Questions 37 to 43. Read the text below about crowdfunding for biotech start-ups. Choose the best sentence to fill each of the gaps.
For each sentence, mark one gap (37–42) where you think this sentences can be included in the text. Do not use any gap number more than once.
There is an example at the beginning, (0).
Example: H The hard part is raising the money to keep the experiments going - corresponds to gap 0 in the text.
Biotech start-ups look to crowdfunding.
by Andrew Ward
For young biotech companies starting on the long journey of drug discovery and development, cracking the science can be the easy bit. (0) H Lysimachos Zografos, a Greek computational biologist at the University of Edinburgh, thinks he has found a modern solution to this perennial challenge: crowdfunding.
When the 32-year-old was seeking money to research Parkinson's disease, he turned to a website called ShareIn which connects entrepreneurs with willing investors. (37) So far, he has raised just over £60,000 from 47 individual investors and three charitable trusts towards the target of £100,000.
Mr Zografos says equity crowdfunding can help bridge the notorious ‘valley of death’ that separates early-stages enterprise from long-term funding – a challenge that is especially acute in the high-risk, capital-intensive world of life sciences. (38) ‘Once you are more advanced and raising millions, more money follows. But getting to that stage is very difficult.’
Barry James, founder of the Crowdfunding Centre, a 35-research group, says there has been scepticism about whether alternative finance would work in life sciences, given the high risks, heavy capital needs and long development timescales.
But he points out that biotech companies have the potential to tap investment from people with a personal stake in helping tackle a particular disease that affects either the individual or their family.
Equity crowdfunding differs from charitable giving in that investors receive shares – and the possibility of a future financial gain – in return for their money. (39) And the prospect of ordinary people making emotionally charged bets on 55 highly uncertain medical science is sure to increase nervousness among regulators about the risks involved in alternative finance.
The UK's Financial Conduct Authority last year issued a warning to investors in equity crowdfunding that ‘it is very likely that you will lose all your money’. (40) Mr Zografos says that, while most of the investors in Parkure have some personal motivation for supporting Parkinson's research, they are also mainly people with experience in business or finance, and with money to spare.
(41) This is borne out by the fact that the sums raised so far are a fraction of the tens of millions of dollars needed to get a medicine into clinical trials and the hundreds of millions, or even billions, more to bring it to market. Moreover, while crowdfunding can help entrepreneurs avoid ceding control to venture capital investors, it can also create its own problems by dispersing the shareholder base among many small investors. Sophie McGrath, partner at Brown Rudnick, the law firm, says this could deter venture capital companies or big pharmaceuticals from coming in later if larger-scale funding is needed – or if the founders want to exit. But Mr Zografos is convinced that crowdfunding has a role to play. (42) Parkure uses fruit flies that have been genetically modified to develop Parkinson's disease so as to identify potential benefits from medicines already in use for other condition. (article adapted from Financial Times)
A ‘The hardest part is the first £100,000 or £200,000,’ he says.