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  • Writer's pictureChristina Sjahli

Scaling Your Business and Attracting Investors: How IP-Backed Financing Can be Your Growth Strategy

- The Journey of Lesley Gouldie

Scaling is fundamental to the growth of any business. It’s a crucial phase that will determine the trajectory of a company moving forward. With that comes the challenges of acquiring financing. Depending on the nature of business, it could be challenging to get support from traditional lenders. In these cases, you have to leverage your assets—and that includes your IP portfolio. With enough knowledge and preparation, you can use IP-backed financing as a growth strategy for business.

Lesley Gouldie joins us to talk about her company’s growth strategy for business and how IP-backed financing factors into the equation. She discusses why Thornhill Medical’s financing strategy focuses on an alternate commercial lender versus a traditional financier. Lesley then tackles the due diligence process in obtaining IP-backed financing in depth. Finally, she imparts critical strategies on leveraging this type of funding to promote growth and attract the right investors.

Do you want to know how you can use IP for debt financing as a growth strategy for business? Tune in to this episode to learn more!

Here are three reasons why you should listen to the full episode:

  1. Find out the difference between debt financing versus equity financing.

  2. Learn how you can prepare for IP-backed financing as a growth strategy for business.

  3. Determine critical steps in the financial planning process when scaling up.


Episode Highlights

[05:04] Lesley’s Journey

  • Lesley used to be a chartered accountant in South Africa. She then transferred to PricewaterhouseCoopers, where she worked with companies in financial difficulty.

  • This experience taught her about operations in critical situations and real-time decision-making.

  • After leaving PwC, she embarked on a series of senior financial and operational positions. Lesley became the CFO of Nelson Education.

  • Eventually, she decided to be an entrepreneur. Together with a business partner, she procured a platform called Student Awards.

  • She then exited from that field and entered the world of medical devices. She was the COO of Meditech International and is now Thornhill Medical's CEO.

[06:35] Why IP Matters to Thornhill Medical

  • Thornhill Medical is an inventor, developer, and supplier of groundbreaking medical devices. Their products are critical in delivering emergency healthcare support.

  • The company has a superior understanding of the utilization of arterial blood gases. It's where a lot of their IP resides.

  • They have three commercialized and operating devices: MOVES® SLC™, ClearMate™, and MADM™. Tune in to the full episode to learn more about these!

  • They also have a vascular reactivity investigational tool called RespirAct® RA-MR™.

  • IP has been the cornerstone of Thornhill Medical's innovation and foundation for the commercialization of its products.

[08:39] The Basics of Patents

  • Patent applications can take years and a lot of money and patience.

  • You don’t necessarily have to have a patent to produce and sell a product.

  • However, it does protect your company and your innovations as you move forward.

  • Patents are also a barrier against other companies that want to take a competitive stance in your field.

  • Sometimes, your company can opt for other methodologies such as trade secrets for sufficient protection.

[09:49] Thornhill Medical’s IP Strategy

  • Thornhill Medical was founded in 2004. Lesley joined the company in 2015.

  • There were already patent applications and existing patents before she came on board.

  • Thornhill Medical's founder, scientists, and engineers have always led the charge on patent development.

“The methodology and the history of our company is we do patents on a lot of our innovations. And that does give us broad protection as we go forward in our commercialization processes.”

[10:44] Thornhill Medical’s Financing Strategy: Debt Financing with Quantius

  • In addition to standard due diligence, Quantius considered the depth and breadth of Thornhill Medical's IP portfolio.

  • Quantius then reached a valuation of Thornhill Medical’s IP to support what they needed in their financing strategy.

  • Thornhill Medical didn’t do a third-party formal valuation. They based their figures on the opportunities addressable markets presented.

[12:49] IP-Backed Financing as a Growth Strategy for Business

  • Thornhill Medical was at an inflection point. Their growth strategy for business required additional funds.

  • Lesley first heard about IP financing when she got introduced to Quantius.

  • Quantius did a thorough job assessing their IP portfolio and overall business.

  • Thornhill Medical was then able to use the funds as a growth strategy for business.

