NYC-based MedStartr (@medstartr) has finally unveiled version 1.0 of their crowd funding platform for digital health and medicine projects, which are specifically ineligible for listing on Kickstarter.
MedStartr founder Alex Fair explained to me his frustration when first attempting to submit a health care project to Kickstarter only to find it did not meet the terms and conditions set forth by the company to qualify for listing.
Alex began to think he couldn’t be alone, and as it turns out, he was correct. This is a hurdle met by many hopeful developers of health and medical technologies, so Alex decided to jump on the opportunity to fill this gap in the crowdfunding model by offering these developers a Kickstarter-style platform dedicated solely to medical and health care projects.
Crowdfunding, by definition, can only succeed as a business if the platform can attract a crowd of funders. While I think the beta version of the MedStartr platform is a great proof of concept, and certainly establishes them as the first mover in this soon-to-be trending space, a destination website grown organically by itself is probably not going to be enough of a footprint for the initial list of projects to achieve their funding goals in the tight 30-60 day windows allotted by the MedStartr format.
In the first few days following its launch, the most successful of the nine listed projects is Avado’s “GPS for Healthcare”, with more than $2200 of the targeted $5000 pledged. The CEO of Avado, Dave Chase, certainly set himself up nicely to be the flagship success story with a well written feature on MedStartr and its implications for funding health care and medical technologies published in Forbes the day of MedStartr’s launch.
The other initial listings on MedStartr include the Endogoddess diabetes app created by endocrinologist Jen Dyer, MD, which is a self-entry glucose journal that provides users rewards for healthy behavior. Dyer is trying to raise $25,000 to conduct a clinical trial to verify the apps effectiveness and build out the reward feature of the app which will give users music and other healthy goods for consistent compliance with their doctor assigned glucose testing regimen.
What I find particularly interesting about the Endogoddess business model is the fact that it crowdfunds the revenue for users to get the iTunes music downloads from the individual’s family and friends.
One critical factor that must be taken into account for each project MedStartr revolves around the incentives to support said crowdfunding campaign, specifically who has the incentive to buy and what they need to receive to be convinced to pull the trigger. Currently, potential funders are essentially incentivized to spend money on a crowd funded project for one of two reasons:
- A selfish desire for a new technology or customized experience in the interest of their personal health and well-being
- An altruistic desire to provide that same technology or customized experience to a third party in need who would otherwise go without
In the near-term future, as a result of the recently enacted JOBS Act, there will be yet a third incentive for consumers to participate in the crowdfunding of digital health startups – the potential to purchase equity in startups developing cutting edge medical technology and participate in the seed stage funding rounds of digital health and medical device startups alongside professional Angels/VC. Fair explained to me he plans to launch a sister service called MedFundr once the SEC issues the much anticipated rules for how to implement crowdfunding for equity, which will essentially formalize the Angel investing process.