How a start-up steps up: ‘It’s not luck or guess work’
David Myton talks to Sean McCawley, CEO of Capital Markets Technologies
Sean McCawley has seen a host of start-up businesses in his time. He’s witnessed them arise in a blaze of promise and, more often than not, disappear – leaving in their wake shattered dreams, battered egos, and depleted bank accounts.
With deep experience in banking, financial planning, business strategy, mergers and acquisitions and emerging companies, the CEO of Capital Markets Technologies has a good nose for what might work and what might not.
So when he looks at the young companies under CMT’s wing, he’s as confident anyone can be that their futures are assured.
“It’s not luck or guess work – Capital Markets Technologies has a track record of having established businesses, grown them and sold them. We have credibility when it comes to start-ups,” he says.
CMT’s mission, McCawley explains, is to invest in start-up and emerging growth private companies in the financial and health technology sectors.
But it provides more than capital. Available for the companies are the extensive R&D capabilities of parent organisation CMCRC-SIRCA, which also provides access to its network of industry partners, as well as the experience and expertise of the CMCRC Board.
Unlock investment funding and intellectual capital
“We know how to help companies take ideas and commercialise them, and effectively guide them through the full growth life-cycle,” McCawley says, pointing out that CMT is looking to target investments between $1 million and $5 million.
“We work in cooperation with them to unlock investment funding and intellectual capital, to build and grow their businesses and help them connect with a partner investor.”
Companies currently in the stable are:
Lorica Health: SaaS business providing advanced analytics tools that target fraud, abuse, waste and errors in healthcare marketplaces.
CIM Enviro: Fault detection analytics SaaS platform for the built environment, identifying energy and maintenance inefficiencies in large buildings.
Ordermentum: A Bb2Bb order management and payments platform system for the food and beverage industry
InfiniGold: Digital asset platform used by The Perth Mint (GoldPassTM) – one of the world’s largest refining mints – enabling investors to trade, hold and peer to peer transfer physical gold in a digital form.
Capital Markets Consulting: Providing expert witness and consulting services to capital markets participants and regulators.
digi.cash: A digital asset platform for cash – enabling the creation of small encrypted and digitally signed computer files, that each represent an electronic coin or banknote, that can be transferred peer to peer in real time.
Smart use of data to achieve goals
“Some of them might provide the marketplace technology, while others might facilitate the sales side of the transactions, and some might facilitate analysis of data within that market place,” says McCawley, who also serves as an Advisor to InfiniGold.
One theme common to all of them, he says, is “smart use of data to achieve their goals”.
He gives as an example Ordermentum, which caters to retailers and suppliers in the food and beverage industry.
“It is in the food and beverage business, but when you look a bit deeper you see that it is a brilliant ordering and payments platform that enables flexibility of payment methods, individual customer terms, and which allows clients to take back control of their orders.”
McCawley, who in what little “spare time” he has as the father of two young boys is a qualified Crossfit and Olympic weightlifting coach, grew up in the Blue Mountains, west of Sydney.
He graduated from Western Sydney University with a Bachelor of Commerce majoring in management and law, and later took out an MBA from AGSM. He is also a Graduate of the Australian Institute of Company Directors’ Company Directors Course.
He is a “banker by trade” and has worked as an executive in strategy, mergers and acquisitions, and capital investment in institutions such as Westpac, Commonwealth and St George Banks, and also with SFG Australia.
“My job at SFG was going to see one- and two-man bands, asking ‘what’s your business do, how does it operate, where are you at’ and then make them an offer and try to get a deal done – working all the way from identifying, negotiating and completing a deal, to integrating the business into ours.”
McCawley was also a key part of the team that sold SFGA to IOOF (ASX: IFL) in 2014 for $675m.
To spot success you must be able to spot failure
On leaving the corporate world, McCawley accrued deep experience in the start-up space, first as a consultant and corporate advisor to numerous fledgling companies, as well as in a shorter than expected stint as CEO of a recently funded start-up.
He was brought in by investors to serve as CEO for a start-up “fan engagement platform” that enabled ‘1 to many’ videoconferences where up to 40 fans could speak face to face with their favourite idol or star, and then live streamed that to millions.
“We had a contract with the UFC to put pro-fighters on these ‘fancasts’ over 12 months – marketing to their social media fan bases. Seemed like a great idea at the time: now anyone can do ‘one to many’ conferences on any number of apps including FaceTime and Zoom, but back then it didn’t exist cheaply. We had a video streaming platform so you could live stream the fancast, which of course anyone can do now on YouTube.”
Needless to say, his time ended earlier than planned as the funds dried up quickly on salaries and talent sponsorships, and he recommended to his Board and investors that the business was not viable.
McCawley brings all of this corporate and start-up experience to the RV role.
‘The intersection of great ideas and great people’
“I have always had a view that I’m a ‘commercial’ person – that I can spot whether something makes sense or not in terms of can this be profitable at some point,” he says
“But even more important is the ability to read people – investment and working life in general is as much about who you are investing or working with as what you are investing or working with”.
“You meet a lot of people who pitch very well, and who are very good sales people, but can’t deliver or just want investment and won’t take advice – and sometimes it’s the unpolished person who doesn’t pitch very well, but has a great idea they are passionate about, and are willing to say ‘Please help me do this, I know I can’t do it all’ – those are often the best investments.”
What this has taught him, he says, is that “success in investment is at the intersection of great ideas and great people. You can’t do one without the other.”
McCawley says CMT’s goal is to support its companies to be as successful as possible “ultimately to deliver a return on the Group’s investment and enable the future success of the Group”.
“Their success is our success.”
View from the new – CIM Enviro
“In my opinion, two things kill growing technology companies – cash flow and a dysfunctional board. David Wright, CMT’s nominated director for our board, is our Chairman. His counsel, guidance and patience have been invaluable to our board, senior management team and to me. He has helped to facilitate an environment that has allowed others to shine, through a non-domineering thoughtful approach that focuses on process and people improvement.”