Thursday, 11 July 2013

CrowdCure: Combining Philanthropy with Upside Potential

Is CrowdCure the answer to the tricky dilemma of true crowdfunding for biotech start-ups & drug discovery?   To find out I spoke with Charles Groome, founder of the soon to be launched CrowdCure.

Charles is a Neuroscience graduate of UCL, who started his career trading pharmaceutical stocks at financial services firm Knight Capital, and then left to raise a $25 million venture capital fund to invest in early-stage biotech companies focused on longevity. Despite raising commitments for a third of this sum, he failed to secure sufficient funds overall. He also worked to raise seed capital for one of the companies he planned to eventually back, and so encountered most of the life science VCs on both sides of the Atlantic. His conclusion that VC risk and time profiles are inappropriate for drug discovery, is shared by many of us (e.g. see Funds & Fundability).  The success of Kickstarter et al drew his attention, indicating the success of the crowdfunding approach to specific projects, with its philanthropic nature and ability to pool small sums of money from large numbers of people.

He’s not alone in that of course, as many have considered this approach.  The issue is generally how to marry long timescales & high risk with investment to obtain a return.  CrowdCure’s solution is first to tap into philanthropy in the crowd, with the spice of a potential upside if a particular project is eventually successful.  And secondly, to recognise any success as early as possible, by sharing collaborative revenues, as well as acquisition proceeds.

How does it work?  CrowdCure establishes a “Special Purpose Vehicle” company for each project. 

As part of a “Research Financing Agreement” the SPV exclusively licenses Project IP from the Biotech Company seeking funding, and then sub-licenses it back to the Company, who continue to control asset development. All future Project revenue streams from licensing are transferred to the SPV. The SPV has two lines of shares; voting and non-voting. The voting shares are held in trust and the non-voting shares are distributed as “Research Income Rights”TM (RIR) to the crowdfunders (via the online portal) and to the Biotech company. This is done in line with a third-party attained valuation.

CrowdCure Ltd receives a commission as a % of funds raised, and “Research Drivers LLP”, the SPV trustee shareholder and administration entity (which licenses the whole structure), receives a small % of any future SPV income pre-distribution. CrowdCure Ltd is an Appointed Representative of an FCA Authorised Firm.

If the biopharma asset develops to the point of commercial value, Big Pharma can either sub-license it from the SPV or acquire the SPV outright.

A SPV approach was used a lot in the early days of US biotech, and seems similar to recent approaches taken by Versant and Atlas Ventures (Fierce Biotech articles).  Charles is an advocate, pointing out the benefit for a biotech being able to raise separate funds for each of a portfolio of single projects, and subsequently selling on the projects when new skill sets are needed.  Whilst recognising that the crowd are more interested in backing Projects with a social cause (e.g. cure Alzheimer's) than investing in risky and obscurely named Biotech companies.  Becoming a “Cure Pioneer” recognises their contribution, and motivates along with the chance for upside.  The RIR approach seems to be novel though.

So what are they looking for?  Its early stage pharmaceutical opportunities, pre-clinical, with a validated/proven target being required, and hit discovery welcomed.  They will also check it out thoroughly, conducting VC’esque Due Diligence on the science & data, requiring a sound project plan & budget, and checking out the team & company background, IP etc.  It also has to fit with their portfolio, which will diversify, rarely addressing already invested areas.

CrowdCure sees itself as a global portal “Crowdfunding for Life”, acting as a “Branded Venture Broker”, enabling sophisticated investors, High Net Worths and “qualified investors” (anyone who can answer six questions on their site) to all contribute.  They are planning to be the first UK & USA operating portal.  Appropriate regulatory requirements are in place in UK, and nearing completion in USA.  With launch scheduled for late July, these are exciting times.

They have big plans – by year 5, to raise over £100m and progress at least one project into clinical trials. 

So for the Biotech, an alternative approach to get that early capital so elusive at present, and
for VCs, perhaps a source of future de-risked opportunities, risk-sharing or co-investment?

For the investor, this is high risk investing, and Charles is keen to stress that.  None the less, if you want to do some good in the world, and would appreciate a possible upside as well, this could be worth a look.  As Charles points out, you too can become a “Cure Pioneer”…….

Tuesday, 14 May 2013

Lifescience / Healthcare Start-up Evolution?

Lean Start-up, Accelerators and Business Model Canvas in Lifescience/Healthcare?

Can the Lifesciences / Healthcare sector’s business start-ups learn from the experience and techniques of the Tech / Digital sectors? I’m thinking particularly of speed to market, and success rates.  If so it this could well boost investment into this sectors start-ups!

As a starting point to investigating this further I’m reviewing/benchmarking the use of three “techniques” within Lifescience/healthcare sector, and would like to ask or your help with this, via three queries.  The aforementioned “techniques” are listed below along with links to brief Linked-In polls.  Many thanks in anticipation of your help - I will of course freely publish the results on my Blog!

1.      The rise of the Tech Accelerators such as the original Y-Combinator and TechStars, and a number of followers in USA & Europe, are a testament to the success of the Accelerator approach (reviewed by NESTA report Start Up Factories, and utilising community based approach elaborated by Brad Feld  Until the recent Health Wildcatters launch in Dallas and Harvard announcement for funding of a new healthcare accelerator, there appeared to be none active in our sector. Are you aware of any others existing or planned?

Related are the “Lean Start-up” , movement developed by Eric Ries (, and the Business Model Generation techniques of Alexander Osterwalder and Yves Pigneur (  In particular techniques such as Minimum Viable Product and Business Model Canvascanvas.  These are reviewed in brief article by Steve Blank, Why the Lean Start-Up Changes Everything (

 Are you aware of these techniques being used in Lifesciences / Healthcare sub-sectors?
2.      Lean Start-up                              Poll:
3.      Business Model Canvas             Poll:

I look forward to receiving your input.
Many thanks

Monday, 11 February 2013

NHS Open for Business ?

East Midlands AHSN

There will soon be a new "kid on the Block", with the aim of opening the NHS for business!

I thought readers may well be interested to hear of these new organisation that will make the NHS much more user friendly for business - be it research, trials, or marketing!
So here’s a “heads up” on the forthcoming launch of one - the East Midlands AHSN.

EMAHSN’s vision is “The transformation of patient access, experience and outcomes...through innovation and enterprise working” ( provides a general overview). Working with Industry, and facilitating such, is central to their approach.  They aim to be a one stop shop for industry interaction with the NHS in EM, for all purposes: be that adoption of new products, user testing / product development, clinical trials, or clinical research; or indeed assisting NHS derived innovations to be commercialised and the promotion of clinical needs  to industry to expedite the development of new interventions.  The organisation will become ‘live’ April 2013.

A specialist industry support unit will facilitate the one-stop-shop for industry, assisted by a web-portal, and a small seed funding activity will help new innovative ideas get started.  A series of events to highlight the NHS’ clinical “Priority Needs” and enabling networking between industry and clinicians is being planned, and regular Networking events will follow, as will attendance at Biotech/Pharma/MedTech sector events.

personally, I'm proud to be involvement as the Commercial Adviser for this industry facing component, and as such I would be delighted to provide more information on request ?