Examples of Crowdfunding Firms
One company on BiotechStart’s list, Crowdcube, is limited to startups in the U.K. seeking to raise a minimum of £10,000 (about $16,000), with no maximum limit, within 180 days, otherwise funders keep their money. Crowdcube announced last month its startups raised more than £2.3 million (about $3.7 million) from investors in its first year, with more than 8,800 people registered.
However, no biotech startups are among the 11 companies successfully funded by Crowdcube. And two other crowdfunding sites have maximum limits that do not offer much for a biopharma startup contemplating a decade or more of preclinical research followed by years of clinical trials. The fourth company on BiotechStart’s list, ProFounder, shut down February 17 after three years in business. “Despite our progress, the current regulatory environment prevents us from pursuing the innovations we feel would be most valuable to our customers,” co-founders Jessica Jackley and Dana Mauriello said.
The two largest crowdfunding platforms are focused on arts: IndieGoGo and Kickstarter. Of 131 technology projects seeking funding via IndieGoGo, which hosts 65,000 campaigns across 212 countries, none involved biopharma startups.
One Kickstarter-funded venture, though, may someday prove useful to the biotech industry: Hypothes.is, a nonprofit open-source platform for collaborative evaluation of information, has potential applications in peer review of scientific articles. Hypothes.is raised $105,000 from Kickstarter as part of a $230,000 first fundraising phase that drew 791 donors. Kickstarter has more than $145 million pledged toward 17,000 successfully funded projects by more than 1.25 million project backers, spokesman Justin Kazmark told GEN.
For crowdsourcing to emerge in biopharma, the amounts raised would have to be multiple millions of dollars. Then there’s the issue of who will invest, given the perpetual uncertainty about whether molecules will work plus recent concerns about regulatory red tape raised by industry and investors. Valuable as new laws may be, biopharma’s best hope for growing crowdfunding is first to grow the crowd.