Technology Transfer and Entrepreneurship (Discontinued) - Volume 5, Issue 1, 2018

In the short duration of its existence, it is widely accepted that investment crowdfunding has failed to realize its potential. Although true, almost all investment crowdfunding is targeted to angel investors instead of ordinary people (nonaccredited investors). Investment crowdfunding offerings commonly bar ‘ordinary people’ from participating, set the price of a minimum investment at a level that ordinary people cannot afford and/or the structure of the offering is not sufficiently attractive to meet the investment needs and preferences of ordinary people. Small businesses that engage in investment crowdfunding face a wide range of challenges: the need to build and manage large crowds, high transactional costs makes crowdfunding compare unfavorably with other sources of capital, and current securities laws and regulations remain overly burdensome. As a result, access to capital remains a top challenge for small businesses. As each of these challenges is addressed, it is expected that investment crowdfunding will become accepted and grow to have a dramatic impact on the capital industry.

Background: Digital health is a widely discussed topic in both the lay and professional press. Innovators in this space continue to raise significant funds to develop applications and devices that will change how healthcare is managed in the United States. Wearable devices and mobile health applications are used by up to one third of all American consumers, presenting a key opportunity to give put healthcare into consumers' hands. However, who will have the biggest role in this space remains to be seen. Discussion: Technology giants, biopharma firms, and startups all have a chance to take advantage of a new frontier and change the way healthcare interacts with patients. While the entrepreneur tech industry is leading the way, they lack the expertise that big pharma companies have with regulation and healthcare. However, the pharma industry will not be able to continue to tread lightly as startups and large technology companies continue to push innovation in this space. Companies who decide to take stock in this market will have to decide how to interact with the healthcare space in one of three ways: operating within the current system, providing new technology to hospitals and patients via devices, or developing new platforms through which healthcare can be provided via software and applications. Conclusion: This article will provide introduction to the digital health market, progress in the regulatory landscape and current state of clinical trials in the digital health space, and discuss the new FDA pre-certification program established in 2017. We conclude with some insights on considerations for entrepreneurs who may be interested in this space.

University technology transfer offices have greatly expanded their focus since the adoption of the Bayh-Dole Act in 1980. In addition to filing patents and licensing technology, technology transfer office activities now support translational research and related activities and the reach of these offices has expanded into nontraditional or non-STEM (Science, Technology, Engineering and Mathematics) areas of the university. Seven university technology transfer officers gathered with intellectual property attorneys, private investment executives and technology innovation directors to discuss the latest trends in current technology transfer activities and responsibilities. The discussion focused on: 1) accelerating innovation and best practices, and 2) protection and/or enforcement of intellectual property rights. Discussions revealed that technology transfer offices are becoming more involved in innovation centers to support startup formation, gap analysis, venture, private equity, corporate funding, business development, clinical trial arrangements and atypical industry partnerships. Focusing on customized solutions and employing creative thinking to support various innovative activities has helped technology transfer offices to succeed in supporting the mission of their respective universities. Most universities file provisional patent applications to establish a priority date quickly and inexpensively. This strategy provides inventors with additional time to collect data and gives the technology transfer office time to discuss underlying technologies with prospective commercialization partners to better inform decisions to file a nonprovisional application. Technology transfer offices agreed that decisions to initiate litigation against potential infringers should be made on a case-by-case basis, citing costs and reputation as driving factors in the decision-making process.

Within the last decade, crowdfunding has become increasingly popular in today's technological society. In the United States, there have beena reported 191 crowdfunding platforms; while global crowdfunding platforms have increased from $530 million in 2009 to $2.8 billion in 2012 [1]. This new trend in venture capitalism enables everyday working Americans to become a part of the “next big” company. However, due to their lack of knowledge and familiarity with crowdfunding, these “rookie” investors should not dive into this world without properly assessing their risks. They should tend to err on the side of caution. Some investors are looking to make it big by discovering the next Google, Apple, or Amazon. Other investors' main motivation is to support and promote a local business. Federal and state crowdfunding legislation enables United States citizens to invest in businesses throughout this country. The federal crowdfunding rules and requirements find their source in the Jump Start Our Business Act (“JOBS”) and the Security Exchange Commission's (“SEC”) rules and Regulations (this article will refer to the JOBS Act and the SEC rules as “legislation”). Within the legislation, several safeguards have been implemented to protect investors 1. These safeguards can be divided into three main categories. The first is the prevention of fraud and misrepresentations. The second category is ensuring that the investor is informed. Lastly, the third category seeks to make sure that there are rules in place that make the investors' experience as enjoyable as possible. While each of these safeguards works to provide consumer protection, the initial drafting of the legislation and rules will benefit from modification to strike a better balance between protecting the investor and allowing the issuer improved access to capital. This article discusses possible changes to the legislation that will maintain a sufficient level of consumer protection while easing the process for businesses to engage in investment crowdfunding.