Behind the Pick

Behind the Pick: A Pleasant Vetting Surprise

Behind the Pick: A Pleasant Vetting Surprise
By Andy Gordon
Date February 18, 2021

Last week I recommended reusable respirator manufacturer Canopy to you. My reasoning for liking this company goes far beyond meeting growing market demand. Effective masks are not a “nice to have” product. Lives are at risk. Masks are a must-have. But the available N95 masks have major flaws. Masks save lives — but only if the mask is worn and actually works. Enter Canopy. Its respirators — which are N95 alternatives — provide a snug and comfortable fit that eliminates a user pain point discouraging mask wearing. The snug fit also helps create an airtight seal. And tests have confirmed the high filtration efficiency of its masks.  

Yet, the market (as always) has the final word. And the market hasn’t spoken yet because the masks are just starting to be offered to consumers. Institutional customers — like hospital systems — have responded very favorably to the samples they’ve been given. But the proof is in the buying. And I didn’t have that level of confirmation when I made my recommendation — through no fault of Canopy’s, I should note. The early timing of its raise simply didn’t make it possible.

Overcoming doubt is part of the startup vetting process. A good investor should begin the vetting process doubting everything. Is the technology good enough? Is the leadership team smart enough? Is the market primed/big enough? And on it goes through a few dozen of these issues. 

With Canopy, I had to be convinced that the product was not just good enough, but just-what-the-market-needed good enough. What helped me get to that level of conviction was something I didn’t mention in the recommendation. That’s not unusual. When I recommend a company, I want to provide you with the most essential information. But that’s only a fraction of the total information I gather. 

In this case, I left out an article published late last year in the Harvard Business Review, called “Essential Workers Need Better Masks.” Now let me be clear. I don’t worship at the altar of Harvard or its HBR publication. But this article grabbed my attention. It was written by four experts in the medical field. None of them had even heard of Canopy. But they said that there needs to be a better mask to keep essential workers safe. They argued that — even apart from the short supply — disposable N95 masks were not the answer. They had too many problems, like requiring people to be trained to use them. And they need to be tested individually on each user to achieve the necessary airtight seal around the mouth and nose. The authors warned that without a proper fit the level of protection dramatically declines

The optimal solution was a mask made out of a stretchy material that could provide an airtight fit easily for everyone. They’d be reusable thanks to their washable plastic bodies and replaceable filters. These filters, the authors said, should be usable for up to 40 hours. (Canopy’s replaceable filters last around 480 hours but also cost more than the 40-hour filters.)

The one drawback of these elastic reusable masks? The authors said they have an exhale valve. It doesn’t filter the air breathed out by the wearer. This is a huge flaw, as infected wearers could infect those around them. I took note of the fact that Canopy’s respirator does not use an exhale valve. 

Without knowing anything about Canopy (which was in stealth at the time the article was written), the experts who penned this article described many of the features of Canopy’s high filtration reusable alternative to the traditional disposable N95 mask. The authors concluded that this kind of mask “is the most effective way to immediately protect essential workers in a wide range of industries who may be at greater risk of exposure to Covid-19.” 

One last thing. These four experts didn’t validate the product development path Canopy took. It was the other way around. Canopy spent hundreds of hours exploring what goes into the “perfect mask.” In reality, Canopy founder Joe Rosenberg and his colleagues validated the findings of these four authors. And Canopy went several steps further in making a superior respirator. One of Canopy’s most important innovations is that its filters don’t use globally scarce melt-blown textiles. And there are several additional innovations the authors didn’t mention that Canopy developed.

But the fact remains that these two entirely independent investigations into defining the perfect mask came to basically the same conclusion. And that contributed to my growing sense of conviction as I proceeded with the vetting process.

Vetting a startup is an unpredictable thing. When you begin, you never know where it ends… or how it ends… or what — if anything — gets you over the hump. And that’s the way I like it. If I did know, vetting startups wouldn’t be nearly as interesting. With Canopy, the vetting process led to a deep belief that its product is just what the market needs. 

Now you have a little more insight on why I like Canopy. And if you want to, there’s still time to invest.

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