Healthfundr is an equity-based crowd funding platform for health startups. The site provides accredited investors with opportunities to invest in a selection of curated companies working on digital health, health IT, diagnostic and medical devices.
The JOBS Act and the Affordable Care Act are dramatically changing regulations surrounding crowdfunding and healthcare. Crowdfunding has changed the venture capital landscape and startups in all sectors are using this method to raise funding. The landscape for health investment is also changing. Funding soared for health IT and digital health companies in 2012, while money continued to lag for life sciences and medical device companies.
CEO Jared Iverson is a former securities attorney with experience working for a pharmaceutical company. He founded Healthfundr in response to shifts he observed in both industries.
“The company is rooted in a desire to see more innovation and capital around health and medical innovation,” he said in an interview with VentureBeat. “A lot of capital goes to areas that are easier to understand or have less regulation, and I’d love to this sector become more mainstream. This is an area that has a huge impact on quality of life.”
Healthfundr is only open to accredited investors. As of today’s launch, it features three vetted companies that are looking to raise capital. Unlike other equity-based crowdfunding sites like TheFundersClub or CircleUp, Healthfundr works with later stage companies that already have traction and are looking to raise larger amounts. Iverson said that there is not shortage of seed funding or later stage capital for health companies, but many struggle to receive first rounds of institutional funding. Healthfundr is meant as a place where companies that have traction in the market, and with regulators and investors, can raise growth capital of a few million dollars.
“Health startups often have to overcome regulatory hurdles, and require a higher degree of sophistication and more capital from investors,” said Iverson. “One of the unique difficulties is getting investors to follow-on. We want to fill this hole by being selective about the companies we choose so investors feel more confident in their ability to carry out due diligence.”
Healthfundr is a registered broker-dealer and will take a small portion of the capital raise, either in the form of equity or cash compensation. Iverson’s ultimate goal is to become the main hub for health and medical technology deals and drive funding and interest into this space.