Techrockies: What are you using the funding for?
Lee Taylor: The funding will be used to expand our four-year-old business past the organic growth stage; primary applications of the funding will be to expand our sales team, expand our marketing capabilities, and enlarge our production capacity.
Techrockies: Tell us a bit about what your firm's products are used for?
Lee Taylor: TheraTogs are “Therapy You Wear” -- the orthotic undergarment system used by thousands of clinicians to extend sensorimotor training into real life. TheraTogs are often used for clients with developmental disabilities or CNS dysfunction following brain injury or stroke. However, potential orthopedic applications are limitless, including post-operative rehabilitation.
Designed by Beverly Cusick, PT, MS, COF, TheraTogs provide a cozy, breathable, Velcro-sensitive "external skin" to which clinicians attach a customized system of straps that operate all day like external muscles. Strapping systems can reduce kinesiological and biomechanical errors, improve patient posture and function, enhance sensory input, and simplify the care of clients with severe disability.
Techrockies: Where's the idea for the company come from, and why did the team decide to find funding and develop the idea?
Lee Taylor: The founding management team consists of Beverly Cusick, PT, MS, COF and myself. Beverly has been a pediatric physical therapist for over 30 years, and is an international teacher, consultant, and expert on pediatric neuromotor development and the management of pediatric neuromotor dysfunction. TheraTogs evolved as a solution to Beverly's frustration with the limitations of therapy sessions -- she knew she could physically manipulate her patients into better posture, or better biomechanical and functional alignment, but as soon as she took her hands away, they reverted to their dysfunctional state. What she wanted to develop was a way to "send her hands home" with the patient, so that they would gain quicker and longer-lasting improvements.
She developed TheraTogs after a five-year search for a means to create, in effect, "Velcro skin" -- so that she could attach external "muscles" (in the form of comfortable elastic strapping) where needed to reinforce appropriate biomechanical effect. Once she found a material that worked, it was off to the races: founding the TheraTogs product line, and building a company around it, was secondary, really, to solving the clinical problem.
We originally took TheraTogs to market four years ago September, and grew it organically -- using our own funds, credit cards, an SBA loan, and timely loans from personal (angelic) friends -- until we were confident that the market need and the opportunity was there. Then I began pitching to various angel, venture, and life science groups, and after a long road we were able to develop the relationship with High Country Venture.
Techrockies: When your last funding was from High Country Venture?
Lee Taylor: We received bridge funding from HCV in February of this year; the first tranches of the Series A funding were banked in September. There were no previous equity investors in the company.
Techrockies: How did you come across High Country Venture, and how has the funding process gone with them?
Lee Taylor: We presented at the Western Slope Capital conference in 2004, and as a result were introduced to several of the firms that had participated in the older CAPCO program, as well as the folks at Rockies Venture Club. We also presented to several angels and the CTEK Angel group, and began receiving introductions to others in the Colorado funding community -- which included a chance to present at the Colorado Capital Conference in 2005. In many respects, we were fortunate to be seen as a model or example of the kind of small company that many organizations and resources in the state of Colorado are built to help -- along the way, we've been supported, encouraged, or constructively critiqued by just about every appropriate group in the state.
As our visibility increased, we came to the attention of HCV as they were getting the Colorado Fund application process going, and we applied as soon as they 'opened the door' for business. We were somewhat unique in the early stages of the Fund, as we are a life sciences company located in rural Colorado -- not too many of those around! -- which matched up nicely with HCV's own interests and the requirements of the VCA program. Through HCV, we also became an early client of the Fitzsimons Biotech Business Incubator, and have benefited from their research and consultation.
We've found HCV to be an excellent partner -- supportive, engaged, respectful, and, well, demanding -- in all the right ways. It's already been a very different experience than my last start-up, which was an Internet company based in San Francisco. We've executed a $1.1M term sheet with HCV and brought in a portion of the round, and are now seeking one or two additional investors to finish the Series A round at $1.8M or so.
Techrockies: How far along is the company in terms of products and development stage?
Lee Taylor: We sold the 10,000th unit recently, and are approaching the $2M mark in total sales, with annual sales of about $700,000. We have over 50 different product configurations and sizes; TheraTogs are sold through US and foreign distributors, and through research partner arrangements with clinicians and clinics in the U.S. Our challenge now is to 'scale up' and reach our full potential; to that end, we've recently added a strong VP of Sales and a Research/Education Program Manager to expand the team resources and accelerate our growth.
Techrockies: Thanks for the interview, and congrats on the funding!