Physics professor shares all his lessons learned in launching two companies – “I wanted to use the research we were discovering in our lab to improve the lives of people in our community”

Maikel Rheinstädter could’ve taken a victory lap around the West Room in Alumni Memorial Hall.

The physics professor was the guest speaker at the Faculty of Science’s latest innovation and entrepreneurship dinner. Hosted by Gillian Goward, the Faculty of Science’s Associate Dean of Research, the dinners aim to build community and share expertise among established, emerging and aspiring entrepreneurs. Nearly two dozen faculty, postdocs and grad students who had applied for pre-seed start-up funding from the Faculty of Science over the past two years filled the room.

They were starting a journey that Rheinstädter’s already travelled twice – first with Synth-Med Biotechnology (he’s a co-founder and the founding CEO who’s now in an advisory role) and PentaPink Biotech (he’s a co-founder and CEO). With both companies, Rheinstädter’s translating fundamental biophysics research into next-generation therapeutics.

He could’ve turned his talk into an hour-long highlight reel of his companies’ greatest hits. Instead, Rheinstädter opted to deliver a reality check of hard truths and lessons learned. He apologized in advance for being a bit of a downer. “All of the mistakes that you can possibly make as an entrepreneur, I’ve made them all. The best mistakes to learn from are the ones made by someone else.”

Rheinstädter began his entrepreneurship journey in 2020 with Synth-Med Biotechnology, not fully appreciating how much work was ahead. “Turning an idea into a product is the defining challenge for any entrepreneur and it’s such a long way to go.”

Nothing on that journey came easily. For Rheinstädter, it meant logging100-hour weeks year after year. “I was holding down three jobs – doing my work with the university, doing the research at the heart of our start-up and learning the business of business – the hardest job of all for a scientist.”

He didn’t anticipate the avalanche of paperwork that would come his way. “In the beginning, I was signing documents that I’d read but didn’t fully understand.” It was a humbling experience, going from holding court at global conferences as an internationally recognized expert in biophysics to feeling very much like a stranger in a strange land.

And it’s a land where it can be hard to know who to trust. The world of business doesn’t share the spirit of collegiality that defines academia, or the camaraderie, loyalty and trust common to all successful research groups, says Rheinstädter. “First, you get your nose bloodied and then you’re tossed into a pool of sharks. You’re in constant survival mode.”

Rheinstädter told his colleagues to spare no expense when hiring the lawyer or law firm that will draft their start-up’s foundational documents – articles of incorporation, founder and shareholder agreements, an equity structure and capitalization table. Cheap will prove to be very, very expensive if any of that work needs to be redone.

The same holds true for hiring tax consultants – hire the best you can afford, Rheinstädter said. Even the most punishing comprehensive exam pales in comparison to the experience of opening the books and having your start-up’s financials audited.

And don’t be fooled by what you’ve seen on Dragon’s Den, warned Rheinstädter. Hold off on bringing in investors for as long as you possibly can, especially in the early days when you’ll be tempted to trade large equity stakes for small but essential cash infusions. Create an investment strategy as early as possible and then stick with it. Take full advantage of university and government start-up funding that doesn’t require equity stakes in return. “If you’re not careful, you can quickly dilute your equity and wind up losing control of your company and being forced out.”

While mistakes were made, Rheinstädtergot three things right that have made a huge difference.

Andrea Rheinstädter agreed to help out her husband, bringing her business acumen to both Syth-Med Biotechnology as an administrator and PentaPink Biotech where she’s a cofounder and chief administration officer. “I could not have done any of this without Andrea. You need to build business and legal intelligence into your company right from the start. You may be good in a lab but that doesn’t mean you’ll be good in business. Fortunately, others – like Andrea – are very good at business. Working with people you trust cannot be stressed enough.” He added that it also makes those 100-hour weeks a little easier when your spouse is in the trenches with you and helping to deliver after-dinner talks.

Rheinstädter says he was happy to sign partnership agreements with McMaster – having the university’s support made it far easier to attract co-founders, advisors and investors.

And he embraced entrepreneurship for the right reason. “I wanted to use the research we were discovering in our lab to improve the lives of people in our community.”  Synth-Med Biotechnology’s mission is to save millions of lives through precision drug delivery to the brain and tumours, transforming the fight against Alzheimer’s disease and prostate cancer.  PentaPink Biotechnology is commercializing a revolutionary platform for synthesizing novel, enzyme-resistant oligonucleotides, with the potential for more effective, durable and safer therapeutics for a wide range of diseases.

There came a point in his career where publishing yet another research paper did little to motivate Rheinstädter. “After you’ve put out 160 papers, it’s hard to get the same kick out of publishing the 161^st paper.” But finding a way to improve the quality of life for cancer and Alzheimer’s patients and their families? That was all the motivation he needed to log all those 100-hour weeks and swim with sharks.

Having a real-world impact was the key point hammered home by Rheinstädter throughout his dinner talk and during a follow-up conversation in his office on a Friday afternoon. “No one cares if you’ve come up with a novel idea that may have interesting applications. No one cares how many papers you’ve published or how many talks you’ve given. No one is investing their time, talent and treasure in you or your ideas – they’re investing in a game-changing product that’s exponentially better than any of the products already on the market.”

Be ruthless when culling ideas in your research group, Rheinstädter said. “Be brutally honest with yourself and your team. Will this idea have an impact? Is it significant? Will it leave a legacy? Can we actually deliver on what we’re promising or are we just blowing smoke?

“As scientists and researchers, we need to put our egos to the side. It’s no longer about us and it’s no longer about the novelty or the brilliance of our ideas. It’s all about doing something that will make a real and meaningful difference in the world. Knowing exactly how your work will help others is the only way you’ll be successful.”

So does Rheinstädter have a third start-up waiting to be launched from his lab? While he doesn’t say no, he points out that he isn’t getting any younger. His kids have inherited their parents’ entrepreneurial spirit and have their own start-up companies that could use some sage advice. And he wants to help other entrepreneurial faculty, students and staff.

“There are so many hardworking and ambitious people with great ideas who are about to make the same mistakes that so many entrepreneurs make. We started out with no advice and had to figure it out all by ourselves. It would be a privilege to help set them up for success right from the start.”