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Entrepreneur Offers Crowdfunding For Health Startups, Including His Own

Posted by timothy on 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?"

9 of 35 comments (clear)

  1. Re:Specific Implementations Vs the General Idea by indeterminator · · Score: 4, Informative

    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.

  2. Re:Specific Implementations Vs the General Idea by InvisibleClergy · · Score: 2

    They don't fit into the guidelines. 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.

  3. FDA and the source of funds? by green1 · · Score: 3, Insightful

    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.

    1. Re:FDA and the source of funds? by DerekLyons · · Score: 2

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

    2. Re:FDA and the source of funds? by circletimessquare · · Score: 2

      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 flames

      --
      intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
    3. Re:FDA and the source of funds? by green1 · · Score: 2

      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)

    4. Re:FDA and the source of funds? by just+another+AC · · Score: 2

      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).

      If the person is willing to try these, they go into trials. The FDA doesn't stop them doing that (limited places on the trials is unfortunate)
      Sometimes it has been shown that merely being in the trial can have associated placebic effects.

      Also, if studies show strong enough evidence that the drug is effective and safe, then the FDA is ethically obligated to get the control group (and wider affected public) onto the cure ASAP

      The alternative is one where everyone gets to go onto whatever they want. Hence no company bothers with trials and people are left with no idea of how to sort the legitimate from the snake oil.

  4. Why would the FDA give a damn? by fuzzyfuzzyfungus · · Score: 2

    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?

  5. you cannot kickstart anything by circletimessquare · · Score: 3, Informative

    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

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it