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Entrepreneur Offers Crowdfunding For Health Startups, Including His Own 35

Posted by timothy
from the get-in-on-the-laetrile-options dept.
awjourn writes "As the SEC hashes out the final rules for crowdfunding equity investments in startups, one NYC entrepreneur is jumping into an industry that popular crowdfunding sites like Kickstarter won't go anywhere near: health. His company, MedStartr, launched July 11 with six companies seeking to raise money from the crowd for their health products and services. Among them, EndoGoddess, an app diabetics can use to track their blood sugar. Even MedStartr wants to raise funding on MedStartr. But will crowdfunding fly in healthcare, and more importantly, will regulators at the FDA and SEC be on board with it?"
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Entrepreneur Offers Crowdfunding For Health Startups, Including His Own

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  • I read about a 'kickstarter' for academic research the other day [technologyreview.com] but oddly enough the one I wanted to put money into was closed already [iamscientist.com] with 1% funding. After thinking about it, I don't understand what it is about these spinoffs that cannot be satisfied by the existing kickstarter? I mean you can kickstart anything right? So what's to stop MedStartr and IAMScientist projects from achieving success on kickstarter? What does a site dedicated to a subdomain offer over kickstarter?
    • by indeterminator (1829904) on Thursday July 12, 2012 @08:41AM (#40627443)

      I mean you can kickstart anything right?

      It seems you can not. FTFA:

      Dyer initially went to Kickstarter, but was turned down. “They told me it wasn’t within their project guidelines because it has a medical focus,” she says.

    • They don't fit into the guidelines [kickstarter.com]. In specific, health care service providers aren't:

      "Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater."

      So that's why there are so many Kickstarter spinoffs.

      • by Anonymous Coward

        Biotech is still technology - just spin it the right way when submitting.

    • i can't link to the url, because i can only find these guidelines from the edit screen for my kickstarter project (see my sig), but there is a lot you cannot kickstart:

      Project Guidelines

      Kickstarter is a funding platform for creative projects — everything from traditional forms of art (like theater and music) to contemporary forms (like design and games). These guidelines explain Kickstarter’s focus. Projects violating these guidelines will not be allowed to launch.

      Note that as you go through the site you may find past projects on Kickstarter that conflict with these rules. We’re making tweaks as we learn and grow. Thanks for reading!

      1. Funding for projects only.
      A project has a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it. A project is not open-ended. Starting a business, for example, does not qualify as a project.

      2. Projects must fit Kickstarter’s categories.
      We currently support projects in the categories of Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater.
      Design and Technology projects have a few additional guidelines. If your project is in either of these categories, be sure to review them carefully.
      View Design and Technology requirements
      Kickstarter requires additional information from Design and Technology projects so backers can make informed decisions about the projects they support. These requirements include detailed information about the creator’s background and experience, a manufacturing plan (for hardware projects), and a functional prototype.

      Additionally, not everything that involves design or technology is permitted on Kickstarter. While there is some subjectivity in these rules, we’ve adopted them to maintain our focus on creative projects.

      Projects, projects, projects. As in all categories, Kickstarter is for projects that can be completed, not things that require maintenance to exist. This means no e-commerce sites, web businesses, or social networking sites. (Yes, this means Kickstarter wouldn’t be allowed on Kickstarter. Funny, but true.)
      D.I.Y. We love projects from the hacker and maker communities (weekend experiments, 3D printers, CNC machines), and projects that are open source (hardware and software). Software projects should be run by the developers themselves.
      Form as well as function. Kickstarter is a place for products with strong aesthetics. Think something you would find in a design store, not “As-Seen-On-TV” gizmos.

