Subject: DIVERSITY FUND - Equity financing is rapidly changing


Texas Business Highlight
Science that is "Spot On"

After spending 20 years leading research teams for small and large biotech companies only to witness the destructive aftermath on research after merges and acquisitions, Dr. Jeannette Hill decided it was time to launch her own venture. After enrolling in a university-based entrepreneurship program focused on women-led startups, Dr. Hill founded Spot On Sciences, a biotech company that develops innovative medical devices to revolutionize collection and storage of biological fluids for research and testing. 

The "aha!" moment for creation of the company's first device came as Dr. Hill was thinking about her own mother's medical issues. Her elderly mom, who lived in rural Missouri, was dealing with chronic disease and physical limitations but still needed blood work which meant excruciating trips to a lab. Jeanette knew there had to be a better way to get blood samples from people like her mom: the sick, elderly and those living in remote areas. 

This led to development of Spot On Sciences and a new range of patented devices and processes including groundbreaking improvements in the way that biospecimens are collected for medical diagnostics. Their signature product HemaSpot™, offers simplified remote blood collection by finger stick and sample shipment by mail. This new device virtually eliminates needles and trips to the lab and has already caught the interest of customers in both government and commercial markets. HemaSpot™ has received over $2 million in grants from DARPA and the NIH and has won multiple awards and competitions. Recently, Spot On Science announced a collaboration with the US Military HIV Research Program (MHRP), Walter Reed Army Institute of Research, to support a study for detecting infectious pathogens in deployed troops. 

The company continues on its path to use research to help alleviate human suffering. Spot on!
Diversity Fund News

Anyone who has built a software company from scratch can appreciate the complexities of managing multiple teams, syncing up development and production environments, testing and quality assurance. Sometimes issues occur, but experienced developers know how to quickly respond, recover and ensure that progress continues. 

Diversity Fund experienced a couple of "glitches" last week as parts of our new platform were moved from test into production. However, it didn't significantly impact our plans to launch in October. 

Our team wants to thank our business partners and collaborators for their patience as we put everything in place to successfully launch their offerings to the public and build out remaining parts of the platform. We intend to demonstrate how advances in technology can reduce the costs, and time, needed for business to access capital. 

Be sure to share this with your friends and colleagues as we keep you updated. 
Austin and Texas News & Events

Money Matters

Equity crowdfunding is quickly evolving

Equity financing, historically the reserve of venture capital (VC) firms, investment banks and high-net worth individuals, is quickly evolving under new securities regulations that allow companies to offer equity directly to investors and allow nearly everyone to become investors. 

This has opened up the marketing for equity crowdfunding and there are already large players taking advantage of this new paradigm. Crowdcube and Seedrs in the UK, and EquityNet and Fundable in the US, are just a few examples of what has quickly become a multi-billion-dollar market. 

These platforms have various models. Some allow investors to hold shares directly, while others, have a syndicator or nominee shareholder act on behalf of investors, or as a "lead" to negotiate terms before funding as open. Many portals don't treat investors equally; some providing anti-dilution provisions or voting rights only for large investors, or subordinating small investors. 

The best crowdfunding platforms pay attention to both the investor and the startup, by performing active due diligence, curating deals, and providing direct communication between businesses and potential investors. They also speed up the process of fundraising while opening up deals to smaller investors. 

The rapid evolution of equity crowdfunding is causing some discomfort for bankers, VCs and professional financial consultants as businesses look for alternative ways to raise capital and investors seek better deals. However, in the end general principles still apply: Investors hold responsibility for evaluating risk and determining the value of the investment and startups must be forthcoming with factual information regarding the business, securities being offered and product/services in relationship to the market. 

"Following the crowd" and directly investing in new businesses through crowdfunding is certainly exciting and will be a growing area of business finance in coming years. At the same time, there is still plenty of uncertainty about what these changes will bring. 

One thing is certain - equity crowdfunding is here to stay. 

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