As the global citizenry has become more empowered and digital, a great shift away from traditional financing institutions has taken place, creating a dramatic new paradigm for funding entrepreneurism. Crowdfunding, similar to crowdsourcing, is a direct conversation between people. For the entrepreneur, this means that you bring your idea to a vast pool of potential investors who are interested in helping you take your vision from paper to reality.
But what if your idea has the potential to save lives or dramatically alter the way we administer drug therapies? Yet, it will require years before it is ready to come to market and investors start to see a return. What then?
Enter FundRX, founded by Zeshan Muhammedi in August, 2015. Along with partners Gurdane Bhutani and Jainal Bhuiyan, Muhammedi designed an internet fundraising platform for all those promising life sciences and healthcare startups.
FundRX was a lifeline for Sensulin CEO, Mike Moradi who was searching for funds to bring to market a novel way to administer glucose-responsive insulin. His idea would lessen the number of doses a diabetic would need to inject each day. But the Sensulin product would not come to market before 2020 or 2021, following clinical trials and FDA approvals. With such a long timetable, it would have been very difficult to find investors willing to commit capital. Because the FundRX crowdfunding platform consists of doctors, scientists, angel investors and medical experts, all of whom understand very well the intricacies of medical and biotechnology development, Sensulin’s chances for funding were greatly improved.
Since the launch of FundRX, six companies have successfully raised funds through the platform. Another 16 are in the pipeline. The fact that FundRX has doctors on board means that the vetting process is guided by professionals in the field who have intimate knowledge of medical biotechnology and familiarity with the diseases being addressed, and the potential for long-term results. This high level of peer-review provides legitimacy to startups, opening doors to other institutional investors.
For physicians, the ability to fund medical technologies also speaks to their desire to return to the community. Muhammedi looks forward to increasing the investor pool with an eye toward moving more promising biotechnology startups into the marketplace. The ultimate benefit, of course, is for us who will no longer miss out on promising biotechnologies due solely to lack of funding.