      3. Prohibited uses:
      No charity or cause funding. Examples of prohibited use include raising money for the Red Cross, funding an awareness campaign, funding a scholarship, or promoting the donation of funds raised, or future profits, to a charity or cause.
      No "fund my life" projects. Examples include projects to pay tuition or bills, go on vacation, or buy a new camera.
      Prohibited content. There are some things we just don't allow on Kickstarter.
      View prohibited items and subject matter
      Alcohol (prohibited as a reward)
      Automotive products
      Baby products
      Bath and beauty products
      Contests (entry fees, prize money, within your project to encourage support, etc)
      Cosmetics
      Coupons, discounts, and cash-value gift cards
      Drugs, drug-like substances, drug paraphernalia, tobacco, etc
      Electronic surveillance equipment
      Energy drinks
      Exercise and fitness products
      Financial incentives (ownership, share of profits, repayment/loans, etc)
      Firearms, weapons, and knives
      Health and personal care products
      Heating and cooling products
      Home improvement products
      Infomercial or As-Seen-on-TV type products
      Medical and safety-related products
      Multilevel marketing and pyramid programs
      Nutritional supplements
      Offensive material (hate speech, inappropriate content, etc)
      Pet supplies
      Pornographic material
      Projects endorsing or

  • Some men just want to watch the world burn...
  • by gr8_phk (621180)
    Can someone crowd source the development and/or approval process for medical advances like RISUG [wikipedia.org] that would not be profitable for a company.
  • by green1 (322787) on Thursday July 12, 2012 @09:40AM (#40627913)

    will regulators at the FDA ... be on board with it?

    What does the FDA care where the money came from? That's not their job. The FDA is there to make sure that the end product is safe and effective, they shouldn't care who paid for the development of it.

    • The FDA regulates medical advertising, so this may fall under that umbrella.

      • that's a good point. but there is no product being advertised for end users, just advertising for venture capital

        of course, if the product gets demoed and sampled by random end users, and this is made possible by this guy's kickstarter like portal, yeah, that's a problem. it's a fine line he's walking, and he should be very careful. it doesn't mean his scheme won't work, it just means all the implications and possibilities have to be thought out in advance and guarded against, or he will go down in legal fl

        • As the "this guy" mentioned above, I am happy to discuss. The FDA: Indeed, we need to be very careful on this topic and many others. We have Clinical Review Officers and are well advised. We are trained scientists, MDs, Helathcare Attorney, and folks with a great deal of experience in the area. Snake oil is a big concern and we will never enable such on our site. Will there be innovations and ideas that are edgy? Yes, but they need to be safe and effective. I have a bunch of scientific papers myself a
    • The FDA is there to make sure that the end product is safe and effective
       
      It shouldn't care whether the product is effective either.

      • it should care if it is effective. snake oil salesman kill people financially, and literally, by wasting their time on ineffective or even potentially dangerous "treatments" for medical conditions. people with medical conditions are desperate, and they don't have a medical degree. society owes it to them to protect them from charlatans

        besides, you like to hear this on your tv?:

        HEADON! Apply directly to the forehead!

        HEADON! Apply directly to the forehead!

        HEADON! Apply directly to the forehead!

        • Re: (Score:2, Insightful)

          by clarkkent09 (1104833)

          snake oil salesman kill people financially, and literally, by wasting their time

          And FDA kills people financially and literally by delaying drugs by as much as a decade or more and making them MUCH more expensive. It's important to look at both sides of the equation. Letting people die while preventing them by law from trying promising and potentially life saving drugs because they have not gone thought the entire test cycle is criminal and yet it happens every day. Not to mention the issue of liber

          • i'm sorry, i know, i should be more patient, and kind, but you're just a fucking idiot

            you don't give drugs to people that aren't tested. i thought the drugs were expensive due to the development costs

            and your "liberty" ends when some yahoo sues because no one told him the drug was not tested and the government and drug developer bears responsibility for his kidneys not working anymore. and he would have a perfectly good case!

            try to think things through next time, then form an opinion. thanks for playing

          • Disclaimer: IANAD (and I am not part of the US system either but things are still similar over this side of the globe)

            Im sorry but you assume a "promising" drug will be beneficial to people in this situation.

            Many "promising" drugs have killed people quicker than the condition they claim to be treating. Not to mention the drugs that have repercussions for generations to come (thalidomide comes to mind on that front - http://en.wikipedia.org/wiki/Thalidomide [wikipedia.org]).

