Episode 13: From Wigan to the LSE – The Reality of Life as a Female CEO

0:02Welcome to the Dealmaker Uncut Podcast where we speak to some of the UK's most exciting entrepreneurs and hear their investment journeys. We'll discuss the challenges, successes and lessons they've learned along the way with expert deals commentary from Jonathan Boyers, head of Alvarez & Marcel Corporate Finance, and me, Chris McGuire, executive editor at Business Cloud. Well, welcome everyone to the latest episode of the Dealmaker Uncut podcast powered by Alvarez & Marcel. My name, as always, is Chris McGuire. I'm the executive editor of Business Cloud and I'm joined by the multiple award-winning dealmaker himself, Jonathan Boyers.

0:37Jonathan's been involved in deals totalling£5 billion plus during his long and illustrious career and he's a managing director and head of Alvarez & Marcel's corporate finance practice in the UK. Welcome Jonathan. Thanks Chris, great to be here. Now this is a trip down memory lane because we've got two Wiganers on today's panel and I'm not talking about me, this is the podcast that gets inside the deal in the first part of the show today we're going to be interviewing our very special guest then we're going to be taking a short break and you'll be leaning on your 35 years plus of experience to answer listener questions as well so Jonathan you know our special guest very well you certainly know what part of the world she hails from who are we speaking to today thanks Chris well today we're going to be interviewing Tiffany Thorne who's the CEO of Bivictrex therapeutics which at 33 she became one of the UK's youngest CEOs of a public listed company when the company entered the the AIM market and as you said she's a proud wigginer just like me so welcome Tiffany.

1:43Thank you Jonathan pleasure to be here. Tiffany I'll ask a couple of questions just to set the scene really there aren't enough female deal makers and I think we're going to get your insights on that as well. Before then I'm going to take you back and this really will be nostalgic for Jonathan. You're proud to be from Wigan, you went to Shevington High School and is it pronounced Winstanley College? Yes. Winstanley College before studying at Lancaster University where you got a first class honours in biochemistry and biomedicine. One of the things that fascinated me the first time I met you was that your grandmother was a hairdresser and there was this expectation that you'd follow in her hairdressing footsteps, is that right?

2:22That's exactly right. So my brother was the intelligent one in the family, so our family had high expectations for him. But being a young girl with blonde hair, the expectation was that I'd just take what they would class as a normal, stereotypical job in Wigan, which was a herd restaurant. I'm terrible at doing her. Okay. And you didn't go down that route. Why didn't you go down that route? Were you always strong-willed? Strong-willed, very stubborn, always wanted to prove everybody wrong, loved science. I had an excellent teacher in primary school that just really pulled out my scientific ability.

2:59Unfortunately, she died of blood cancer, actually, whilst I was at primary school and just wanted to go on and make a difference, particularly in healthcare. And that was a real, the teacher in question had a real impact on your life. As you mentioned before, she died tragically young of acute myeloid leukemia, AML. You joined the NHS became a clinical immunologist. At the age of 27 you launched Biovitrix Therapeutics. What problem were you trying to fix? So something that probably resonates with a lot of people which is the systemic side effects that we still see with chemotherapy, even what we call precision therapies.

3:35So we are taking an established drug class that is already proving to be, deliver good results in the clinic but has limitations around toxicity side effects and we've designed a next generation medicine that can actually even broaden the results that we're seeing with this drug class but make them much more safer, much more tolerable for patients to take for a longer period of time. So there's a notion globally at the moment where we're trying to turn cancer into a chronic disease that can be managed just like many other chronic conditions and doesn't have to be a death sentence. So in very simple terms for somebody, a layman like myself, when people undergo chemotherapy, and we all know people who have, it can knock them for six.

