Get ready for action…
Over the next several weeks, we’re going to break out our “crystal ball”!
Wondering who’s going to win the Super Bowl, or the men’s downhill in the Winter Olympics?
Umm, if so, you might be reading the wrong email…
But if you’re looking for predictions about major business trends – and for advice about how to make money from them through equity crowdfunding – you’ve come to the right place.
Ready for our first prediction?
Here we go.
Get Vertical
There are two main approaches to building a business.
The first is to sell a wide range of products or services to a wide range of people. Amazon is a great example of this: they sell everything to everyone.
That’s called a “horizontal” approach.
But when I send my girlfriend flowers, I don’t go to Amazon. I go somewhere that specializes in flowers – for example, 1800flowers. Companies like this take a “vertical” approach.
Since they focus on one single thing, they become experts in that area. And they can use that expertise to source (and to deliver to their customers) the most relevant, high-quality products.
These two different approaches – horizontal versus vertical – can also be seen with “equity crowdfunding platforms,” the websites that match start-ups with investors.
Let’s look at examples of each, and then predict which direction the wind is blowing in 2014…
From Angels to Moguls
AngelList was one of the first equity crowdfunding platforms, and today they’re still one of the best.
They currently host 30,000+ companies that are raising money. Given the large quantity of deals – and the fact that their companies range from enterprise software to lingerie brands – it’s fair to say that they’re a “horizontal” business.
CircleUp, on the other hand, specializes strictly in consumer products like foods and beverages – from freeze-dried snacks and natural baby food to organic wines. That’s a definite vertical.
RealtyMogul is in a different vertical. They specialize in real estate deals.
And RealCrowd, which we wrote about recently, specializes even further; they focus on commercial real estate deals.
What specialization will come next?
Read on…
The Next Big Vertical
We predict that the next big equity crowdfunding vertical to emerge in 2014 will revolve around the $2.5 trillion market for healthcare and “life sciences.”
This is a natural sector for specialization. Healthcare is incredibly complicated and requires an encyclopedic understanding of (among other things):
• Medical research
• The FDA approval process
• Government healthcare policy
Two platforms that focus on this sector have been on our radar for some time now.
Let’s take a look at each.
Poliwogg
Poliwogg has a penchant for healthcare – and that’s no surprise given their CEO’s background…
Gregory Simon, Poliwogg’s founder and CEO, has experience as a senior executive at pharmaceutical company, Pfizer. He’s also been a healthcare entrepreneur.
Beyond that, he has extensive experience overseeing healthcare initiatives as a member of Congress and the White House. In fact, Simon was involved with programs spanning the National Institutes of Health, the National Cancer Institute, and the FDA.
In brief, Greg has a broad wealth of knowledge covering everything from healthcare and healthcare policy, to drug research and drug development.
With a CEO like Simon, Poliwogg’s deal flow in the healthcare sector is likely to be strong – and he’s likely to have a good sense for what might be successful.
This benefits you. If Poliwogg brings in strong deals, that means less research and less worries for you – and potentially, it means better profit opportunities.
Something Ventured…
Another platform focusing on life sciences is VentureHealth.
The platform’s founder, Mir Imran, has been in medical technology and healthcare since the late 1970s.
In fact, Imran is one of the world’s leading healthcare inventors and entrepreneurs. He holds more than 200 patents, and has founded more than 20 medical device companies.
Even more impressive: 15 of his companies have gone public or been acquired.
He’s also founded a research lab and a life sciences venture fund, sits on the board of many “med tech” companies, and is Chairman of a product development company that focuses specifically on medical devices.
Just like with Poliwogg, the founder’s specialized background adds up to better deals for you.
And More Predictions
Poliwogg and VentureHealth’s management teams have strong sector knowledge and deep connections to government and industry. This gives them an advantage in identifying and vetting healthcare start-ups, and in understanding the market potential of a new drug or medical device.
Equally as important, their vertical focus means that – when the time is right – they’ll know where to go to secure a key partnership or additional funding on behalf of the start-up, or how to create a merger or sale.
These types of advantages are significant – which is why we’re predicting that other platforms will jump on the verticalization trend, too.
Reflecting These Predictions At Crowdability
Given our excitement about Poliwogg and VentureHealth, we’ll soon be incorporating some of their investment opportunities into Crowdability.
We hope there will be some exciting money-makers in there for you!
Until then, visit both Poliwogg and VentureHealth directly »
Here’s to a happy, healthy, profitable 2014!
Best Regards,
Founder
Crowdability.com
