Melbourne Angels

Jordan Green

At a time of global crisis brought on by a medical emergency, how can one not contemplate the importance of medical technology in our immediate and long-term future?

In an era when the whole world has gone start-up crazy, should we expect to see the greatest medical innovations come to us through start-ups?

The start-up journey is prized by founders for the promise of great wealth and the chance to change the world for the better. There is much debate as to how those potentially competing drives should be balanced – doing well and doing good. Excessive greed distorts ethics, promotes immoral behaviour, and ultimately corrupts altruistic purpose. While pure altruism rarely succeeds and is almost never sustainable on its own. So we must find a balance.

In over three decades as a founder and investor in startups pursuing rapid, high-growth to change the world for the better, I have seen the challenge of balance from each side of the table. Personal ethics of founders are at the core of the culture of the organisation they build. Objectives are realised when supported by aligned values and a passion that brings life to the shared vision. Ethics and expectations of investors are embodied in the way they build a relationship with founders, the legal investment terms they choose, and the clarity with which they express and align their objectives with those of the founders.

Angel investors are private individuals investing their own time and own money in a start-up as one of a portfolio of such investments. Angels are proactive shareholders. It is this active contribution of their intellectual capital, which distinguishes them from passive investors, and it is the money from their own pocket, which distinguishes them from the fund managers.

There are many legitimate ways to invest in start-ups. Each investor decides their approach, and each founder must consciously choose the type of investor they wish to have. One of the biggest mistakes made by founders is taking investment from the first person to say yes, or taking investment from an investor with whom they do not feel comfortable. Choosing the right investors can make the adventure of growing a start-up one filled with optimism, support and success. Choosing the wrong investors can see founder dreams dashed, founder mental health destroyed, and investor funds flushed away uselessly.

MedTech start-ups should carefully consider the alignment ofinvestors with the health outcomes the company seeks to realise. The right Angel investor will be connected to the passion for and the path to the health outcomes.

In the latter half of the 20th century, when the world gave birth to the venture capital investment profession, there were more jobs than people. Start-up founders and their teams took little or no salary while they created their product or service. Today there are more people than jobs, so everyone is being encouraged to be entrepreneurial, to be innovative, and to create their own jobs by creating their own companies.The result is that start-up teams now expect to be paid competitive market-rate salaries from the outset, making funding start-ups a much more expensive proposition.

The increasing complexity of science and technology demand sophisticated resources for fundamental research, mostly found in our universities and government research institutions. Yet, the convergence of technologies, commoditisation of computing and new efficiencies in manufacturing enable much lower cost device development and delivery. So yes, we are seeing some of the best medical innovations coming to us through start-ups.

MedTech innovation is particularly relevant to get benefits to the vast numbers of human beings still living in poverty. One of the greatest innovations of the MedTech start-up phenomenon is making vital care accessible to everybody,to address every kind of disease and condition, to support first-aid and surgery. Medical technologyenables the tools and facilities to create, preserve, deliver and assess drugs, diagnostics, therapies, and their effects.

One of our portfolio companies, Livac, created a better way to retract the liver during laparoscopic surgery. Commonly known as key-hole surgery, this procedure has become the norm for many operations to reduce risk and harm to patients. Yet, the standard way to move the liver out of the way is to use a metal hook, a little like a crochet hook, to drag the soft, delicate organ out of the way. Livac developed a gentle, silicon donut that safely lifts the organ thus both, reducing the risk and leaving more space for the surgeon to work. We are very pleased with and excited about this company as it grows into the global market. However, early on, the founder did not listen to aligned investors and made some poor choices on commercial terms, most notably valuation, leading to a struggle to raise new investment and a down round along the way. The company is back on track and expected to be a huge success.

Another portfolio company, Kesem Health, developed the IUFlow, a simple device to assist with measuring and managing bladder monitoring. A meaningful innovation for the patient at home that dramatically improves both diagnosis and treatment. The founder actively partnered with his aligned investors, received multiple rounds of funding together with the personal and moral support to weather the challenges of building an internationally recognised health product company.

I am privileged to be a leader in a community of Angel investors across Asia and Oceania. We live in the fastest growing economic zone on the planet, and our communities will determine the outcomes of the 21st century. Our diverse cultures consciously blend the wisdom of traditional health practices with the efficiencies of modern medical treatments. Embracing the needs of our communities, and the wealth of skills in our populations, the teaming of inspired founders with aligned investors is driving a bright future, an inclusive future. One that can deliver superior health outcomes for everyone, as well as generating and distributing wealth more equitably than the historic economic models from which we are emerging.

About the Author

Jordan Green, founder and leader of the Melbourne Angels, is an internationally sought-after thought leader, author and speaker for early-stage ecosystems. He is an adviser to governments developing Angel ecosystems, leader of Angel communities in Australia and Asia, Angel leader in the USA, Chairs an Industry Advisory Group to the University of Melbourne where he is an Honorary Fellow, Victorian Chairman of the Pearcey Foundation, a successful serial founder, successful venture capitalist, always an Electronics Engineer and an eternal optimist. He is the 2019 Angel Investor of the Year.