[14:08] Why They Didn’t Get Financing from a Regular Bank

  • Thornhill Medical has a lumpy cash flow, meaning their revenue and expenses constantly fluctuate from high to low.

  • Their primary customers in 2017 were militaries. There were always unpredictable political factors influencing their decision-making.

  • Debt providers like to have a high level of certainty and predictability in the cash flow.

  • So, Thornhill Medical had to find a partner who understood the underlying dynamics of their business and their applied value.

[16:56] Debt Financing versus Series A Equity Financing as a Growth Strategy for Business

  • Thornhill Medical got a Series A equity financing within a year of securing debt from Quantius. Thus, they were able to pay Quantius off ahead of time.

  • IP-backed financing helped them in their initial growth strategy for business. It allowed them to position themselves more attractively to equity investors.

“By securing the additional financing, we were able to execute on our growth strategy. And by doing that, we were able to attract a series A investment, then secure the next level of financing to help facilitate the next stage of growth.”

  • Debt financing allows you to maintain the ownership structure. However, you have to ensure you’re not off margin requirements.

  • Equity gives more flexibility. However, it requires you to give up a percentage of your ownership.

  • The decision you make depends upon where you are in the growth curve, your comfort level with debt, and the amount of money your company needs.

[20:18] Making the Company More Attractive to Investors

  • Thornhill Medical went through a series of financing as a growth strategy for business.

  • They refinanced their traditional line of credit and got a more robust offering in another bank.

  • These different financings allowed Thornhill to execute their growth strategy for business to become more attractive to investors.

[21:02] Preparations Needed for IP-Backed Financing

  • It's critical to have your documentation in order. You should also have IP lawyers who can help you maintain a healthy patent portfolio.

“If you're going to have IP-backed financing, you want to make sure you have good, I would call it patent hygiene.”

  • Also, keep in mind that you still need to have a business plan and the traditional lender requirements in place.

  • Getting a valuation depends on the nature of your business and the market opportunities.

[23:51] Financial Planning Process During Company Hypergrowth

  • Thornhill Medical secured a ventilation order from the Canadian government. It boosted the company’s growth by more than 10 times.

  • They secured a manufacturing partner under favourable agreements to finance the exponential growth and support supply chain constraints.

  • Companies undergoing hypergrowth must have financial planning tools that can predict the speed of growth.

  • Furthermore, you must have an understanding of your cash flow. During their hypergrowth stage, Lesley looked at their numbers every single day.

“Any other company going through hypergrowth would need to have solid financial support in place to facilitate close attention to the cash flow cycle with respect to supply chain and then collection from receivables."

[26:47] The Importance of Having a Financial Background as a CEO

  • Lesley’s role as a CEO is to raise money, refinance the company, and manage financial expectations.

  • Having an in-depth financial background makes these responsibilities easier for her to execute.

[27:32] Why Startups Should Consider Working with a CFO

  • Every founder should have a financial partner like a CFO right from the beginning.

  • Not getting good financial advice at crucial points can lock you into uninformed choices.

“If you do not get good financial advice at important inflection points, you can really box yourself into a corner and be locked into choices that maybe in hindsight, you didn't want to make.”

  • Thus, founders with no financial experience must work with a part-time CFO or advisor.

  • They can double-check your decisions and act as a sounding board for your ideas.

[29:53] Lesley’s Final Advice on Scaling Strategically

  • It's fundamental to have a good team that can make quick, risk-based decisions if you’re scaling fast.

  • You also need a financial team that would take care of the scale-up financing.

  • Lesley doubled the size of her team in two weeks when they scaled over the last year.

About Lesley

Lesley Gouldie is the President and CEO of Toronto-based medical technology company, Thornhill Medical. She is a CPA with wide-ranging financial, C-Suite, and M&A experience in the areas of education, technology, and biotechnology. As an established professional, Lesley has over two decades of senior leadership experience.

Lesley leverages her strategic business sense in providing innovative solutions to complex business issues. She uses her in-depth experience in vertically integrated environments to successfully shift business models.

To know more about Lesley, you can connect with her through LinkedIn.

Powerful Quotes

“What the IP-backed financing enabled us to do was to facilitate a growth strategy and continue to develop a pipeline and to develop the business opportunities that ultimately put us in a position to make us more attractive to an equity investor.”

