Description
TFT is almost a "virtual" company, and currently has only three other employees, apart from Lawrence and the founders. They have decided to outsource both manufacturing and distribution, so that TFT can remain focused on research and development. The founders initially acquired the intellectual property they had developed from NHS Tayside for a share of future profits, but TFT subsequently bought out that interest for an undisclosed cash payment to the health authority, which the doctors say has been extremely supportive. Lawrence says he is confident the company's intellectual product position is robust - not least because it has been checked by the investors at each of the four rounds of equity funding. One company did try to move into the field, but backed off when warned it was infringing TFT's patents. Houston says he expects all three founders will want to remain as practising clinicians, even after TFT starts making money. "All of us enjoy what we do, we have an inherent interest in keeping the focus of the company to products that are actually going to be valuable in the marketplace," he says. "It is very offputting to see a rep come into your office to try to sell you a product that has CE approval but you think: 'I can't use that.' In other words, it is not applicable to what you do." This "virtual" company model will make TFT an easy acquisition prospect if its technology is successful, but Lawrence says there is no immediate pressure for an exit from either the founders or the principal investors, who own more than 80 per cent of the equity - Sir Tom, 3i/Quayle Munro, Scottish Enterprise and Braveheart Investors. Lawrence says a flotation is not being considered before a revenue line is established. "There may well be companies that are interested in the medical applications, but we have industrial applications as well," he says. "I'm not too sure there are many companies that do both. A trade sale is always possible, but finding someone that wanted both pieces is probably a bigger ask." The company "parked" work on possible industrial applications of its technology two years ago, to concentrate on medical products. But Lawrence says they have just started doing market testing to estimate potential demand. "We are hoping any industries that have slurry, things that gather in pipes - it could be water and waste, as well as oil and gas - could be an opportunity for us to exploit the technology. If people are prepared to partner us to do the R&D, we will look hard at that. We could license the industrial applications, or spin them out of this company." Asked how the founders would feel about losing control of their "baby", Houston sounds philosophical. "My main personal test is to get from where we started, the idea on the back of an envelope, to something that is of benefit to patients and that produces a return on the energy and enthusiasm needed to get it there."
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cardiovascular products
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