Medstartr, a just-launched healthcare startup, is on a mission to help other healthcare innovators find undiluted funding and idea validation. In the process, it’s also empowering healthcare consumers to help bring the products they want to market.
Driven by the JOBS Act and by the popular crowdfunding site Kickstarter’s shunning of healthcare products, healthtech entrepreneur Alex Fair and his team have just launched the beta version of a healthcare-specific crowdfunding platform called Medstartr. Currently there are nine ventures on the site looking to round up financial support from doctors, patients and other healthcare stakeholders.
Medstartr says it’s intended for U.S. Food and Drug Administration-approved devices, clinical-stage drugs, new physician practices, academic transfers and research, but in the face of the e-patient and digital health movements, consumer health apps seem most likely to benefit.
Dr. Jen Dyer, a pediatric endocrinologist-turned-entrepreneur in Columbus, Ohio, is using the site to gain support for a clinical trial for the EndoGoddess app, a self-entry glucose journal she’s creating with Duet Health that enables people with diabetes to earn rewards for keeping track of their blood sugar levels. In order for doctors to prescribe the app and insurance companies to reimburse it, Dyer says on her Medstartr page, a clinical trial would need to prove that it made people with diabetes healthier.
After being denied by Kickstarter because her product is healthcare-related, she turned to Medstartr with hopes of raising $25,000 — the most out of any of the companies currently on Medstartr.
“Kickstarter is a platform just for consumers, but this for the first time gives patients an equally important say, dollar-wise, as everybody else in the healthcare system,” she said. “I think it’s very empowering for patients to have an equal vote in what they’d like to see, and Medstartr really allows that for the first time in the ecosystem,” she said.
The process works like this: participants set a funding goal, making a short video and spell out their story on a profile page, where visitors can pledge money in return for gifts, deals, rewards or early access to products. No money is actually exchanged until the goal is met, at which point Medstartr takes a portion of the funding.
In lieu of equity, funders get gifts, incentive deals, rewards and early access to products in return for their contributions, all in lieu of equity. For example, a patient who donates $2 to EndoGoddess gets access to the new version of the app as soon as it’s available, or an endocrinologist who contributes $500 or more becomes part of the clinical trial.
Dyer said she thinks her donations so far have come mostly from diabetes advocates and patients who want to use the app.
“What will benefit the most from this type of platform will be consumer-based healthcare products,” she said. “Something that’s hard to understand and doesn’t have as much of a direct impact on people’s lives wouldn’t lend itself as well to crowdfunding.”
LUMOback is a prime example of that. The sensor and app system that helps consumers maintain good posture has already received more than $139,000 in pledges on Kickstarter (somehow it’s categorized not as a healthcare product but as a product design project). Avado, a patient relationship management system referred to as “the GPS for healthcare,” has raised the most so far on Medstartr, with more than $2,200 pledged.
Medstartr is just the beginning. Sites like Petridish.org, a crowdfunding platform for scientific research, and the less-specific research crowdfunding site innovacracy.org, are popping up. And health-focused CareSeed Crowdfunding and Health Tech Hatch, which appear to be more similar to Medstartr, are both expected to launch in the near future.
We’ll be watching closely as these companies launch and as the U.S. Securities and Exchange Commission drafts crowdfunding regulations over the next several months.