One of the inherent problems identified with crowdfunding, even for accredited investors, is how to manage the, er, crowds. Even though they may have enough capital, how can there possibly be enough hours in the day to satisfy all the reasonable questions these new investors will have?
One crowdfunding platform that thinks it has the right approach is OurCrowd. It wants to provide a way to invest in Israel-based startups. But lest you be inclined to pigeonhole it with other crowdfunding groups, it sees itself less as an angel network and more as a solution to fix what it calls a broken venture capital model.
Behavioral Health, Interoperability and eConsent: Meeting the Demands of CMS Final Rule Compliance
In a webinar on April 16 at 1pm ET, Aneesh Chopra will moderate a discussion with executives from DocuSign, Velatura, and behavioral health providers on eConsent, health information exchange and compliance with the CMS Final Rule on interoperability.
As the group’s website puts it:
While Angel investing is rapidly increasing as a funding alternative for early stage companies, most angels and their groups, remain largely ad hoc, and are not scalable. Investors want the organization, deal sourcing and management capability of a venture fund without the large up-front commitment and fees, together with the ability to pick and choose those investments that interest them.
Here’s how it works. Investors need to be introduced or referred, or just make initial contact on OurCrowd’s website. At some point they also need to prove they are accredited investors. The management team does the vetting for companies and members get a look at what companies are available for investment. If they do decide to invest in a company, the minimum they can do is $10,000. According to the YouTube video, fees are about one-half to two-thirds that of a venture capital fir, but it will take carried interest and management fees.
OurCrowd filed a Form D with the U.S. Securities and Exchange Commission this week. It has raised $368,000 in debt, options and securities for Consumer Physics, a startup that’s developing a pocket spectrometer for smartphones. Although details of its applications were not immediately available, a University of Illinois professor, Brian Cunningham, developed a smartphone spectrometer earlier this year to identify toxins and bacteria.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Launched in October with 10 startups, OurCrowd has raised more than $6.5 million for 12 early stage companies, according to Israel21c, an online news magazine.
OurCrowd Founder Jon Medved is a serial entrepreneur, according to its website, and is the founder of Israel Seed, which has raised and managed $262 million across four funds. He told the magazine that he developed the company to help investors who wanted to “play” in the startup nation’s technology scene:
“In the past, I’d direct them to buy stock if it was a public company, or invest through venture capital, but if they wanted to get into a startup of their own choosing, I’d just take their cards…Thousands of cards later, I was watching what was going on in crowdfunding over the Web, and in my opinion, no one had done it in the right way and not specifically for Israel.”
Among the members of OurCrowd’s management team are Elan Zivotofsky, who worked for Goldman Sachs and Lehman Brothers; Zack Miller, who worked for SeekingAlpha; Gadi Mazor, formerly of Onset; Robbie Citron of Jerusalem Global; Jay Kalish of Allot; and David Arnovitz, formerly of SecureWare.
One nagging problem facing crowdfunding is how investors will be able to make certain they get the return they expect. Another is how does it balance the understandable desire by an investor to meet the management team without the management team spending all their time talking to investors?
[Featured picture of the Israeli flag from Flickr]
