The New Look of Health Philanthropy

Bootstrapping, family, friends, fools, and angels are the tried and true sources for early biomedical and health seed stage funding. But, like all things health, change is in the wind and new early stage funding places and platforms have erupted, for example, equity crowd funding, philanthropreneurs, and venture philanthropy.

Both askers and givers alike are realigning their strategies to meet mission-driven goals. Givers want to make investments, not donations. They want to see measurable returns on those investments and are shying away from long-term endowments. They plan to double down on wicked problems and don't expect the funds to last in perpetuity. What's more, the action is not just at the top end of the net worth chart. Many universities, nonprofits (like the American Heart Association), and professional associations are finding that small donations using Internet technologies can yield big gains. Just ask President Obama's finance chairman.

Biomedical and health entrepreneurs should locate philanthropreneurs and venture philanthropists on their radar. In addition, we are likely to see for-profit arms of not-for-profit professional medical associations as new sources of seed stage capital to jumpstart more risky innovative ideas submitted by their members.

Receivers will have to build a product that, like any successful product, meets or exceeds the expectations of the target customer segments and offers a value proposition that solves their problem or gets their job done. Entrepreneurial universities and professional associations need to find the right product-market mix. Given their cultures, that will be painful.