4:20They talk about that. Is what you're doing to alleviate that after effect of being on chemo? Exactly. So we have found a way, and it actually stemmed from my work in the NHS, working on clinical diagnostics. So we found a way to direct these treatments precisely to the actual cancer cells so that they avoid any effects on healthy cells. So the biggest problem with cancer therapeutic development is being able to differentiate the cancer cells from healthy human cells. But we think we found a way to do that. It's really interesting. So, I mean, from a deals point of view, I think we're following this journey right from startup.

4:59up so we haven't had many of those those conversations with people who've actually started up a business and worked through early stage funding and as we've already said you you ended up joining the aim market and that was a journey that we'll talk about but would you mind just talking about the initial when you were setting the business up there must have been a whole range of fundraising difficulties issues i'd be really interested to hear how you and how you negotiated your way through the sort of seed funding and early stage funding? So I was quite fortunate at the time. I was an employee of a company and I had a very supportive board of directors that helped me kind of draft the business plan and actually gave me permission to go out and set up the company.

5:47We actually found the startup and the initial seed capital actually quite a straightforward process. people bought into the idea and it was a concept at the time we had no data but I think people the idea kind of it was so simple I think there's this notion that some of the best ideas are the ones that are you know beautifully simple if you like so people can understand them and I think because it actually originated from techniques used in the NHS today it made it a little bit more validated a bit more believable so we actually found the initial seed raise from regional investors quite straightforward we actually had 2.3 million that was 2.3 million it was kind of tranched over the year so the initial investment was half a million and then we met our milestones we're able to draw down more capital from the same investors but we actually had to turn investors away at that initial stage this was back in 2017 right okay so and so and then you moved on to having to raise growth capital as the as the business progressed yes i'm taking it from that that that wasn't quite as straightforward that's a lot more challenging certainly is in the uk the valley of death as we call it in biotech and and it's getting worse unfortunately the current climate but that that is the more challenging capital to come by um and that's what eventually led us to taking the alternative route to IPO the company.

7:14Okay but you did raise the did you raise any more money or did you go straight from the initial seed funding to IPO? We went straight from seed to IPO yeah so I think you know particularly in biotech it's an environment where you need to take in significant amount of capital before you're going to see any revenues be generated. And so it's finding sources of capital. So our initial investors really supportive, but they had, you know, limited pockets. And so they remained supportive of the company, but they couldn't fund us on the next growth venture. So we had to be opportunistic with work to look for that.

7:56We were intending to remain as a private company, but we were approached with a deal. And when we looked at the dynamics of that deal, it made sense to go down that route. So how did you find that process then, becoming a public company? I mean, you won't be the typical CEO that people will have come across with your background from Wigan and, you know, a fairly young female, you know, how did you find all that? How did it feel? Well, it was interesting, really, because as I say, we were trying to raise money privately, and that is a very slow process in the UK, unfortunately. You know, it can take six to 12 months to complete diligence and negotiate on deal terms.

8:37So we're in the middle of that process and as I say we were approached by an advisor down in London with this opportunity which at the time I thought was madness but then when we actually started to look into it and we kind of probed the market and we saw that there was a lot of interest at the time in early stage biotech companies. I actually found the process, I was thinking it would be a lot worse than it actually was as an experience I found it even doing an IPO and we did it in record time I think six to eight weeks we had to complete the process we it was it was just far more streamlined and efficient than raising money privately so I was quite surprised and surprised with the investor uptake as well given as you say I'm not sort of the stereotypical CEO of an analistic company yeah so you you raised um about i think was it seven and a half million pounds from the we actually uh yes uh we went out and we were actually heavily oversubscribed so we were looking to raise less than five million and we actually had the appetite for 15 million and we decided to take seven and a half at the time and you and you you rang the bell at the stock exchange and um and then I started life as a as a CEO of a quoted company um just talk about about how you found that we we had um we had Steve Oliver who's the CEO of Music Magpie um on on the podcast a few weeks ago and he was talking about a lot of extra scrutiny that he found what was your experience in on that on aim it's quite interesting actually there's definitely pros and cons but the the pros which really surprised me you know you you have your own board as a private company you have a board of investor directors and therefore it's quite um you know the company can't set the direction fully um also the fundraising as I say was much more streamlined there's not a 12-month negotiation over terms the terms are fixed people make quick decisions it really helps these early stage companies or biotech companies really get on and do what's important and go and meet the milestones.

