Presentation given by Sherwood Neiss at the Open Source Pharma Conference. Neiss gave this talk at Rockefeller Foundation Bellagio Center in July 2014. Sherwood Neiss Bio: http://www.opensourcepharma.net/participants/sherwood-neiss Conference Agenda: http://www.opensourcepharma.net/agenda.html

1. TOWARDS A NEW, OPEN SOURCE PHARMACEUTICAL
INDUSTRY FOR THE GLOBAL POOR
Leveraging the Power of the Crowd
July 15-18, 2014
Sherwood Neiss: sherwood@theccagroup.com @woodien

2. Vision
Combine the power of crowdsourcing with
crowdfunding to develop the next generation of
open pharma solutions

3. The 4 Types of Crowdfunding
3
1.Contributors
get
no
material
return
!
2.
Appropriate
for
charities
!
3.
Illustrative
example:
!
!
!
Crowd
giving
(donation)
1.Contributors
get
gift
of
appreciation
or
product
pre-­‐
purchase
2.
Appropriate
for
creative
projects
and
product-­‐
presales
3.
Illustrative
example:
Crowdfunding
(rewards)
1.Contributors
get
profits
!
2.
Appropriate
for
entrepreneurs
!
3.
Illustrative
example:
Crowd
investing
(equity)
1.Contributors
get
a
fixed
return
!
2.
Appropriate
for
SMEs
!
3.
Illustrative
examples:
Crowd
lending

4. 4

6. Money
Knowledge/Experience
Demand
Market Opportunity
Strategy
Product
A crowd with a vested interest is more than money
Benefits of Crowdfunding
Funders bring relevant industry knowledge
and experience to the table
They assist the entrepreneur in crafting winning
strategies
They provide introductions to entrepreneurs that
provide valuable market opportunities
They assist in refining a product offering so that it meets
the demands of the market
They assist entrepreneurs in gauging demand for a product
by attaching monetary bets on the company s future
And they provide the capital entrepreneurs need to execute
on vision

8. What can industry participants expect?
Averages Raise/Yield
Average Raise! Median!
All Types! $111,100! $46,850!
Equity Only! $178,790! $81,880!
Debt Only! $62,421! $15,341!
Rewards! $111,647! $25,800!

13. 13
Crowd
capital
employs
the
power
of
numbers
to
raise
capital
$100,000
x
1
financier
BUSINESS FINANCIER CROWD
obligation
1. Zayd
needs
$100,000
for
a
start-­‐up
business
!
2. He
completes
a
loan
application
or
makes
a
pitch
to
a
professional
investor
!
3. He
raises
$100,000
from
a
single
financier
Scenario
A:
Traditional
financing
1. Zayd
needs
$100,000
for
a
start-­‐up
business
!
2. He
applies
on
an
online
crowd
platform
and
designs
a
social
media
campaign
!
3. He
raises
$100,000
from
25
friends,
family
members
and
social
media
contacts
Scenario
B:
Crowd
capital
BUSINESS
$4,000
x
25
financiers
obligation

14. An
effective
crowd
capital
strategy
responds
to
four
key
needs

15. When you add those who received Angel/VC funding with
those who are in talks it signals institutional interest
Crowdfund Investing Leads to Interest
from Institutional Investors
=
28%
within 3 months of CF close,
completed Angel or VC follow on round
43%
in discussions with institutional
investors.
+
71%
interest in institutional
companies once crowdfunded!

16. Where will jobs be created?
Impact on Jobs
Avg Employees
pre-raise!
Median New
Hires post-raise!
% of firms
hiring!
Rewards! 1! 2! 28%!
Equity/Debt! 2.1! 2.2! 39%!

17. Thanks
Sherwood Neiss
Crowdfund Capital Advisors, LLC
sherwood@theccagroup.com
@woodien
+1-202-247-7182