“Debt financing can be preferable because you don't dilute down your ownership structure. But that other hand you have to meet covenants and have very robust reporting and be very conscious of the fact that you can't be off your margin requirements.”

“Equity gives you a lot more flexibility in many respects, depending upon the nature of how that is structured. But also you then have to be prepared to give up a percentage of your ownership for that flexibility.”

“I'm not sure it's worth having a valuation, to be honest. But I think it depends on the nature of the business, how novel your technology is, and how confident you are of the market opportunity.”

“If you're going to scale fast, you obviously want to be surrounded by a really good team.”

Enjoy this Podcast?

If you want to grow and scale your company, leveraging your IP portfolio may be a good option for you. Using IP-backed financing as a growth strategy for business can also help you attract investors.

Thornhill Medical’s Lesley Gouldie shares how these guiding principles helped her company’s growth strategy for business. She also gives great advice on preparing for IP-backed financing, hiring a CFO, and scaling strategically. If you enjoyed today's episode of Her CEO Journey Podcast, then hit subscribe and share it!

Write us a review and share it! If you enjoyed tuning into the show, then do not hesitate to leave us a review. You can also share this episode with your network so they will know the importance of sound financial planning.

Have any questions about business finance? You can contact me through LinkedIn or schedule a chat with me at any time. You can also suggest topics you're curious about for future episodes to help your business grow. Thanks for listening!

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To fuelling the life you want to live,



Lesley Gouldie: I think what the IP-backed financing enabled us to do was to facilitate a growth strategy and continue to develop a pipeline and to develop the business opportunities that ultimately put us in a position to make us more attractive to an equity investor.

Christina Sjahli: As a founder or as a CEO, there are many things you have to take into consideration, and one of them is about securing financing. Perhaps at some point in your business cycle, you realized the traditional way of financing may not be the best financing structure to support your business growth. That's when you need to think outside the box. One of the reason why we create this Intellectual Property Podcast Series is to encourage you to think outside the box. We know there are different ways to secure financing. Intellectual property or IP-backed financing is one of them.

Today's guest is Lesley Gouldie, the CEO of Thornhill Medical located in Toronto, Canada. Back in 2017, Thornhill Medical entered into a financing agreement leveraging their IP portfolios. Lesley shares, among others, the reason why Thornhill Medical gravitated toward an alternate commercial lender versus a traditional lender, the due diligence process to obtain the IP-backed financing, how to leverage that financing to promote growth and attract the right investors, the different strategies to finance significant growth. If you are not located in Canada, don't jump to the conclusion that this episode is not relevant to you. IP-backed financing is not specific to Canada. You may find an alternative commercial lender within your region. Take the time to listen until the end because this episode can give you useful tips for businesses globally.

You're listening to Her CEO Journey, the business finance podcast for mission-driven women entrepreneurs. I'm your host, Christina Sjahli. If you are new here, a big warm welcome. If we are not connected on LinkedIn, please reach out and say hi, because that's where I hang out and share my business finance tips. If you have been listening to this podcast for a while, and you are a regular listener, I want you to know I appreciate you. My podcast won't be around without your support. This is a free weekly show where my guests and I want to inspires you to balance between mission and profit, to create an impact in this world, and to achieve financial equality through your business for good.

When your business is growing fast, you are not only focusing your effort on securing financing. You also need to understand where your business is going in the long run. As you listen to this episode, any type of lender would ask for a forecast. If you are at a stage where you realize you need to build a robust financial forecast but don't know where to start, we have a solution to your problem. Download the Forecasting Guide we have created for you and start creating a better and improved financial forecast. You can find the link to this guide in the show notes.

Let's say after using the forecast you think, "Hm. This guide helps, but I think it's better if I focus my time on doing what I really love, which is building and growing my business. I know business finance is important, but I don't love it." That's when we are here to partner with you. We understand building a proper and robust financial forecast takes time, accountability, curiosity, and passion for your business. Connect with us at

Now let's find out Lesley's CEO journey. Lesley Gouldie, welcome to Her CEO Journey. It's a pleasure to have you here.

