Jumpstart: Healthcare MarketMaker bridges toward Seed capital raise
Milt Capps updated May 13, 2015
Updated: May 13, 2015 - The company announced Chiromarkets, targeting chiropractors. Aug. 8, 2014: The company closed a total $65K financing involving five Angel investors, including two physicians, Corley confirmed 8 August.-Ed.
HEALTHCARE MARKETMAKER, the startup platform for buyer-seller matchups and transaction assistance, expects to close a bridge financing within two weeks, en route to a full Seed-capital round, said Founder and CEO Tony Corley.
Corley said he expects to complete a convertible-debt transaction involving "four or five" investors prior to presenting in the Jumpstart Foundry investor demo day, Aug. 21. The annual event culminates the 14-week trial undergone by MarketMaker and nine other startups.
A full-blown Seed round for MarketMaker is likely to follow the convertible-note deal, though timing and magnitude of the next raise have not been determined, he said.
The company's minimally viable product (MVP) is to emerge during 2H 2014. The venture was formed in 1Q13 and Corley went all-in in October 2013. Its model is analogous to that of online real-estate marketing platforms, which are often buyers' and sellers' first market research stops, before turning to a Realtor.
The company's plans call for offering not only an online marketplace for would-be buyers and sellers, but also transaction tools, including one that generates estimated valuations for chiropractic, dental and physical-therapy practices.
Healthcare Marketmaker will be "agnostic" in referring providers to transactions advisors, said Corley. Its first announced relationship with an advisory firm involves Brentwood-based Alliant Capital Advisors, which plans to list healthcare brokerage engagements on the MarketMaker exchange, allowing Corley's company to earn revenue from resulting transactions.
Such are the execution plans of a CEO who -- though he's new to startups -- has one of the deeper financial resumes among CEOs who have recently launched true startups in Nashville.
Corley, 45, has worked for decades assessing and advising on opportunities and challenges while working within HCA, Ernst & Young, American Retirement Corp. (later sold to Brookdale Senior Living), as well as in the business-development units of Fresenius and DSI Renal (now, DaVita), according to his LinkedIn. Prior to launching Healthcare MarketMaker, Corley devoted his energies to StrategyHealthcare LLC, his advisory business.
Corley's broad experience provided the seedbed for his current idea. "Over the years," he said, "I always noticed that [when bidding] the providers generally had a very large check and great lawyers, but doctors often did not have as good representation."
Also, he said, while medical professionals may have spent 30 years building a reputation and a practice, they have seldom had any business education or experience.
Against that backdrop, and emboldened by the example of the Zillow national real-estate platform, Corley began considering creation of a healthcare-transactions marketplace.
He currently owns the majority of the company's stock. Two Angels invested earlier this year to support standing-up the venture: Walter "Jay" Jung, an oral and maxillofacial surgeon with practices in Nashville and Baton Rouge; and, Chuck Salvo, an East Coast-based healthcare transaction advisor.
Notably, Corley's CTO, Brian Tatro, also holds credentials as president of Medical Schedule Inc., a medical-scheduling and healthcare analytics provider that offers provider referral and provider network intelligence tools.
Asked his views on debt versus equity capital raises, Corley said, "My sense of it from the early-stage startup perspective is that the character of the money you raise -- whether debt or equity -- is generally less important than the character of the investor." Convertible financing seems to be something Angel investors are comfortable with, he added.
"At this point, your ability to financially engineer a raise is somewhat limited anyway. However, you can control the advisors and investors around whom you capitalize and grow your business," he said.
Down the road, taking sufficient time to ensure that potential equity investors fit well with the company's vision and model will be very important, he noted.
Times are favorable for his startup, according to Corley. Not only are hundreds of thousands of U.S. medical professionals hitting the retirement bracket; but, also, U.S. healthcare reform seems to be producing more mergers and other consolidation or integration of healthcare practices.
VNC research found numerous potentially competitive entrants in the sector, though most seemed to operate in an advisory role, rather than offering an exchange platform. One example, focused on the dental-practice segment, is The Paragon Group, based in New Jersey.
Healthcare MarketMaker's outside advisors include attorneys with Bass Berry & Sims and with Baker Donelson Bearman Caldwell & Berkowitz; and, it banks with Bank of America, said Corley. Corley's brother, Chad Corley, is director of PR with Atlanta-based Quikrete, and provides some informal PR counsel, he said.
As a member of the current Jumpstart cohort, Marketmaker also draws on eight Jumpstart mentors, and the company resides with fellow class startups in the Nashville Entrepreneur Center. Corley, himself, is a Jumpstart mentor.
Notwithstanding his financial experience, Corley said that because this is his first IT startup, he previously went through the Nashville Entrepreneur Center's "Pre-Flight" class for those considering a startup; and, he had a class or two related to venture startups while earning his MBA at Vanderbilt's Owen Graduate School of Management.
Said Corley, Jumpstart offers even a seasoned executive a startup process that has proven successful, with mentors who help guide customer validation, price-pointing, technology builds, communications and other vital functions.
Corley and his wife -- who is a Six Sigma- and MBA-wielding executive based here with a major U.S. healthcare company -- reside in Davidson County. VNC