LOS ANGELES - Starting one’s own business can be a significant milestone in one’s career, but it is also a major life challenge. According to Bloomberg, 80% of businesses don’t see their second year, let alone the companies that never see a single product sold or service provided. Although a number of factors are taken into consideration regarding company failure rates, lack of capital is usually listed among the top reasons. Raising capital, particularly initial capital, is an arduous task. Between getting in front of individual investors and networking, doing pitches and follow up calls, all while operating a company with limited resources, raising initial capital using traditional methods is an extremely time-consuming endeavor.
In an effort to find alternatives to traditional methods, a new generation of business owners have turned to crowdfunding, a funding method in which contributions from a large number of people are used to fund a project or venture. Although crowdfunding for equity is a new concept, the securities industry is fundamentally all about two sides of the same coin: raising money and investing money. Springboard Equity Inc. aims to simplify both by leveraging innovative technologies.
Quality Over Quantity
With the launch of their equity crowdfunding platform - dedicated exclusively to the healthcare industry - a varied business sector comprising of medical devices, digital health, biotech, health IT, mobile and diagnostics Springboard Equity brings capital to vetted, high potential, early stage innovative companies. The company engages with the investor community beyond just having access to top deals; the platform aims to make the whole fundraising process more efficient.
“When you look at industry specific platforms, the value it brings is a more vested interest into that specific industry,” said Lyle Martin, CEO of Springboard Equity. “For us, looking at crowd investing specific for healthcare, our outreach and the network that we build from an investor community all has an interest in healthcare and healthcare specific companies. Thus, for an issuing company, the real value proposition is that you're going to get a highly interested audience versus generalized opportunities or the traditional ways of going out to different accredited investors.”
Growing Interest from Start-Ups and Investors
Springboard launched in July, spending the first five months building their technology, their investor community, and different affiliates. As of December 1, the platform launched with its first issuing company and they are currently reviewing and vetting approximately 25 additional companies that have applied to be listed on the platform.
“The high level of interest in the companies applying, and interest from the investor communities as well, is around the digital health or healthcare IT space,” said Martin. “I think the combination of healthcare and technology not only has a lot of interest from what it can do for healthcare, but from an investor standpoint, you've got companies that have the ability to make an impact sooner than later. The Springboard leadership team and partners have a deep history in many facets of the healthcare industry. Martin has 20 years of experience in pharmaceutical and medical device industries. Furthermore, the company’s Vice President of Marketing, Wally King, has 15 years experience within the startup communities, many of those within healthcare, and also a successful involvement within the crowdfunding space. This industry-leading team, through their collective experiences, has recognized a number of variables that affect investments within this potentially profitable sector.
“There’s always kind of been this gap in funding for early stage companies needing to raise one to two million dollars,” said Martin. “Springboard is looking to address that market. Within our first year, we want to place and help secure funding for 50 companies and further strengthen some of our collaborative relationships. There are hundreds of really innovative healthcare companies out there from a technology standpoint that can dramatically improve healthcare. Although not specific to Springboard, from some of our earlier diligence around kind of this stage of investment, if you look at investing what we call startup or early stage (pre-series A), the internal return on IRR for instance is about 27% at this early stage.”
Pioneers of Conscious Capitalism
One of the reasons that these innovative and, potentially game-changing healthcare companies do not go forward is due to a lack of resources. Although initial funding may have been secured, additional capital may be needed in order to maintain operations, continue research or to further product development. In short, these companies fold because funds simply run out. With Springboard Equity’s equity crowdfunding platform, investors are presented with an ideal environment to identify good opportunities with strong ROI potential. Furthermore, their platform will give these healthcare startups a fighting chance to survive.
“We truly believe in what we call conscious capitalism which is making a positive impact in the health of people but also in our economy through the investment opportunities. Without that, many of these healthcare companies simply would run out of resources, run out of time, run out of money. We hope to make that difference.”
To celebrate their launch, Springboard has created a 1-page report titled "6 Reasons Healthcare Investing is Hot."
For more information about Springboard Equity, visit www.springboardequity.com.
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