The Answers are in the Crowd? (Part 2) [live from #bio2013]
This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.
A common first reaction to crowdfunding for life sciences may be to dismiss it out of hand. Given the undeniable chill in early stage funding, it is worth giving the idea a more serious look. Or, in the immortal words of Sherlock Holmes, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”
The improbable truth is that Kickstarter has helped to raise millions through crowdsourcing to fund creativity in the arts and digital sciences. In 2012 alone, Kickstarter helped to raise over $100 million for new games projects. Most recently, The Veronica Mars Movie Project closed out its Kickstarter funding campaign successfully, far exceeding its goal with pledges of over $5.7 million raised from fans in 30 days. Every Kickstarter project, though, must fit into fixed categories. Under the heading of “What is not allowed,” Kickstarter states that “Projects cannot offer financial, medical, or health advice.” Like Seinfeld’s Soup Nazi, Kickstarter has ‘no soup’ for projects related to the innovative life sciences.
So crowdfunding portals for bio-pharma and medical devices are springing up like new grass after the rain in the U.S. and overseas, hoping to replicate Kickstarter’s success. As expressed by Sarah Lacy of Pandodaily:
“Hey, it worked for watches and robots on Kickstarter. And if we can donate $100 to finance a watch we may never see or an indie movie that does little for mankind, is it so crazy to take a flier on cancer research?”
The real challenge is how to choose among the alternatives – mainly recent entrants without a track record of raising the kinds of funds needed for translational research. indiegogo, although not a science-dedicated site, may have raised the most for R&D, helping the iCancer project to raise over $150,000 (though falling far short of a $1m goal, the non-profit has received funds pledged). The most well-wired and promoted of the dedicated crowdfunding sites may be MedStartr, which has adopted the “Startr” moniker that Kickstarter began with (before adding the “e”). Other U.S.-based dedicated crowdfunding sites that are science-dedicated include Microryza iAMscientist, PetriDish (primarily natural sciences) and SciFlies. Based on my initial review of the alternatives, Microryza stands out from the crowd due to the direct experience of the founders that led to the start of the company, and with an approach that is both engaging/accessible and provides gravitas to research projects on the site.
Time will tell whether bio-entrepreneurs can leverage crowdfunding for successful fundraising, and which of the current (or future) crop may become the Kickstarter of innovative life science. Stay tuned!
Susan K. Finston is President of Finston Consulting LLC, and, together with biotechnology pioneer Ananda Chakrabarty, is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivoresearch. She is currently preparing to launch her first Crowd Funding campaign for Amrita Therapeutics first-ever therapeutic oncology medical device. For more information see AmritaTherapeutics.com or FinstonConsulting.com.