Illustration by C A Halpin

Writing about business on Fortewinks is unusual … but SMEs are the lifeblood of British economy.  As Forte Medical relaunches its Series A scale-up funding round, my experience of rogue investors may provide useful intelligence for others in the same position as us.

Whilst Forte Medical has something others want, oddly we are not minded to give it away; this is where danger can lie ahead for the uninitiated or trusting entrepreneur.

Forte Medical was set up specifically to realise the innovation of a diligent and caring NHS GP who saw the fundamental flaw in urine collection and analysis. My brother Dr Vincent Forte invented a HealthTech device to solve what transpired to be an overlooked but huge problem for patient health, GP waiting lists, laboratory overload and NHS finances. 

Like many businesses with a healthcare bent, it has taken many years to prove our technology, its value to the industry it serves and to the patients that will benefit from our hard work. 

Thus far over £4.5m of investment has been generated through personal crowdfunding and a trusted industry partner; family, friends and friends of friends make up our stable of shareholders, all of whom believe in our mission and have shown patience and support over the 16 years it has taken to reach where we are today.

Despite common knowledge that it takes an average 17 years for innovation to penetrate the NHS, speedy growth is what most investors look for. “You’ve taken too long,” is one familiar criticism; “You have too many shareholders,” another and “You Giovanna, will have to go, and if the business isn’t making money in 12 months we’ll sell patents, assets and know-how and close it down.” HealthTech is not a fast-buck world, as explained by Professor James Barlow in his book Managing Innovation in Healthcare, within which the work of Forte Medical is a case study.

Since Forte Medical received its first LDA Early Growth funding in 2006 my tenure as CEO has focused on completing R&D, complex product design and redesign, completing real-world trials of each improved version of Peezy Midstream and building sales now accelerating in the UK and USA. For more on this, visit our website because this article is not about what we do, but how we have struggled to find investors with integrity.

My first near-company-death experience was in 2012 when the owner of a Healthcare Locum business declared Forte Medical to have a great future. He pledged to meet the entire round at that time; knowing we were running short of funds he deposited a loan of £30,000 into our account, to be converted after a three-month due diligence period when the balance would be forthcoming. Friendly Mr Locum took at least double this time to conduct his investigative work whilst I worried … Then one fine summer’s day, all became clear.

“I don’t want to deal with all your shareholders,” he announced. “I have spoken with a friendly Administrator and arranged a Pre-Pack. All you have to do is attend a meeting, put the business into Administration, I’ll buy it and give you and your brother some shares.”

My shareholders’ interests are priority and despite the precarious position we were in, I declined this kind offer. Within two days a winding up order landed on my desk together with notices of inspection from VAT and HMRC who had coincidentally received a tip that Forte Medical was not being run properly. Prompt visits from these Government agencies resulted in a clean bill of health. Thanks to loyal and supportive shareholders, Mr Locum was repaid within days, and the required funds secured from other sources.

Another offer of investment two years later morphed into an IP-secured loan at the last minute; giving away our Crown Jewels wasn’t in my plan and this, too, was declined. This pattern was to be repeated a few years later when an investment switched into a last-minute loan; this one required shares to be issued to the value of the loan, with the loan also repayable in full at high interest once our ongoing investment round was complete. Free shares gift-wrapped in foreclosure risk didn’t put much of a spring in my step although I have been assured by other capital investment people that this arrangement is “quite normal”.

The matter of transparency has been another problem. Upon showing early sales in the USA, a young investment business there declared our ethos to touch the growing diagnostic zeitgeist for right-first-time medicine. With agreements in place and guarantees given, upon the investment deadline an e-mail was received containing apologies; it had become apparent three to four weeks earlier that his funds were needed elsewhere.

If a company seeks investment, it is to assist growth and success with the promise of financial reward when that happens. Exploiting an SME when it is vulnerable is to no-one’s benefit except the Vulture concerned who would sell all hard-earned company assets: IP on existing and new medical devices, tooling, equipment, manufacturing know-how and more. There is no integrity in screwing the SME; doing so undermines trust, reputation and the future economy, not least when as with Forte Medical manufacturing is UK based.

These and other as yet untold episodes involved much time and effort; dancing to the tune of disingenuous investors is a serious and potentially dangerous distraction for a promising SME with limited resources. What Vultures overlook is the opportunity to make money whilst saving lives. This latter point has been fundamental to my reasons for persevering through thick and thin, for so long.

With over 750 million urine tests conducted each year in the US and EU (not to mention other export territories), even at 1% of the market Forte Medical stands to be very successful whilst contributing to global public health. Our unique MedTech will soon add digital Peezy@home for personalised diagnostic care to the portfolio, meeting the need for remote point of care technology. A percentage of profit can be reinvested in new HealthTech and clinical research, creating a circle of integrity for everyone concerned not to mention benefits to the economy.

With £2.5m Series A investment needed now for scale-up, we seek healthcare-savvy investors who can assist with the identification and implementation of global licensing plans. We are also ready to develop and commercialise our pipeline of five new and unique diagnostic devices.

Forte Medical is in an excellent place; the hard work is done, evidence is irrefutable and growing sales in the UK and USA point to a beautiful future upwards curve. Now we need real investment from honest, experienced people who understand our markets and our intent. If you are that investor, if you are fair and have integrity, I would like to meet you.

(c) Giovanna Forte / Illustration C A Halpin