10:49I did find obviously the reporting obligations, there's a cost to that both in terms of an advisory fee cost or a financial cost but also the time and sometimes distractions from the reporting obligations but otherwise it really focuses your mind on you know what news flow is going to be meaningful to the investors. A couple of things I was going to mention, which are very personal to you. Your father tragically died of acute myelodal leukemia in 2019, age 68. So it became really, really sort of personal then. One thing that you didn't do when you listed on AIME was to look at the share price every morning.

11:32So you were really disciplined about that. So what was your thinking then and why did you do it? so I think I always think if you if you're going to get yourself into this environment which is you know obviously very pressurized and it can be exhausting mentally you've got to know yourself well and I knew that if I looked at the share price every day you can get carried away when it's going in the right direction you can get downhearted and it's going in the wrong direction so I think you know just keeping your feet on the ground remembering exactly what is important and obviously I have both a professional and a personal reason to be working in in this area so I think you know a milestone a milestone driven business like the one I'm in it's knowing what is a meaningful milestone what is going to move the needle on the value of the company and just keeping really focused on on that and just cut out the noise really.

12:27We myself and Jonathan are two middle-aged white guys hosting a podcast about deals. I'm acutely aware, as is Jonathan, in terms of the difficulties that a lot of female founders have in raising investment. And as Jonathan mentioned, there aren't many females running listed companies, let alone many females, 33 at the time, from Wigan. In fact, I think you'll probably get a blue plaque at some point in the future as well. When you opened your mouth and people heard this strong northern accent and you were a female CEO and you were talking to investors, what reaction did you get, good and bad? This is a really interesting point because one of the things that I did enjoy about being a publicly listed business is the investors that invest in those businesses.

13:18So high net worth individuals in particular, they tend to be successful business people in their own right. I don't think it had any impact I think they look they judge the person on the conviction on the resilience and I actually think coming from a working class background and sort of pushing your way forward and not being handed everything on a plate I actually really resonated with them so I found that that I had really good traction with those individuals I think where it's more of a challenge is institutional investors they have the the blueprint and if you don't fit the mold if you didn't go to the right academic institutions you're not in the inner circle I think that's where it becomes much more challenging and actually the the BIA this year had a report on women in biotech and I think there's 18 % female CEOs of biotech companies in the UK at the moment but we were only responsible for raising 8 % of the capital that was raised into the UK in the sector last year so there is a you know a problem across the UK around females not raising as much as their male counterparts with institutional investors Jonathan what's your take on that yeah so I was thinking we we um Tiff and I have a very similar background and we went to the same school and I went to Winstonley College as well um and I and I so I find that encouraging what you what you just said about the about the majority of investors I think the city um i'm i'm working in investment banking and um and it's only in the last few years really that i've got over my own imposter syndrome about coming from from a more modest background than a lot of my um a lot of my um colleagues in the industry um and and i do think that there's a need for i think there's a lot of very talented people who are not able to build careers in either corporate finance or investment or uh or in this world because it's hard for them to break through and i think social diversity is something that we should you know certainly we as we as a team are taking much more seriously about how we think we bring people into the business so i uh i can empathize with a with a lot of that um so the next step of the journey um was that you you decided to delist the business, take it private.

15:42Could you just talk about that? Because the fact that you made that decision suggests it wasn't all perfect at being a leading as a listed company or as a quoted company. So would you be able to talk to us a bit about that decision and how you did that? So the main reason behind that decision is just the uncertainty. It's quite a volatile and uncertain market for biotech at the moment globally obviously with all the geopolitical uncertainty and and it particularly hit aim quite hard so we knew we're now at the stage where we've developed assets we've got drugs that are showing to do exactly what we want them to do in the lab but we need to take them into human trials to to demonstrate that this has worth in a as a human medicine and that is a very costly exercise and the investors and the current environment on AIM we knew wouldn't allow us to raise that more significant amount of Series A capital.

