Social Media is an interesting beast, something that has forced its way into classrooms and boardrooms alike. Crowdfunding projects and promotions are cropping up more and more, grabbing more online inches and attention throughout my extended network. The question remains in my mind, are people really aware of what is going on here? In the vast majority of cases, “investors” will struggle to see any significant return on their investment. In January 2015, the first, yes, you read that correctly, the first crowdfunded IPO of Mill Group Residential took place, and as such, the first Exit Deal allowing investors to realise a return.
I think the first thing to take a look at are the founding principles of the platforms, and where crowdfunding originated; whilst you can certainly make a case for large scale public projects such as the construction of the Statue of Liberty, following the same model of approaching donors with cap in hand, the modern emergence was through the music business. Essentially, bands would extract funds from their fans to launch albums to avoid contracts with the ‘evil’ corporations. Essentially, crowdfunding now, as at the beginning, is a method for people, organisations, and companies to extract money from the public via sometimes contentious marketing methods. It was not originally set out as a viable investment vehicle, and as such seeing ROI is an afterthought. With the social media explosion, crowdfunding has piggybacked the social stigma of sharing projects you believe in or have a vested interest in, trading on the principle of “cool by association”.
Traditional funding methods for clinical research are slowly dwindling. Government budget cuts continue to squeeze the sector, with many in the industry asking whether crowdfunding could provide the answer. Medstartr and Curelauncher are both freshly launched platforms that look to fund research via small donations from the public. The latter, only launched in October, so we are yet to see any success stories. My question regarding this is not why these platforms exist, but more will people see through them or not? Will there be higher uptake than following a more traditional approach; if you are looking to provide funds to clinical development, why not give to a research focused charity where they will see a gain of 20% Gift Aid (in the UK) on the donation you make. If you are looking to fund research for financial gain then traditional financial channels can be followed. Why do we need such platforms, who take a 9-15% cut on the donations in order for people to contribute to projects in need?
There is a danger, in the social age that fashionable causes will be far better funded through crowdfunding, with people wanting to be seen to be donating to a trendy cause. Are the public well informed enough to be deciding which drugs make it to market, and which are left on the shelves? In the vast majority, I for one, think not. Will a fancy website and a trendy cause be more appealing than a project of greater medical importance? A lot of the crowdfunding platforms, and those looking for funds on said platforms, look to leverage this lack of knowledge and understanding; one such excerpt simply opens “For $10.00 or more: Show the world that you care about savings lives…”Is this the direction in which the industry should be moving forward?
Too much or too little information can be a dangerous thing, and where people are funding clinical research on either a whim, or with too much or too little help from Google and ambiguous internet sites, the winner may not always be the patient. Whilst crowdfunding can help fill the void left by government funding cuts, I feel that a hybrid is needed, where the medical profession are making the funding decisions rather than the public themselves. If the reigns are handed over to your Average Joe, who is driven by personal experience, a few Google searches, and his need for social appreciation for his efforts, then the ramifications could be huge.
We are at the dawn of a potentially huge paradigm shift in clinical research funding, and I for one will be closely monitoring the outcome.