I have been seeing more and more activity around the idea of using the crowds to fund various healthcare IT startup companies. This shouldn’t be that surprising to any of us given the success of websites like Kickstarter and Indiegogo. They’ve created a whole new way to raise money for passion projects. Plus, as they’ve grown they’ve shown a new way to see if your customer really wants what you plan to offer.
One challenge is that Kickstarter generally hasn’t approved healthcare startup company projects on their platform. In fact, a whole company was born to try and help solve the problem of making crowdfunding available to healthcare. This company is called MedStartr.
I’ve been keeping an eye on it for quite a while. So far they’ve had some successes with these projects getting funding: Medstartr, The Walking Gallery, Peer-to-Peer Global Support for Rare Disease, and Avado. Plus, Reconstruction Bras for Breast Cancer Survivors and Previvors have met their goal, but are still raising money.
I think the most exciting one is The Walking Gallery since it raised well over twice of the money requested. I’m interested to see how some of my friends like referralMD and My Crisis Records do on Medstartr. Their projects are still open if you want to back them.
I think the biggest challenge with Medstartr right now is that it’s currently a “bring your own crowd” fundraising platform. The platform works to raise money if you already have a built in audience that is willing to pay to support it. So far, Medstartr hasn’t been able to produce a large community of “backers” that can fund a project that gets listed. In fact, I don’t think Medstartr even reached its fundraising goal in its campaign (although, it’s listed as such on the website now).
What is also really interesting is a healthcare project that was posted on Indiegogo for a Asthma Education App. So far it has raised $7125 for Health Nuts Media who wants to create the app. That’s not a bad start for their app with 27 people helping to fund that goal. Although, even that number was influenced by a $5000 commitment from Medicomp Systems makers of Medcin. I’d be interested to know how they landed that backing. That’s a nice one and if they can get more of those, that will be powerful.
The good thing with Indiegogo is that whatever money is raised the project gets. In Kickstarter you have to reach your goal or the project gets $0 of funding. I haven’t heard which model Medstartr has chosen to adopt.
We’re still in the early days of Crowdfunding. Plus, true crowdfunding (ie. small investment for small equity) is still waiting on the official rules to be put out. That could really change how companies get funded. I’m excited about the opportunity, but cautious about the challenge of getting enough people to care about healthcare enough to support those projects.