Think Crowdfunding Stinks? Maybe Not for Animal Health.
Think crowdfunding stinks and is mostly for companies that could not raise money from “real” investors?
A lot of VCs and institutional investors seem to think so. And, frankly, crowdfunding has done plenty to earn that poor reputation. Over the past decade, too many companies raised money and then communicated poorly, failed to provide meaningful follow-up, or simply failed. Broad crowdfunding platforms have not helped. Put a pizza franchise, a consumer gadget and a potential cancer therapy next to each other, and it is hard to argue that investors are looking at a carefully curated investment marketplace.
But I increasingly believe we may be dismissing a useful financing tool because of how it has been used. Animal health is different.
Many innovative companies in our industry need $500,000 to $5 million to reach the next meaningful clinical, regulatory or commercial milestone. That can be too much for founders and traditional angels, but too small to attract efficient attention from many venture funds. Reg CF (the regulation that defines the rules for the crowdfunding space) happens to operate right in that gap.
And animal health has something else: millions of veterinarians, industry professionals and pet owners who already care deeply about the problems these companies are trying to solve.
The model I find compelling is not “crowd first.” It is good science → expert diligence → specialist investors → broader, educated participation. Some recent success stories in our space show that sophisticated capital and community capital can coexist.
Crowdfunding will not replace professional investors, nor should it. But for an industry that has complained for years about the shortage of early-stage capital, perhaps it deserves another look.
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