Crowdfunding firms seek to ‘democratise’ science – and a profit

A new wave of companies is hoping to “democratise” university-based scientific research by allowing investors to buy a stake in future income from patents and intellectual property developed by researchers.

From cryptocurrency to fine wines and even future royalties from pop songs, small investors have sought out some unusual assets of late in pursuit of a financial return. Now, inspired by the science philanthropy that raised tens of millions of pounds during the pandemic – in which crowdfunding platforms such as Fast Grants sponsored dozens of research projects – organisations in the US and Europe are seeking to connect university researchers and investors who can directly fund promising projects.

While many, such as Boston-based New Science and California’s Arc Institute are entirely philanthropic, the Swiss-German company Molecule has made several grants to university research leaders in the hope that this investment can generate a return for its backers – with intellectual property becoming a “liquid and easily investable asset”.

Morten Scheibye-Knudsen, an associate professor in the University of Copenhagen’s department of cellular and molecular medicine, leads a research group that has received $250,000 (£190,000) from Molecule for a project to investigate whether existing drugs could be repurposed to support healthy ageing. He said this business model had the potential to do more than just raise additional research funds.

“It allows everyone – even regular, non-science people – to get involved in science,” Dr Scheibye-Knudsen said. “Everyone will gain ownership of the drug development pipeline, so you might have someone with diabetes who has ownership of the drug they use [after investing].”

By allowing investors – either biotechnology companies, venture capitalists or individuals participating via blockchain technology – to choose potential projects, it could “speed up scientific progress” by funding riskier ideas that might not get support from traditional funders or charities, added Dr Scheibye-Knudsen. “In the crypto community, there is a lot of potential funding available, and the community is very pro-technology and pro-‘out of the box’ thinking. So it makes for a good mix, as they might support science that is more challenging and boundary-crossing,” he said.

“But you need some kind of profit, with someone making money somewhere, otherwise it is not sustainable.”

With investors asking for a stake in the outcomes of his university-based research, it was vital to ensure that the various competing interests of institutions, other funders and participants were understood, warned Dr Scheibye-Knudsen. “My tech transfer office was concerned that there would be a thousand people with an IP claim on my research, so it started sweating as these issues are already quite challenging,” he said, adding that a contract with Molecule was eventually agreed.

Lisa Ericsson, head of KTH Innovation at Stockholm’s KTH Institute of Technology, said universities should be open to “explore new tools to create more impact from research” but should also consider carefully the potential conflicts of interest that these agreements might generate.

“There may be lock-in situations, where one company might own all IP but is only interested to commercialise what’s in their scope of business,” said Ms Ericsson, whose department specialises in research commercialisation and IP issues. “Universities need to be very skilled in IP management to make sure that they have access rights to do future research in this field. Otherwise, they might end up in a situation where they need to ask for permission [to continue work].”

James Wilsdon, director of the Research on Research Institute, said the rise of both new philanthropic and commercial investment in university research was “fascinating” but it was not clear how significant this kind of funding might eventually become. “We already have a very substantial venture capital sector in Europe, and more so in the US, to do this science for things close to the market,” said Professor Wilsdon, professor of research policy at the University of Sheffield.

“These new ventures do reflect a widespread frustration around process getting in the way of creativity in research – Fast Grants, New Science and others force the whole system to raise its game and think more creatively.”

That said, enthusiasm for quicker and less bureaucratic funding models that sidestep traditional peer review should not obscure where the biggest scientific breakthroughs tended to occur, he added. “If you look at the Covid-related research, only a tiny amount of the important stuff was linked to Covid-specific projects – most came from repurposing long-term projects or existing capacity,” he said.

“That’s not as exciting as programmes funded by Fast Grants, but it shows that large, well-funded institutions with deep pockets, as a result of years of sustained funding from many revenue streams, is where most of the important stuff happens.”

jack.grove@timeshighereducation.com