16:42So it was with regret that we decided to delist and it was completely a situational factor and one of our lead investors was actually very strongly in favour of becoming a re-registering as a private company so it was really in um collaboration with our investors that um they voted that they would like us to go private it was 98 vote in favor so it was with their support and that that was just that was a delisting but did it was it done at the same time as a new fundraise or no it well it was uh done uh prior to an internal round um okay and then that's been completed so that's that was completed yes but that was done as a private fundraising round yes that's okay how and how you mentioned you hinted how difficult the investment market is at the moment which will relate to a lot of our listeners and viewers you've done hundreds of pictures of dare say i mean what's the market like just explain it for them that don't know so it's we're in quite an interesting time at the moment i mean um as i say it's a risky sector back in a biotech company and I think investors have become more risk averse because of the uncertainty around.

17:56So what we're seeing is there's still a lot of capital out there and there's still a lot of capital being deployed but investors are kind of grouping up into one company so we're seeing these mega oversubscribed deals in individual companies so there's a lot of capital going out there but the number of deals being made across the number of companies is reduced so it's it's it is a really challenging environment I think a lot of the analysts in the sector are saying it's one of the worst times for biotech just because it's been going on for so so long and then we've got other threats now coming in from you know Asia in terms of the drug development capabilities they've they've really you know risen substantially and so there's a big threat from Asia at the moment so the competition is more fierce as well.

18:43It's not an even playing field, is it? So if you look at Asia, just describe the Asian biotech sector. I mean, they're working 24-7, aren't they? They are. The work ethic is crazy. Obviously, the salaries are reduced, so they can get so much more done compared to what a Western company could achieve. And pharma are buying into it at the moment as well. They're not really innovating as much. There's a lot of R &D happening, but in our sector in particular, you know that they're making you know good medicines and as i say farmer are buying in at a reduced rate a lot of the larger sort of pharma companies are u.s based um so presumably there'll be a point where you will start engaging more with u.s investors maybe even u.s buyers for the business in due course or what you know what's happening in the u.s at the moment how do you view that?

19:40We're actually there because of the type of business and the capital that we need. We've been starting to engage with US investors and pharma over the last sort of 12 months. So I'm on a board of three and the two other directors are US-based. My CBO is US-based, so we're almost a UK registered company, but we're starting to look like a US company. but US investors even though the you know the fundraising environment over there is is still you know not not as great as it has been but they are less risk averse and actually it's a bit outdated now but there was a a report done many years ago that found that the investment managers in US VCs 60 % of them have generally worked in a business before I've been an entrepreneur before the UK in tech and biotech that's four percent so you just feel like you're talking to you know like-minded people they understand how to run a business they make quicker decisions you know they'll give you brutal feedback but it allows you to use that feedback and move on we need to become more like that I think in the UK in order to retain these these growing companies I think what's interesting about yourself as well is that you've got a real passion for wanting to change the world you know you've seen the impact on the teacher at school you had a big you know influenced your your life and obviously your father dying in 2019 as well so you've got this absolute passion to change the world but you're a pragmatist at the end of the day you're from Wigan you know you've got a limited runway as well so you want to how do you balance the two of those I think it's a combination of being you know showing a lot of conviction but being adaptable as well so the competitive landscape and the market changes all the time and that's why I said you need to be opportunistic you need to keep on top of what's happening what a farmer looking for who's our biggest competitor but you've got to show resilience as well so I think it's a combination of really knowing what is going to move the needle focusing all of your attention and resources on that cut out anything else that's as I say the noise in the background that's not actually going not add any value to the company and just remain grounded and as you say Chris I think coming from a modest background it helps with that I think as well just you know as I say it is mentally exhausting running a business where you know you have to fundraise almost every year but it's about knowing yourself as well and keeping yourself sane and I think if you know yourself you know what you mentally need it keeps you in the game and it keeps you resilient and focused.

