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Capital Raising

A successful founder, now reinvesting in startups, explains why he likes Steve Baxter’s syndicate model

- December 4, 2020 3 MIN READ
Dr Rob McCleay
So much is written about the startup journey, but we don’t often talk about what comes next once you’ve left the business that has consumed so much of your life. 

When a founder launches a startup, they’re often laser focused on the problem they are trying to solve.

In my case, following a chat with one of my wife’s colleagues at BBQ one afternoon around how medications are dosed, I suddenly saw the opportunity to help doctors and pharmacists give the right amount of medication to each individual patient – you’re not average, and your dose shouldn’t be either! 

With a PhD in Bioinformatics, I knew there was a solution – it just wasn’t available for use in clinical practice.

This insight led me to build and then launch DoseMeRx, a precision medication dosing tool, in 2014.

Less than five years later, following two rounds of VC funding and international expansion, we were acquired by US-based Tabula Rasa HealthCare for US$30 million. 

When we started DoseMe, we were clear on our purpose – to help people and help improve the effectiveness and efficiency of medical care. That purpose was also central to our decision to exit the business, and pass DoseMe over to an established business that could rapidly amplify our impact across more and more hospitals – materially helping more patients. 

After leaving the day-to-day running of a high-growth business, as a founder you’re faced with lots of options. For me, it afforded me opportunities ranging from working with and advising other medtech startups, to even restarting my medical degree – soon to be completed.

Other common roads taken are diving into a new venture, acting as an adviser to either startups or VCs, or even beginning to invest as angel investor or as a limited partner in a VC fund.

Investment is an obvious choice for a former founder. More than most, we not only understand the risk-reward profile of startups but also the importance of funding support. To do it well, however, is an expensive and time-consuming process, requiring a range of specialist skills from data analysis and accounting, to law.

Joining with a group of like-minded founders, VCs, and investors is the natural solution to these traditional barriers – commonly known as syndicate investing.

In a syndicate, the costs of due diligence are shared amongst a group, as is deal flow (ie new startup opportunities). Most importantly, you get an amplified network effect of other investors in different areas who can not only refer deal opportunities, but importantly support the startups’ growth.

If you’re interested in this type of investment, the key is to identify a syndicate that has these skills – and the deal flow.

In my case, I joined investors like iiNet founder, Michael Malone and Opengear founder, Bob Waldie in Steve Baxter’s TEN13 syndicate.

Steve was an early-stage investor in DoseMe, so I knew both the level of support his team provides founders, and their rigorous due diligence.

Within only a few months, I invested in a startup that I would not have had the opportunity to otherwise and have been able to refer in another fintech startup.

While this has been a volatile year, it is also one that it undoubtedly going to bring a plethora of ingenious, new startup ventures and as the sector evolves, we need a continuous influx of capital, both financial and intellectual – if we are to grow the companies of the future that Australia needs to thrive.

For successful founders who want to support startups without necessarily becoming a full-time angel investor or putting a substantial amount of capital into a VC firm, startup syndicates are a great platform to give back. 

* Dr Rob McLeay was the founder of DoseMe and an investor in the Ten13 syndicated investment platform