Healthfundr aims to uncrunch startup investing

By Jonah Comstock
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Money TreePrograms like Rock Health Angel Group and SecondMarket's recent collaboration with StartUp Health both focused on getting more accredited investors into healthcare -- high net worth individuals who don't have access to big venture funds, but are willing to invest hundreds of thousands of dollars into startups. But both those programs are selling accredited investors on the earliest stage of investment, in an effort to get them in on the ground floor.

Healthfundr, a new digital health investment crowdfunding platform, wants to leverage those same investors to create a new source of capital at the next stage, what Healthfundr COO and Co-founder Sean Schantzen and others call the "Series A crunch."

"Because there's an enormous increase in angel and seed funding, more people are doing innovation, but the amount of money available through venture funds has basically stayed flat. So there's more innovation upfront, but a lot of those companies end up capital starved," Schantzen told MobiHealthNews. "We took this approach of focusing on companies that are a little further along, close to regulatory approval or they've gotten it already. We figure that's where we can add value. Increase the number of innovators that can get past the valley of death, basically."

Healthfundr plans to attract investors by promising to do a lot of the work for them in terms of vetting the companies. So rather than taking a marketplace approach of listing many different companies, Healthfundr will work closely with "no more than five to ten" startups at a time, Schantzen said.

"We'll look at business plans, run background checks on founders, and all of that up front," Schantzen said.

SEC regulations prevent Healthfundr from publicly naming the companies it's working with until they're funded, but Schantzen said they are recruiting investors for three companies currently and in conversations with a few others. Accredited investors can see the list of companies by creating a profile on the Healthfundr site.

Schantzen said that, like Rock Health, his group is particularly interested in physician investors, who are, of course, not only well-educated, but are also knowledgable about healthcare specifically. But Healthfundr also wants to focus strongly on investor education, building up educational resources on topics such as FDA clearance.

Because most of the existing health accelerators are interested in early stage companies, Schantzen said Healthfundr sees them as potential partners, not competitors.

"They do a great job of helping companies take the very first steps," he said. "Building up relationships with the accelerators and the incubators is definitely something we're doing."