- Regulation is still in flux. Regulations surrounding equity based crowdfunding are still being hammered out and investment-based crowdfunding will still need to go through brokers. Seems like the crowdfunding platform is an extra layer of complexity in this situation.
- Low ceiling on funds raised. There's a maximum of $1 million raised per 12-month period. This is completely absurd for most biotechnology projects. You might be able to hire a small group of software developers for a web startup for this amount, but $1 million per year is the burn rate for a medium- to large-sized academic lab consisting of graduate students and postdocs (who make 50-70% of market wages with no loaded labour costs of benefits or pensions).
- 10-20% of the total amount raised goes to fees. Enough said.
- Loss of confidential data. If you need to disseminate information to the crowd to raise funds, it's guaranteed that a competitor will see it. In biotech, competitors with more people, funds, and technology will take a key idea and run with it - way faster than you can.
The rest of the article at GEN is definitely worth a look!
