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Researchers look to the emerging phenomenon of "crowdfunding" to pay for their work
September 1, 2012|
Gerry Carter has been successful in securing a number of small grants—from the likes of Sigma Xi and the Cosmos Club Foundation—to fuel his graduate research on vampire bats. But funding is still hard to come by. “I actually took a leave of absence as a student to go into the field because I didn’t want to pay tuition at the school,” he says. When Carter heard about a new website called Petridish (www.petridish.org), which solicits donations for research through the Internet, he decided to give it a whirl.
He produced a three-and-a-half minute video explaining his project. In it, vampire bats cuddle in groups as a successful hunter shares her meal by regurgitating blood, which the others drink from her mouth. In his narration, Carter explains that he’d like to explore this system of reciprocal altruism, in which bats share with each other, relatives and non-relatives alike. Carter’s goal: to raise $4,500 to pay for staff to care for a new colony of bats at his University of Maryland lab and to analyze DNA sequences. And he has just a couple of months to collect the dough.
“We have all-or-nothing funding,” says Matt Salzberg, the cofounder of Petridish. That means that if a project doesn’t meet its goal within a preset deadline, “nobody’s card gets charged.” It’s a typical model for so-called crowdfunding sites. An inventor, a moviemaker, or a scientist puts an idea out there, does some social-network marketing, and hopes the project will inspire people to donate. In return, donors can earn rewards. For a $600 pledge, Carter offered naming rights for one of the bats; for $1,000, he will acknowledge funders in a scientific paper and give them a tour of the lab.
The idea of crowdfunding scientific research has taken off. In Petridish’s 6-month history, 80 percent of projects have reached their funding goals, says Salzberg. Donations average $70, but some generous benefactors have pledged thousands. Petridish takes a 5 percent cut, but only if the project hits its dollar target.
Other successfully funded projects on Petridish include a proposed DNA analysis of wolves on an island in Lake Superior, for which researchers raised more than $10,000. A Yale-based group raised more than $7,000 to test neighborhood wells and ponds for household chemicals, such as detergents and medications. And an astronomer raised more than $12,000—$2,000 higher than his goal—to search for moons outside of our solar system.
A few other sites have joined Petridish in the scientific research crowdfunding arena. Sites like scifundchallenge.org, theopensourcescienceproject.com and fundageek.com are similar to Petridish, but each has its own variation on the theme. Fundageek, for instance, allows researchers to keep any funds it raises, even if they fall below the goal. “We’ve had a number of projects already succeed,” says Daniel Gutierrez, the founder and CEO of Fundageek. “It’s a modest number right now, but they’re ones that we’re proud of.” Gutierrez says he sees crowdfunding as being especially useful to undergraduate summer projects, given that they are usually inexpensive.
For researchers with commercial projects on Fundageek, the all-or-nothing policy also applies. In contrast to other types of group investing, project owners keep all of the intellectual property or profit that results from the funding, making crowdfunding more akin to charity than to investment. Gutierrez says that legally he can’t offer donors equity in any of the projects they fund—yet. But the Jumpstart Our Business Startups (JOBS) Act that President Barack Obama signed into law this year will allow US companies to raise up to $1 million through crowdfunding and will give donors a chance to earn a return on their investment.
Brad Webb, a partner with Claremont Creek Ventures, which invests in life sciences companies, sees a role for crowdfunding to help businesses get launched. Often, start-ups will get their initial funds from so-called “angel investors,” wealthy individuals or groups of people who pool their money together to invest. As a company grows, “we’ll often follow in the footsteps of angel groups. So I think the crowdfunding, if it works—and nobody really knows yet—will fit right into that niche,” Webb says.
In June of this year, Carter successfully met his funding goals for the vampire bat project, and even exceeded them by nearly $200. “I was astonished. Within the first week, somebody I didn’t know on the Internet donated like $1,000,” he says. The exercise showed him that sometimes humans can act just as generously as bats.