In this chapter, we focus on the role that innovation plays in the medtech ecosystem, including how innovation is financed by early-stage venture capital investors and valued by other stakeholders in the ecosystem. Using specific case studies and empirical data, we review the impact that innovation has on medical device companies’ revenue growth through market expansion and derivative product sales, and the ways in which medical device companies are valued by early-stage venture capital investors, public market investors, and strategic acquirers. In addition, there is a focus on the types of medtech product and service innovations that have driven the greatest value in the market, and the process of developing new technologies from ideation and invention to clinical evidence generation and regulatory approval, and then all of the way to widespread market adoption.