crowdfunding in biotech
DESCRIPTION
My presentation from Biotech Umeå on January 30, 2014TRANSCRIPT
Crowdfunding in Biotech: problems and possibilitiesCLAIRE INGRAM, STOCKHOLM SCHOOL OF ECONOMICS
ROBIN TEIGLAND, STOCKHOLM SCHOOL OF ECONOMICS
Crowdfunding in SwedenDr. Robin TeiglandAssociate Professor
Stockholm School of Economics [email protected]
@robinteigland
Claire IngramPhD StudentStockholm School of [email protected] @Claire_EBI
A true story
That made 2 million GBP for cancer research at Uppsala university
What is crowdfunding?Accumulation of small investments in individual projects by large
number of individuals (the “crowd”) via or with help of Internet and social networks (De Buysere et al., 2012)
Massolution 2013
Globally 470 000
projects via 800+
platforms
SWEDEN37m SEK (Oct 2013)
Form of Funding Benefits for Funders
Donation-based Donation Intangible benefits.
Reward-based Donation or pre-purchase
Rewards in addition to intangible benefits.
Equity-based Investment
Return on investment if company does well. Rewards sometimes also offered and intangible benefits may
motivate too.
Debt-based LoanRepayment of loan with interest.
Alternatively intangible benefits if loan given interest-free.
Ingram & Teigland, 2013
Money raised: SEK 36,502 / €4,000
Number of investors: 186
Date funded: September 2011
Sector: Food
Stockholm success story: Flippin’ Burgers
Top 5 Best American Restaurants in Europe
Enabled local interaction, involvement
Who are the funders?Educated experts?
85 % of respondents have university degree (vs 16% of women and 22% of men in general population, 2013)
42% had knowledge in same field as project they funded 49 % reported to have been better at judging project quality due to previous experience
The “in-crowd” 47 % of “the crowd” classified themselves as entrepreneurs – compared to only 7 % of
Swedish population (2012) 77 % never bought shares in unlisted company before 41 % risk lovers
Skoglund & Stiernblad 2013
Skoglund & Stiernblad 2013
Equity crowdfunding in SwedenNo EU/EEA country can require a prospectus to be prepared for rounds of less than 100 000 EURFor rounds of 5 million euros or more, an EU prospectus is always requiredIn Sweden the limit is 2.5 million EUR Less than 150 ‘non-qualified’ investors without a prospectus
Benefits of CrowdfundingScreening device for investorsReach investors further afieldReach people with money who don’t have the right “connections”BUT in Equity crowdfunding: Lots of small investors – a problem?
Ingram & Teigland, 2013
Requirements to succeed?Choose the right platform – and crowdfunding type – for your project (keep in mind platform fees)Make the concept easily understoodMake it personal?Ensure that you have initial critical mass (social media, newspapers) – NB in donation- and reward-basedFeed the crowdKeep followers up to date
What’s next?
Thank you!
Image via NewYorker.com
Questions?
Claire IngramStockholm School of [email protected]@Claire_EBI