Lesley Gouldie: Thank you. I'm delighted to be here.

Christina Sjahli: So before we start talking about intellectual property-backed financing, I would love to hear your journey from a chartered accountant in South Africa to CEO of Thornhill Medical.

Lesley Gouldie: Well, it has been a long journey, both in distance and in time. I qualified as a CA in South Africa, and I've transferred to the office of PricewaterhouseCoopers in Toronto. And actually spent a lot of my time there working with companies in financial difficulty. That was a opportunity that I really got my taste for operations, upgrading in very challenging and critical situations, as well as really getting a taste for real time decision-making.

I left PwC and then embarked upon a series of senior financial and operational positions, including CFO of Nelson Education, which is, or was a division of Thomson Reuters. I then decided I wanted to become an entrepreneur, and went, and in conjunction with my business partner, secured financing and procured a platform called, and I was the CEO of that until we exited from that. And then I embarked upon the journey into medical devices. I was the COO of Meditech International, and then ultimately joined Thornhill Medical.

Christina Sjahli: The reason I invited you to this Intellectual Property Podcast Series is because I know that at some point, Thornhill Medical entered into an agreement to get financing. But to provide context to my audience first about intellectual property, maybe you can share an overview about Thornhill Medical and how IP matters to your company.

Lesley Gouldie: Thornhill Medical is the inventor and developer and supplier of groundbreaking medical devices that are critical in delivering emergency mobile and remote healthcare support. We're actually a spin-off of the University Health Network. Thornhill Medical actually stands out in the medical technology field by our superior understanding of the utilization of arterial blood gases, thus, eliminating or substantially reducing the bulk waste and cost and logistical burden associated with the devices and delivery of care while optimizing our patient outcomes. This control of the arterial blood gases is where a lot of our IP actually resides. And that is our very special and unique capability.

So our technology that has been commercialized provides a lot of unique and variable solutions, including a device that's called MOVES® SLC™ that is a portable integrated life support system for casualty care during patient transport in field hospitals and in forward surgical suits. We have ClearMate™, which is a pneumatic device providing immediate and effective treatment for carbon monoxide poisoning at the scene of the incident. And MADM™, which is a device that turns any ventilator into an anesthetic workstation. So we have three devices that are commercialized an operating. And then we have an investigational tool called RespirAct® that is used around the world for research initiatives that measure vascular reactivity.

IP has been the cornerstone of our innovation, and certainly has been the foundation for the commercialization of the products that are currently in the market. And is very much I guess, the backbone of our new technology, the RespirAct®, which is currently still a research product.

Christina Sjahli: In terms of IP, a lot of them is probably patents. So how long does it take to get a patents? That can be years.

Lesley Gouldie: That's correct. It takes a long time, and a lot of money, and a lot of patience.

Christina Sjahli: Before you can produce and sell the product, do you have to receive the patent first?

Lesley Gouldie: No, you don't have to. I think there's many products that I'll say that do not have patent protection, but doesn't inhibit the commercialization process. But what it does do is it ultimately protects you and your innovation as you go forward and certainly serves as a barrier to entry for other companies that may want to take a competitive stance around what you're doing. Sometimes, there's other sort of trade secrets or methodologies that provide sufficient protection that you don't really need to go down the patent protection route. But, I guess the methodology and the history of our company, is we do patents on a lot of our innovations. And that does give us broad protection as we go forward in our commercialization processes.

Christina Sjahli: Now, when you joined Thornhill Medical, was there already an IP strategy in place at the time?

Lesley Gouldie: Oh, yes, absolutely. The company was founded in 2004. And I joined at the end of 2015. There were already a lot of patent applications that were either in process of being prosecuted or had already been awarded. So this is something that is very well-entrenched into the DNA of our company, both with our founder who has always led the charge on the patent development, and I guess prosecution, joined by various scientists and engineers that are on the team as well. So it's very much a part of our process and what we do.

Christina Sjahli: So back in 2017, Thornhill Medical enter into a financing deal with Quantius to launch new products, right? And I know this type of financing is very unique. Can you share the uniqueness of this financing deal?

