Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

17
TOWARDS A NEW, OPEN SOURCE PHARMACEUTICAL INDUSTRY FOR THE GLOBAL POOR Leveraging the Power of the Crowd July 15-18, 2014 Sherwood Neiss: [email protected] @woodien

description

Presentation given by Sherwood Neiss at the Open Source Pharma Conference. Neiss gave this talk at Rockefeller Foundation Bellagio Center in July 2014. Sherwood Neiss Bio: http://www.opensourcepharma.net/participants/sherwood-neiss Conference Agenda: http://www.opensourcepharma.net/agenda.html

Transcript of Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

Page 1: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

TOWARDS A NEW, OPEN SOURCE PHARMACEUTICAL INDUSTRY FOR THE GLOBAL POORLeveraging the Power of the CrowdJuly 15-18, 2014

Sherwood Neiss: [email protected] @woodien

Page 2: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

Vision Combine the power of crowdsourcing with crowdfunding to develop the next generation of open pharma solutions

Page 3: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

The 4 Types of Crowdfunding

3

1.Contributors  get     no  material  return  !2.  Appropriate  for  charities  !3.  Illustrative  example:  !!!

  Crowd  giving  (donation)        

1.Contributors  get       gift  of  appreciation  or  

  product  pre-­‐purchase  

2.  Appropriate  for  creative  projects  and  product-­‐presales  

3.  Illustrative  example:

  Crowdfunding  (rewards)        

1.Contributors       get  profits  !2.  Appropriate  for  entrepreneurs  !3.  Illustrative  example:

  Crowd  investing  (equity)        

1.Contributors       get  a  fixed  return  !2.  Appropriate  for       SMEs  !3.  Illustrative  examples:

  Crowd  lending        

Page 4: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

4

Page 5: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 6: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

Money

Knowledge/Experience

Demand

Market Opportunity

Strategy

Product

A crowd with a vested interest is more than money Benefits of Crowdfunding

Funders bring relevant industry knowledge and experience to the table

They assist the entrepreneur in crafting winning strategies

They provide introductions to entrepreneurs that provide valuable market opportunities

They assist in refining a product offering so that it meets the demands of the market

They assist entrepreneurs in gauging demand for a product by attaching monetary bets on the company�s future And they provide the capital entrepreneurs need to execute on vision

Page 7: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 8: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

What can industry participants expect? Averages Raise/Yield

Average Raise! Median!

All Types! $111,100! $46,850!

Equity Only! $178,790! $81,880!

Debt Only! $62,421! $15,341!

Rewards! $111,647! $25,800!

Page 9: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 10: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 11: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 12: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions
Page 13: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

13

Crowd  capital  employs  the  power  of  numbers  to  raise  capital

$100,000  x    1  financier

BUSINESS FINANCIER CROWD

obligation

1. Zayd  needs  $100,000  for  a  start-­‐up  business  !2. He  completes  a  loan  application  or  makes  a  

pitch  to  a  professional  investor  !3. He  raises  $100,000  from  a  single  financier

  Scenario  A:  Traditional  financing        

1. Zayd  needs  $100,000  for  a  start-­‐up  business  !2. He  applies  on  an  online  crowd  platform  and  

designs  a  social  media  campaign    !3. He  raises  $100,000  from  25  friends,  family  

members  and  social  media  contacts

  Scenario  B:  Crowd  capital        

BUSINESS

$4,000  x    25  financiers

obligation

Page 14: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

An  effective  crowd  capital  strategy  responds  to  four  key  needs

Page 15: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

When you add those who received Angel/VC funding with those who are in talks it signals institutional interest

Crowdfund Investing Leads to Interest from Institutional Investors

=

28% within 3 months of CF close, completed Angel or VC follow on round

43% in discussions with institutional investors.

+

71% interest in institutional companies once crowdfunded!

Page 16: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

Where will jobs be created? Impact on Jobs

Avg Employees pre-raise!

Median New Hires post-raise!

% of firms hiring!

Rewards! 1! 2! 28%!

Equity/Debt! 2.1! 2.2! 39%!

Page 17: Combine crowdsourcing with crowdfunding to develop next gen pharma solutions

ThanksSherwood Neiss

Crowdfund Capital Advisors, LLC [email protected]

@woodien +1-202-247-7182