            If the person is willing to try these, they go int

      • by green1 (322787)

        And this is somewhere I strongly disagree with you. In a world where many many fraudsters try to pass off quack medicine as real, and where many people are likely to use one of these instead of a real treatment, there is major harm done by allowing medicines that simply do not work to be sold as medicine.
        If you claim your product has an effect, you had better be able to back that up with proof. It's really just truth in advertising laws (something North America is sadly lacking)

        • I concur with green1. You also are not just messing with someone's health, but someone's hope as well. It is not something to you want to be unclear or fail with. Crowdfunding brings incredible transparency to these matters and holds a great deal of promise.
      • by tehcyder (746570)

        The FDA is there to make sure that the end product is safe and effective It shouldn't care whether the product is effective either.

        Yes it should. Giving a product an official government stamp of approval carries the strong implication that it is not simply a tube of coloured water, but that it actually works.

        And, yes Virginia, this is interfering with the free market, in much the same way that prosecuting Bernie Madoff for fraud was interfering with his freedom to con people.

  • by fuzzyfuzzyfungus (1223518) on Thursday July 12, 2012 @10:17AM (#40628267) Journal
    I can see the SEC caring, because I'm sure that there are some clever little accounting tricks that violate the letter, spirit, or both, of their rules designed for more conventional forms of investment; but what possible interest would the FDA have in the accounting structure of the company bringing a device/drug/whatever before them?

    The FDA certainly has its own set of Things It Takes Seriously; but those largely concern testing. Aside from, incidentally, testing a company's ability to stick it out long enough to make it through the approval process, does the FDA even pay attention to that stuff?
    • The FDA certainly has its own set of Things It Takes Seriously; but those largely concern testing.

      Testing, and production, and quality assurance, and packaging, and marketing and advertising, and... There's a lot that falls under the FDA's regulatory umbrella even though almost none of it other than testing makes the news.

      what possible interest would the FDA have in the accounting structure of the company bringing a device/drug/whatever before them?

      I suspect that advertising for investment while ma

      • Oh, definitely, if you make medical claims in the only-for-FDA-approved-drugs format without FDA approval, the FDA can come down on you like a sack of hammers from earth orbit.

        Empirically, though, the FDA is far too overstretched to do jack about the legion of 'this is a "food supplement" it is not intended to treat, cure, or diagnose any disease; but it encourages general welfare, boosts the immune system, and is used in traditional Chinese homeopathy modalities to treat cancer!" vendors.
  • The problem is people create crowdfunding projects without understanding the difference between asking an investor for money and asking a community. It's the #1 problem I hear when I consult on how to improve or create Kickstarter projects. In the health industry, that is going to be an even larger issue.

    Side note: This week only, my eBook on the topic is a free download, Unlocking Kickstarter Secrets: Crowdfunding Tips and Tricks [mariolurig.com].
  • I don't know about them, but I wouldn't touch any health care related project with a ten foot pole. In this country, it is a sure road to lawsuits and financial ruin. If you're lucky, you might first make just enough money to pay the lawyers.

  • For example, Just before this post, I was reading this other post on Engadget:

    http://www.engadget.com/2012/07/12/exclusive-hands-on-with-the-lumoback-smart-posture-sensor-video/ [engadget.com]

    Basically, Lumoback is KickStarter project, which monitors back bad posture, and help correct it. You can clearly see the medical application; a doctor could assign one to a patient to help them with back pans etc.

    (Just to clarify, I am not saying it a *good* way to do so, merely that a medical aspect *exist*, which allows us to defi

  • Hello Slash Dot Folks, Thanks for your input and for talking about us. I have found your comments interesting and insightful. We are trying to be completely transparent with all our doings, so of course we are happy to answer any questions here, or on our site in the project we are using to crowdfund ourselves. I have responded a few times to the comments being made where I could help but if questions remain, I am here. Thanks, Alex Fair Founder / CEO MedStartr.com

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