Lesley Gouldie: Yes, I think what was different about that particular financing deal was that Quantius was prepared to give consideration to the depth and breadth and value of our IP portfolio in assessing the amount of financing they would make available and the security that was available then to facilitate that. So we went through a very different due diligence process from them. In addition to the standard due diligence that one would normally go through when one is engaging with the lender in terms of them evaluating both the assets available to secure the debt and the cash flow available to support the repayments of the debt, Quantius did a very in-depth evaluation of our IP portfolio. They did a lot of due diligence on it and were able to come up with a valuation on that IP to help support a financing arrangement for us to support the operations going forward.

Christina Sjahli: So the deal was basically instead of being backed up by a building or land or equipment, the deal was backed up by your intellectual properties.

Lesley Gouldie: That's correct.

Christina Sjahli: Before you even approach the lender, in this case, Quantius, did you have your own valuation?

Lesley Gouldie: We hadn't done a formal valuation by a third party. Our valuation was very much predicated on the opportunity that the addressable markets presented, and was essentially embedded in our go forward business plan or what we thought we could obtain. So when they did their valuation, they obviously came at it from a very different point of view.

Christina Sjahli: So how did you even find out about this type of financing? Did you approach like a bank first at the time or did you consider other financing deal before you find out that IP can be used for financing?

Lesley Gouldie: We were at an inflection point. We needed additional funding. So I was looking for a package of alternative financing, and I was introduced to Quantius. And it was the first time I'd ever heard of IP financing. I don't think, at that time, there was anybody in the Toronto-based market that was doing it. So I was fortunate enough to be introduced to them by a contact of mine. And we met with them and worked with them very closely, to enable them to get a really great understanding of our product portfolio. They spent a lot of time with us understanding our business. They spent a lot of time understanding our projections and our cash flows. They did a very thorough job, not only in assessing our IP portfolio, but in assessing our business as well.

Christina Sjahli: Based on my reading and my research, back in 2017, Thornhill Medical have customer in more than 30 countries. So the company was really growing at the time. But it's not as easy as someone would think for you to get financing from a regular bank. Like you had to go through like a unique type of financing to refinance your business.

Lesley Gouldie: Yeah, I mean, we have a very interesting business to secure financing for. I think the official technical term for it is called lumpy cash flow. So you can have very high levels of revenue and cash, and then very low, and very high, and very low. And you can't always predict accurately when those highs and lows are going to be. Just given the nature of our company is that, our primary customers at that point in time in 2017 were militaries around the world. It's a long sales cycle. There's always political issues influencing decision-making. You're dealing with governments. You're dealing with budgets. So it's very, very unpredictable and notwithstanding a high need and a high demand, the overline sort of macro environment in which our business is operating, at that time, just, it wasn't predictable.

And as you know, when you're dealing with debt providers, they like to have a high level of certainty and predictability in terms of when you're going to get the cash. And if we lend this to you, when are you going to pay us back? And will you have the cash flow to not only service the debt, but to pay back the debt in the timeframe that they were expecting? It's a little bit of feast or famine, which for traditional lenders, and even mezzanine financiers, they like to have steady, predictable cash flows to advance increasing levels of financing, and we were the complete antithesis of that.

So that's why we had to go the alternate financing route to come up with a partner who understood more comprehensively the underlying dynamics of our business and the underlying value that we had and were confident enough to provide that additional tranche of financing to help facilitate the growth to get us to that next level.

It is still the case with IP-backed financing, to be honest, when Quantius evaluated our business, notwithstanding the value that they attributed to the IP, they still did a very thorough job of understanding what our projected cash flow was going to be. Because they wanted to make sure that we could service the debt on an ongoing basis and ultimately meet the repayment terms.

So they had to get comfortable with our lumpy cash flow, to make sure that it met those requirements. So the cash side of our business was still a limiting factor in terms of how much they were prepared to advance us. But at least they were prepared to advance us the funding predicated on an underlying security base of the IP.

Christina Sjahli: Was this financing is like more than five years term?

Lesley Gouldie: I can't remember because we actually, we got the financing, probably within a year of securing that debt, we were able to get equity financing, a series A. So when we got to series A financing, we were able to satisfy the debt and pay it off ahead of time.