RAFT & Smart Matrix Ltd

Charity and Commerce working together to make a difference

Leonor Stjepic

CEO, RAFTCEO, Smart Matrix Ltd

RAFT

• Founded 25 years ago by 4 Consultant Plastic Surgeons

• Aim - to bring scientists and Plastic Surgeons together to develop solutions to clinical problems

• Biomaterials, stem cells, prosthetics

RAFT’s Values

1.Team and teamwork

2.Flexibility

3.Professionalism

4.Entrepreneurial approach

5.Innovation

Valley of Death

• Smart Matrix™ needed to get to market

• RAFT, the Charity was not able to take

the commercial route to achieve this

• RAFT was not able to fund the clinical trial this process

The Future for Smart Matrix™- Mothballs or Patients?

Options:

• Scrap the Project - unacceptable

• Find a buyer – too early stage

• Find a collaborator – recession

Where next?

1. Could RAFT raise the funds for commercialisation?

2. Should RAFT be spending donations commercialisation?

3. Where would it leave the IP? 4. Is this something a charity should

be doing?5. What was the alternative?

What we needed to ask ourselves

Our Light Bulb Moment!

Set up an independent biotech company...

Smart Matrix Ltd was born in August 2010

BUT

It took 12 months to create

As well as the typical work required to set up a company, we also needed:

• Permission from Charity Commission

• Permission from RAFT Trustee Board

• A very complex conflict policy created

• Buy-in of RAFT donors who had funded this research to the tune of £1.7m

• A unusually robust business plan given RAFT’s charitable status

Why 12 months?

“That’s not the normal way to do it”

• Smart Matrix Ltd set up as commercial

company - venture philanthropy framework

• Highly engaged partnership between Raft (Charity) & Smart Matrix Ltd (Company)

• Maximising investor’s social impact rather than traditional return on investment

• Virtual company – only 1 employee

• Smart Matrix Ltd – founded on same values as RAFT

• RAFT CEO also CEO of Smart Matrix Ltd (investor requirement) but remains a RAFT employee

•RAFT shareholder of Smart Matrix Ltd

• Charity & Company both benefit at the same time

• Close relationship rather than hands-off licence

Differences and Similarities

Differences between RAFT and Smart Matrix Ltd

Similarities between RAFT and Smart Matrix Ltd

1. Not for profit v for profit2. Funded by donations v

funded by investors

1. Values: teamwork, flexibility, professionalism, entrepreneurial approach, innovation

2. Shared team members3. Focus on delivery4. Interest in social impact5. Equity in Smart Matrix

Ltd

Challenges• Managing academic scientists in a commercial

setting - who are not paid by the company

• IP vs publication of papers

• Managing potential conflicts of interest

• Learning curve for everyone in the charity

• Having a very diverse set of stakeholders to manage

• Much more public scrutiny due to charity link

• Changing the mindset

Benefits - RAFT• RAFT’s research will get to patients –RAFT’s charitable mission• Roll out model with other research projects to benefit patients•RAFT benefits financially & can carry out more research – creating a virtuous circle• RAFT becomes even more financially secure• Professional development of all RAFT staff is enhanced through relationship with Smart Matrix Ltd• Leveraging the company’s contacts

Benefits – Smart Matrix Ltd

• Smart Matrix Ltd was set up thanks to a high level of pro-bono support

• Smart Matrix Ltd has access to further research being done at RAFT – which could enhance the product and their investment even further

• Investors enthusiastic about social benefit

• RAFT’s 25 year expertise enhances the expertise within the company

•Leveraging the charity’s contacts

RAFT & Smart Matrix Ltd

Charity and Commerce working together to make a difference

Leonor Stjepic

CEO, RAFTCEO, Smart Matrix Ltd