Investors Sound Off on BCI Hype, Regulatory Risk, and the AI Gold Rush

By Allison Proffitt 

April 21, 2026 | JoJo Platt of Neurotech Reports opened her panel at the 2026 Bioelectronic Medicine Forum with her own notebook open. She has an upcoming appointment to talk to Congress about brain-computer interfaces, and she wanted her panel of investors to weigh in. They didn’t hesitate: the need for regulatory sandboxes, clearer reimbursement pathways, freedom from regulation burden, and more translational grant funding. But that was just the start of a wide-ranging conversation that covered the messier realities of building and funding companies in a field that is simultaneously surging with promise and littered with the wreckage of overhyped pitches. 

The panelists — Jeffrey Scott Cohen, Director of Research at Ladenburg Thalmann & Co.; Adam Caplan, Founder and General Partner of Jumpspace Ventures; and John Propst, Co-founder and Managing Partner of Ground Effect Ventures — brought different vantage points, from public equity research to early-stage venture, but converged on a consistent message: the field is maturing fast, and founders who haven’t caught up will pay for it. 

The Policy Problem 

Kicking off the policy discussion, Propst framed brain-computer interface infrastructure as something Congress should treat similarly to semiconductor fabrication: a strategic national asset requiring patient, long-term public investment rather than being left entirely to venture timelines. He advocated for a dedicated regulatory sandbox for BCI that would give companies a defined, navigable pathway as they move beyond the initial clinical indications that have anchored most early approvals. 

“The regulatory pathway is not incredibly clear yet,” Propst said. “A regulatory sandbox for the BCI space would be good.” He also called for more funding from DARPA and SBIR. “The translational piece is going to be key and expensive.” 

Caplan acknowledged the legitimacy of ethical concerns around neural technology, but he warned that overregulation poses its own dangers, particularly given the pace at which other nations—he mentioned China specifically—are advancing in the space. “One of the greatest harms we can do at the moment is to have too much regulation,” he said, urging a global perspective when setting the policy agenda. 

Both Cohen and Propst cited clear reimbursement pathways as essential, not just for investors but for the viability of companies trying to plan years-long development programs. Without knowing how a product will eventually get paid for, Cohen noted, even strong science becomes difficult to fund. 

What Founders Are Doing Wrong 

The conversation turned sharper when Platt asked the panel to name one thing founders should stop doing immediately. The answers were specific. 

Caplan set his sights on the ubiquitous platform narrative. “Everybody’s a platform,” he said. Investors care about platform potential, he explained, but not until a company has demonstrated the “core thesis” for the first indication. Pitching the platform before proving the product is “the pet peeve for me.” 

Cohen was more visceral. “Don’t show me a Power Point image with a billion dollars in revenue in six years, because I’m going to call you back and I’m going to remind you.”   

Propst echoed the platform critique and added his own: founders routinely project enormous total addressable markets without explaining who is writing the prescription, what the sales channel looks like, or who is actually going to pay for it. 

The AI Question 

AI was not among anyone’s listed pet peeves and Platt was surprised. Neurotech and AI are at an intersection, she asserted. There is real potential value, but the field risks becoming “the next NFT” if we can’t distinguish genuine value from hype. 

Propst zeroed in on the inputs. “AI is obviously going to have a huge impact in healthcare,” he said. “But AI without proprietary signals as part of the feature set is going to be way less impactful.” When evaluating pitches, Propst said he is consistently looking for proprietary biological signals to shore up any AI claims.   

“Models commoditize over time,” Caplan agreed, “and unless you have differentiated data that others don’t have, it’s going to be very difficult to play in that space.” He pointed to a presentation from Brill Neurotech, a company developing FOS (fast optical signal) imaging, as a genuinely differentiated neural dataset that would clear his bar.  

Are the investors themselves using AI tools? Of course. Propst reports using automatically generated reports scraping clinicaltrials.gov data, IP from university tech transfer offices, and publicly available financials to flag interesting opportunities. Before every company call, Caplan receives an automated briefing that helps him contextualize a company and primes him with diligence questions before he even speaks to a founder. But those AI-assisted research steps are not nearly sophisticated enough to replace interpersonal interactions that Propst says are, “heavily weighted in an investment decision and a diligence process.”   