22:19One other thing we touched on earlier in the interview was the difficulty that female founders often find it to raise money. A lot of people say to me, a lot of female founders say, you know, it's not just the difficulty in raising money, but one of the reasons why it's difficult is there are so few females on the other side of the table. Has that been your experience? Yes, definitely. And I think again, there's multiple reports out. There's, you know, particularly in the UK, I imagine it's similar in other territories as well. But there's a real lack of female decision makers at the top table in investment funds.

22:54But also it's that kind of inner circle again. I feel like it's a similar group of people that move between funds and they are the decision makers. And if you're in that circle, then you probably have an easier ride than if you're a little bit different. You come from a different place. You don't fit the blueprint. Jonathan, you've worked in the corporate finance for 35 years have you seen it change at all yeah i mean the corporate finance community has evolved dramatically um over the years i mean um the the way that deals are done now there are you know there's a lot more process um i would say the landscape is fairer for businesses i think um there's a wider range of investors the investment community is maturing certainly in the private equity community there's a lot more uh players um you know we're getting to the point where there's there's loads of competition so when you do go to market there is a lot of choice um obviously it's these days and with the market being a bit difficult there's a skill in making sure that you've attracted the right people's attention i think in the earlier stage market it's still um it's still a bit less mature and there's you know lots of different players some people are really just enhanced individuals who are who are set up as a private office or so you've got a whole range of the early stage funders to but once you get into the mid market private equity um it's quite a lot of choice now and i think that whilst the point i made earlier the social diversity is still an issue and gender diversity is definitely an issue when when i was talking about this recently um a bit my understanding having spoken to some recruitment recruiters is that less than less than one percent i think it's closer to half a percent of partners and managing directors and investment banks in the uk are women and so when we go to try and improve our gender diversity um the the only real way to do it is to grow talent um so yeah But I do think that it's less clubby than it was 20 years ago.

25:05No, it's good to hear, but there's still so much more work to do. Massive thanks to you, Tiffany. We're going to break for a short, short interval. When we come back, myself and Jonathan will be reflecting on the interview we've just done, and also Jonathan will be answering your questions. Thanks, Tiffany. It was really great to hear that story. Thanks very much. It's a pleasure to be here.

25:31welcome back to the second half of the dealmaker uncut podcast we've just interviewed tiffany thorn ceo by vitrix therapeutics what do you think jonathan well again a fascinating story and i mean this time focusing on early stage fundraising and and uh and that's a world that we've not explored properly and until this session i thought she was great um i was delighted to see how actually relatively easy it was for her to get the seed funding up and running but hasn't she done a great job developing that that business and it's obviously purpose-driven leadership she I think she's remarkable in the way that she keeps being able to raise the funding and develop that product obviously it's still got a long life ahead of it and I'll look forward to seeing how it develops but no very impressive and and as we explored from from relatively modest backgrounds background I think she's already achieved a lot and she's still very young.

26:34Yeah and it's I think when it comes to investment it's a question of following the money so the reason they went on the AIM market initially was because that's where the opportunity was to raise cash and then the reason they delisted was because it was holding them back in terms of the ability to raise money. So they're now raising again, but it's a constant battle. But one of the things I like about Tiffany is she's just so authentic and that comes out. So this next part of the podcast is entitled Ask Jonathan. It's when listeners and viewers can ask Jonathan any questions they want. First question, Jonathan, is there a lot of dry powder out there trying to find a home to invest into?

