There are no clear statistics for top crowdfunding sites for cancer technologies, as it is still too early to speak of a crowdfunding industry for cancer. That said, platforms like those of Music Beats Cancer is a top crowdfunding platform with its own donation pages, team fundraisers seeking innovative fundraising ideas through use of social media, coupled to improved fundraising software, offer an example in 2020 for what an industry leader in the cancer crowdfunding space looks like. On the technical side, crowdfunding payment processing through streamlined credit card processing for donors is the simple side of the challenge, as eliciting support for crowdfunding for cancer remains challenging due to its unfamiliary in the crowdfunding space.
Yet, so long as raising funds remains an achilles heel of small biotech companies who are responsible for much of the translation of basic research into useful cancer treatments, who perennially are seeking funding from a range of stakeholders be they cancer survivors, breast cancer patients, the general public or third parties, fundraising sites that use mobile apps while limiting transaction fees, payment processing fees, or credit card processing fees while enabling organizations to accept donations will likely proliferate over time. This is particularly true as millions of dollars are needed to move scientific research into creative projects leading to cancer success stories. Fundraising campaigns will not be going away, and crowdfunding for cancer to ultimately improve cancer care for patients while hopefully reducing medical bills will be pivotal in the coming years.
To provide context, the cure for cancer remains a dream unfulfilled by individuals, communities and nations. As demand for cancer cures remains as urgent as ever, be it for pancreatic cancer, skin cancer, ovarian cancer, lung cancer, or even breast cancer in which progress has been made in the past decades, crowdfunding platforms, crowdfunding campaigns, and the emergence of dedicated crowdfunding sites for translating cancer research projects into cancer treatments for cancer patients will continue to grow. As medical costs continue to rise, innovation will be needed and crowdfunding platforms offer a means to scale attempts at innovation that could lead to cost reductions as well as cures.
In the US, funding scientific research at academic institutions is a main access to discovering cures for diverse cancers. Cancer research organizations receive billions of dollars each year in the form of federal funds and philanthropy to help advance the war on cancer. While thousands of potential cures are in fact discovered in research labs each year, many don’t make it to the clinic. This is because the funding required to advance a research discovery into a viable cancer-fighting technology is extremely difficult to access. Translating from the lab into the health care system demands raising money so that cancer patients benefit from viable cures. On average, just to make it through clinical trial phases requires $6M.
Normally, when biotechnology entrepreneurs launch start-ups to advance a new cancer treatment or diagnostic test, the initial tranches of capital come from friends and family, or debt from a loan or their personal savings. Start-up biotechs are not usually eligible for government or philanthropic grants that are traditionally earmarked for research at academic institutions. Unfortunately, for most early stage biotech companies, the “bootstrapping” route is insufficient. Projects get started and then are paused as founders struggle to raise more capital. This system is ultimately wasteful as too many great ideas for fighting cancer never get off the ground. This comes at the expense of global health and the public’s financial health and well being.
In the late 2000’s, a fourth option came available for entrepreneurs of all industries: Crowdfunding. Reward-based crowdfunding platforms like Kickstarter and Indiegogo were among the first to help raise early stage capital and boast success rates. Since its inception in 2009, projects on Kickstarter have raised over $3.3B and over 133 projects have been successfully fundered. While many great ideas have been financially lifted through these platforms, biotech projects are either not eligible or have been far less successful at soliciting support from the crowd.
Equity crowdfunding is a model that has become an increasingly common option for biotech startups. Equity crowdfunding is the online offering of company shares to the general public. Unlike reward-based crowdfunding, equity crowdfunding is regulated by national and/or regional entities. Different countries have taken different approaches to equity crowdfunding where some countries are liberal and other countries use protectionist approaches.
Equity crowdfunding opened up in the US in 2013, after a 90 year ban on general solicitations was lifted to allow companies to publicly “pitch” to accredited investors. In May of 2016, Title III of the JOBS Act went into effect. This enabled non-accredited investors to participate in equity crowdfunding. Entrepreneurs can now launch a successful campaign that reaches out to a large number of potential investors who have been traditionally left out of private sector investing.
The upside of equity crowdfunding is that it opens up the number of people who can invest in your idea. This can potentially lead to a substantial raise in a relatively short time. Also, equity crowdfunding can help build confidence in the system because it forces start-ups to get better organized for future rounds of funding through more traditional funding routes. On the other hand, equity crowdfunding investors do have ownership of your company, which means some could potentially be demanding. Therefore, entrepreneurs must keep all investors updated and satisfied with the direction of the company.
Popular US-based equity crowdfunding platforms are Start Engine and RedCrow.
Donation-based crowdfunding has also flourished alongside reward-based and equity based crowdfunding. Organizations that are mission minded, for example those with charitable tax-exempt status, can solicit individuals in support of a public good project. Millions of dollars have been raised for a variety of causes and emergencies through popular online crowdfunding platforms such as Crowdrise, Fundrazr, YouCaring and GiveForward. In the case of U.S. 501(c)3 charities, donors receive a tax exemption for their financial gifts along with email updates on funds raised and progress made.
A number of charitable crowdfunding platforms for cancer research have surfaced over the years to help scientists fund “out-of-the-box” ideas not supported by government grants. These include Consano, Croudfunder and MedStartr. While research projects conducted at cancer research centers have successfully capitalized on funding through the crowd, these platforms do not cater to biotech entrepreneurs who are developing biomedical technologies for the marketplace.
Perhaps one of the biggest challenges with crowdfunding biotechnology is the fact that the role of biotech in the public sphere is poorly understood. The public has been inculcated for decades with rhetoric that encourages funding research for the cure, rather than supporting biotech efforts that enable discoveries to advance to market. In fact, as the proportion of patented ideas grows, there is a disproportionate number of viable technologies that actually make it to the marketplace. There are many reasons for this, arguably the most important one is lack of critical funds for early stage biotechnologies to prove their principle. The biotech industry affectionately terms this funding bottleneck “the valley of death,” where great ideas go to die due to lack of funds.
Music Beats Cancer is a charitable crowdfunding platform that is responding to the valley of death issue. Music Beats Cancer enables biotech entrepreneurs seeking funding to raise a round of non-dilutive funds from public donations. In exchange, donors get to directly give to biotech projects that they find intellectually and emotionally appealing.