The medical device sector is ravenous for fresh capital. But they’re not desperate enough to trust crowdfunding.
That was confirmed at this week’s 10x Medical Device Conference in Minneapolis, Minnesota, during a panel on new sources for capital. It was a bone-jarringly frank conversation that featured two entrepreneurs including Steve Anderson, CEO of Preceptis Medical. Anderson was straightforward about early stage investing: Angels have money but the terms are typically bad (largely so angels can protect themselves in later rounds), while strategic investors are hesitant to come in on earlier rounds.
So what about crowdfunding for medical device companies?
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
“I don’t see how that works in devices–I don’t see one way it works,” he told the audience. It may be great in other sectors, such as consumer electronics, Anderson said. “But what are we going to give people–a medical device?”
That doesn’t mean the innovators aren’t trying to create a crowdfunding solution for medical device companies. MedStartr has a medical device section, a new site Liifmed is trying to focus on life sciences, and offshoots like PeerBackers, Poliwogg and TechMoolah are developing services too. But the amounts companies raise on these services are sub-$20,000 and the rewards for investing are quaint: blog posts written by the company you’re funding in exchange for a $500 investment or a customized key chain for a smaller investment.
Judging from the feedback at 10x, the medical device sector will need to see a company make Veronica Mars money from crowdfunding to make them believers.
