Crowdfunding in Biotech
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My presentation from Biotech Umeå on January 30, 2014
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Crowdfunding in Biotech
- 1. Crowdfunding in Biotech: problems and possibilities CLAIRE INGRAM, STOCKHOLM SCHOOL OF ECONOMICS ROBIN TEIGLAND, STOCKHOLM SCHOOL OF ECONOMICS
- 2. Crowdfunding in Sweden Dr. Robin Teigland Associate Professor Stockholm School of Economics robin.teigland@hhs.se @robinteigland Claire Ingram PhD Student Stockholm School of Economics claire.ingram@hhs.se @Claire_EBI
- 3. A true story That made 2 million GBP for cancer research at Uppsala university
- 4. What is crowdfunding? Accumulation of small investments in individual projects by large number of individuals (the “crowd”) via or with help of Internet and social networks (De Buysere et al., 2012)
- 5. SWEDEN 37m SEK (Oct 2013) Globally 470 000 projects via 800+ platforms Massolution 2013
- 6. Form of Funding Benefits for Funders Donation-based Donation Intangible benefits. Reward-based Donation or prepurchase Equity-based Investment Debt-based Loan Rewards in addition to intangible benefits. Return on investment if company does well. Rewards sometimes also offered and intangible benefits may motivate too. Repayment of loan with interest. Alternatively intangible benefits if loan given interest-free. Ingram & Teigland, 2013
- 7. Stockholm success story: Flippin‟ Burgers Money raised: SEK 36,502 / €4,000 Number of investors: 186 Date funded: September 2011 Sector: Food
- 8. Enabled local interaction, involvement
- 9. Who are the funders? Educated experts? 85 % of respondents have university degree (vs 16% of women and 22% of men in general population, 2013) 42% had knowledge in same field as project they funded 49 % reported to have been better at judging project quality due to previous experience The “in-crowd” 47 % of “the crowd” classified themselves as entrepreneurs – compared to only 7 % of Swedish population (2012) 77 % never bought shares in unlisted company before 41 % risk lovers Skoglund & Stiernblad 2013
- 10. Skoglund & Stiernblad 2013
- 12. Equity crowdfunding in Sweden No EU/EEA country can require a prospectus to be prepared for rounds of less than 100 000 EUR For rounds of 5 million euros or more, an EU prospectus is always required In Sweden the limit is 2.5 million EUR Less than 150 „non-qualified‟ investors without a prospectus
- 13. Benefits of Crowdfunding Screening device for investors Reach investors further afield Reach people with money who don‟t have the right “connections” BUT in Equity crowdfunding: Lots of small investors – a problem? Ingram & Teigland, 2013
- 14. Requirements to succeed? Choose the right platform – and crowdfunding type – for your project (keep in mind platform fees) Make the concept easily understood Make it personal? Ensure that you have initial critical mass (social media, newspapers) – NB in donation- and reward-based Feed the crowd Keep followers up to date
- 15. What‟s next?
- 18. Thank you! Claire Ingram Stockholm School of Economics claire.ingram@hhs.se @Claire_EBI Questions? Image via NewYorker.com
Editor's Notes
- Neuro-endocrine cancer (NET)virus that destroys this cancer in lab experiments – here in Uppsala – not a cure, but a treatmentSwedish government funding andSwedish Cancer Society funding. The grants cover the research to develop viruses for therapy but they are not big enough to run clinical trials with an advanced medicinal product where special rules apply (viruses falls under this category in Europe).The Swedish research team placed much of their research in to the public domain- no patents
- Snabbutveckling, 600% på 3 årMassolution: Four established types of crowdfunding exist: donation-based, reward-based, equity-based, and lending or debt-based. In May 2013, there were around 800 crowdfunding platforms worldwide, and crowdfunding initiatives raised an estimated 2.6 billion USD in 2012, including about 945 million USD in Europe through 470 000 campaigns. Furthermore, Massolution predicts that in 2013 crowdfunding will reach volumes of 5.1 billion USD worldwide, with about 1.3 billion USD in European markets. To date, business and entrepreneurial activity comprises 16.9% of all crowdfunding activity while Information and Communication Technology projects comprise a mere 4.8% of activity.
- 85 % of respondents have university degree (vs 16% of women and 22% of men42% had knowledge in same field 49 % reported previous experience47 % of “the crowd” classified themselves as entrepreneurs – compared to only 7 % of Swedish population (2012)41 % risk loversWho are Sweden’s crowdfunders (Skoglund & Stiernblad 2013). The survey was sent out by email to 2931 traditionalcrowdfunders (ie not equity) who visited FundedByMe between June 2012 and March 2013 to fund projects. 390 completed the survey - response rate was 13.3 %. The majority of the survey respondents were males with an average age of 38 years.
- 49%: “because I liked the project and I wanted to support the idea”25%: “because I like, know or have heard of the project initiator”
- Foldit - Comp Sci at University of Washington in Seattle, researcher in Seattle - use the cursor fold the proteininto its optimum shape. The only rules are based on physics—opposite charges attract, atomic bonds have limited angles of rotation, and the parts of the molecule that stick to water tend to point outward. The closer your model's properties adhere to those rules, the more points you get. Brainflight – Max Planck Institute - map the way brains are wired up.