, traditional seed investors are structurally misaligned with your business.

Lesson 2: Prove Regulatory Competency Before Fundraising

Epitel faced a classic chicken-and-egg problem: investors wanted proof the team could navigate FDA approval, but you need funding to reach that milestone. Grants solved this paradox.

“For us, to be interested by investors, we kind of really needed to get this product through the FDA to show these institutional investors that we could do something like this, because, again, were four engineers. None of us had ever commercialized anything ever before,” Mark explains.

This lesson applies beyond medical devices to any regulated industry where credibility with authorities becomes a gating factor for institutional investment. The framework: identify what proof points investors need to believe in your team’s ability to execute, then find non-dilutive capital to achieve those milestones before raising.

Lesson 3: Some Infrastructure Gaps Can’t Be Bought Around

When Epitel needed training data for their AI algorithm, they discovered a fundamental infrastructure problem that would reshape their timeline. Mark approached cardiology companies to understand their process: “We just purchased 30,000 EKG records that were well annotated.”

But in neurology, that infrastructure didn’t exist. “We go and we look and talking to many of these hospitals that have an epilepsy monitoring unit and things like that, and said, hey, do you have records that we could purchase?” The response: “No, we don’t have the storage for that. You know, after we record it, we enter the report into the electronic health record, and then we just delete the data because we don’t have the storage for it.”

This forced Epitel to spend years building their own dataset—”we used the wired EEG as kind of the ground truth and then trained our machine learning on our sensor data.” In hindsight, this created a defensible moat that competitors can’t buy their way around.

The lesson: some markets lack basic infrastructure that more mature markets take for granted. You can’t always shortcut this with capital—sometimes you have to build the infrastructure yourself, and that fundamentally changes your GTM timeline.

Lesson 4: Geographic Concentration Proves the Full Commercial Motion

After 15 years of development, Epitel isn’t rushing to scale nationally. Instead, they’re focusing on two geographic markets to prove every aspect of the commercial motion works. “Here’s what we can do in two geographical locations with these very limited resources. Now we’re fundraising again for our series B, what we’re calling our series B, to really then scale this nationally,” Mark explains.

This deliberate constraint forces proof of the complete cycle: “We need to demonstrate that doctors want it, they’re buying it, they’re getting reimbursed for it through traditional channels, and they’re rebuying it.”

The reorder metric is particularly crucial—it proves not just initial adoption but sustained clinical utility. For B2B products with complex stakeholder maps, proving the full cycle in concentrated markets generates more compelling data for growth fundraising than scattered national pilots that only demonstrate interest, not reorders.

Lesson 5: Multi-Stakeholder Sales Require Different Playbooks

Epitel’s complexity stems from serving two use cases with fundamentally different buying processes. In outpatient settings, “we’re selling directly to the neurologist” through a prescription model. But hospitals require navigating multiple stakeholders: “If it’s the emergency department, docs, their nurses, ultimately a neurologist is involved who’s reviewing the data. We need to show the value proposition to the hospital itself.”

This isn’t just about enterprise versus SMB—it’s about completely different decision-making structures for the same product. The lesson for multi-use-case products: don’t assume your sales playbook transfers between markets. Each stakeholder map requires its own value proposition, champions, and proof points.

Mark acknowledges this complexity is what’s “keeping me up at night” as they prove commercial traction: making sure “all of that happens is what’s keeping me up at night, especially at this point. We’re really trying the spotlights on us to perform.”

Lesson 6: Reframe AI as Enablement, Not Replacement

Physician resistance to AI is real, particularly in healthcare where “you’ll see that just about anywhere, especially in healthcare,” Mark notes. The key to overcoming this is explicit reframing around what AI replaces—administrative burden, not clinical judgment.

“Instead of spending, in our case, hours and hours reviewing EEG data where nothing’s going on, let use the AI to identify those events that you should be looking at, and then you’ll spend more time with your patients rather than reviewing this EEG,” Mark explains.

The principle extends beyond healthcare: when selling AI to professionals, lead with what tedious work it eliminates, allowing them to focus on high-value activities. “We’re not trying to replace EEG, there’s still a traditional EEG, there’s still lots and lots of use cases where you need that full montage, high resolution EEG, and then it’s an easy story to sell.”

Lesson 7: Regulation Creates Competitive Moats

When asked about getting lost in AI noise, Mark’s response reveals an underappreciated GTM advantage of regulated markets: “We’re a regulated industry. It’s a medical device, and we have to submit these, any changes that we make to the FDA. So it’s not like we’re going rogue and creating this monster that’s going to take over and tell you that you have this disease or that disease. It’s very regulated and very strict and has guardrails built into the system.”

These regulatory requirements serve dual purposes—they create trust with customers and make it harder for fast-followers to compete. Any competitor would need to replicate not just the technology, but years of FDA submissions and clinical validation.

For founders in regulated industries, the lesson is counterintuitive: the regulatory burden you’re cursing is simultaneously your competitive advantage. Lean into it in sales conversations, and recognize that what makes your go-to-market harder also makes it more defensible.

Meta Description: From an artist colony with broken heating to FDA clearance, discover how Epitel spent 15 years building wireless EEG technology that could transform brain health monitoring and early disease detection.