Cohen suggested that companies do the same AI research on themselves. “I think it’s imperative for every company to understand that the investor will be using AI to understand what’s there, Caplan said. “You should have that on yourself and understand what sorts of questions I’m going to be asking just based on that.” 

Consumer Neurotech: Skepticism All Around 

On consumer-facing neurotech, the panel was notably cool. Caplan articulated the core problem concisely: without differentiated data and a real clinical signal behind a product, consumer neurotech becomes a game of acquisition cost versus lifetime value — a fundamentally unfavorable unit economics battle. “That’s not a business I don’t think any of us want to be in,” he said. 

Cohen questioned whether U.S. consumer demand for direct-to-consumer neural devices is as elastic as many companies assume and raised concerns about the marginal clinical benefit of many products on the market.  

Propst, who spent time at Apple, offered the most sympathetic view of consumer electronics as a public health vehicle, pointing to the proliferation of wearables as proof of concept. But even he conditioned his optimism on clinical evidence and meaningful effect sizes, many of which, “are marginal at best,” he said. 

The Challenge of Transitioning to Scale 

Platt asked investors to weigh in on how companies mature within the field, specifically the transition from technical founders — PhD scientists leading a company’s early development—to CEOs with MBAs who can take those companies to scale.  

Caplan, who generally invests in pre-seed through Series A rounds, has not has to shepherd a founder transition, but says it’s on his mind when he’s evaluating companies at the earliest stages. “You want to get a sense of whether that [transition] is something that just from the demeanor and the psychology of that founder can be achieved.”  

Cohen noted that stock prices in public companies are often effectively bets on the leadership team. Engineers and inventors are not always the people investors want on the podium. “It’s kind of difficult to tell the leadership team you’re talking to that they’re not going to cut it,” he acknowledged. “It’s a tough conversation to have.” His advice to technically brilliant founders: be self-aware enough to recognize when someone else should be out front and know that it will help you and the company.  

When an audience member asked how a technical founder could better position him or herself for the challenge, the panel broadly endorsed the role of accelerators and advisors in supporting scientific founders, particularly for the commercial, regulatory, and reimbursement expertise that most researchers lack. “You should be honest with yourself and look kind of introspectively at those [skill] gaps and surround yourself with a leadership team that fills the gaps,” Propst said. “I would worry about trying to obtain all of the necessary skills as the founding CEO. I think building a strong leadership team would be a better use of time.”  

Another point the panel recommended considering as early as possible: reimbursement. Cohen called it “very, very, very important.” Caplan said a company doesn’t need to have a reimbursement code in hand at the seed stage, but it absolutely needs to have thought through the pathway. Cohen noted that without payer alignment, commercial execution costs can consume 30% to 40% of eventual revenue, and even then the company is operating at a severe disadvantage relative to reimbursed competitors. 

Looking Ahead: The Gut, Sleep, and Inflammation 

When asked in which indication areas the investors see opportunity, Propst named the gut-brain axis without hesitation. Early research suggesting that biomarkers for neurodegenerative diseases like Parkinson’s may be detectable in the gut a decade or more before symptoms manifest in the brain represents, in his view, a largely underfunded frontier. “The gut has more neurons than the spinal cord,” he noted, pointing to potential neuromodulation targets that remain almost entirely unexplored commercially. 

Caplan identified sleep as another underserved category. “Whoever can solve sleep — I think there’s just a tremendous flow-on effect to the health system broadly,” he said, expressing a preference for non-invasive approaches, maybe neuromodulation that induces sleep. He also flagged inflammatory disease as a compelling area, citing Jumpspace Ventures’ investment in SURF Therapeutics, which is pursuing non-invasive spleen modulation for rheumatoid arthritis and other autoimmune conditions, as an indication of where he sees durable opportunity. 

The State of the Funding Markets 

When Platt asked how hard it is today to raise a fund compared to three or five years ago, Cohen offered a frank summary of the private market environment: “It’s continuing to be extraordinarily difficult.” Undifferentiated teams with average ideas will face challenging conditions. The one counterweight, Caplan noted, was data presented earlier at the event showing that capital flowing specifically into neurotech has roughly doubled each year over the past several years, a signal that the category is gaining legitimacy even as the broader private investing market remains constrained. 

The implication Platt drew: “Grab the money now, while you can.”