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Conventional is the key word, as there is a successful alternative: crowdfunding. Kevin O’Leary, one of the investors on Shark Tank (the US version of Dragons’ Den or Germany’s Die Höhle der Löwen), states that crowdfunding is “probably the most viable opportunity there is for raising capital given an environment that is in shock right now”.

As it relates to the COVID-19 pandemic, time is ticking and we need solutions; not only to help stop the spread of the pandemic, but also to help mitigate its impact. There are really promising initiatives that look to do exactly that, but they need funding now. Crowdfunding offers companies three key advantages that are particularly relevant in today’s climate:

1. Access to capital is much quicker than through traditional financings;
2. It is much cheaper (it requires fewer lawyers, accountants, bankers, etc), and
3. The addressable audience is much larger.

A compelling story and a rationale valuation that leaves upside for potential investors are the key ingredients to a successful crowdfunding. Having a proposition that is relevant to a topic of broad current concern will help too, which is why much attention, and funds, will go to COVID-related initiatives. Moreover, it can be expected that healthcare, biotech and life sciences will remain popular investment themes once the pandemic has been halted.

Aescuvest recently published a call for COVID-related initiatives. In less than two weeks, over 30 projects were submitted to our investment committee, which are now going through the vetting process.

This confirms the level of entrepreneurial innovation that is focused on this problem. It also shows the need for capital. Finally, it indicates how crowdfunding may be the one way forward to find, develop and bring to market products and solutions that will help save lives, as well as help mitigate the devastating health and economic impacts of the COVID-19 pandemic.

Hey, and you could find yourself being a co-investor with the O’Leary’s of this world, having spotted the next big thing, while traditional funds sat on the sidelines and failed to act.

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