27:11So a lot of people use the term dry powder, especially in terms of private equity investment. Is there a lot of it out there? and are they trying to find a home? So what this is referring to is the fact that there's been a lot of private equity money raised by a lot of different fund managers. And while the M &A market's not been quite as strong as it has in the past for two or three years, there's accumulated quite a lot of capital that needs to be invested. And they call that dry powder. And that is right. And what this means is if you have got a high-quality business that's looking to either seek funding or particularly go through a private equity-led transaction, there is a lot of money out there.

27:59And you can get some really well-attended auctions for the right businesses. so yeah I mean I think the some of the the PE funds are seeing that the returns that they've achieved from investments made four or five years ago when the market was quite heady some of the returns are a bit lower and so fundraising just just at the moment hasn't been quite as easy so one or two of the funds that have needed to raise money have found it more challenging than than in the past but but that is partly a function of the fact that there is so much money around so so yes there is there's a lot of choice at the moment um as we talked about earlier in the in the podcast okay question two i'm in the process of raising investment it's been suggested that i should roll over a percentage of my money back into the business what's your advice probably just worth explaining even though the clues in the name what's a roll over so i think what this is talking about is when when a somebody owns a business and they decide to sell it to realise their investment, if they decide to sell the business to private equity, but they are involved in running the business, then the private equity investors will typically want to know that the founder, if they are still actively or key to running the business, will still be invested in the business.

29:22So it's often possible to take a large amount of money off the table as a founder. But normally there's a need to reinvest about 50 % of that amount back in the business. Often there's a management team that's standing up and getting more involved in leading the business. If there's a founder rolling over, they're often doing that thinking that it's the start of a succession plan. and so new management coming through will be incentivized they'll often receive sweet equity which which is basically equity that that is awarded at a much more modest um more modest price um but but yes it's a sign of commitment um the the founders are asked to roll over alongside new investors they like to see they've got skin in the game um third question and final question i was approached by a potential buyer for my business last year that was 14 months ago and we still haven't closed the deal how long should the process last and when should i be willing to walk away well this is a story that i have heard a few times recently the market that we're in has been has been a little bit nervy and so when when buyers of businesses are doing their due diligence They're very thorough at the moment.

30:48And the slightest sign of problems can mean that a small issue can become quite a big issue in the minds of the investor. And so deals can take longer. Smaller issues become magnified. I suppose the way to deal with that is usually to have a competitive process. So if you can run a process and attract a competitive environment, so you've got several bidders bidding against each other at the same time, that will normally drive not only a value to be a bit higher, but it will also drive timing. people often don't realize when you talk about having competitive tension in a process it's not just about value it is it's also about making sure that people move with pace because if you're competing with somebody to get and get an offer in and to to meet that meet certain deadlines then you're more likely to do it if you end up with a bilateral negotiation with somebody you've not run a process it's just a one-to-one negotiation very often if it's a private equity funder they'll wonder why there's nobody else around the process and they'll start to get nervous that there's something they're missing and so they'll look for another month's trading or do a little bit more due diligence to check that they're not missing anything.

32:13There is a point where businesses don't benefit from being in process so normally you'd want to be in process for as short a period as possible and sometimes you just need to decide to refocus on the business and get back to growing the business. I interviewed a female founder last week and she was saying this happened to her and that she was so focused on getting the deal over the line that the revenue of her business dropped and then they tried to chip her down on the price. Now she was so far down the process that she'd, in her own mind, sold the business and then it got to the finishing line and then they chipped her down even more and she said if If she'd done it all over again, she would have walked away a lot earlier.

32:56And it's fascinating that you're hearing stories like that as well. That's all for this episode of the Dealmaker Uncut podcast, powered by Alvarez and Marcel. The Dealmaker Uncut podcast continues to ride high in the UK podcast charts and beyond. So keep on listening. Please tell your friends and family. Final shout out to the star of the show, the Dealmaker himself, Jonathan Boyers. Thanks, Chris. And don't forget to subscribe to the podcast. Tell your friends and family and follow us on social media. Thank you very much. We'll see you next time.