Rapid Response Funding Partnerships in the Fight Against SARS-CoV-2
As the coronavirus pandemic intensifies, philanthropists are struggling to respond. Nearly the entire world suddenly has the same urgent needs: more and better diagnostic testing, personal protective and respiratory equipment, food supply support, and small business support, to name a critical few. At the same time, we are beginning to see huge systemic flaws in our national and global healthcare system that need to be addressed, both as the next phases of this pandemic play out, and before a future pandemic.
Entrepreneurs, both for profit and nonprofit, are pivoting to meet these needs, and they need funding now. Rapid response funding partnerships by philanthropic funders can be an important accelerant to green light work on these innovations and support entrepreneurs on the front lines of pandemic response. Grant and investment structures tested in the impact investment arena for the last two decades are well-suited (designed, in fact!) to facilitate critical new partnerships needed in this fast-changing landscape.
As legal counsel for Pam and Pierre Omidyar, I spent years (even before the term “impact investing” was coined) designing and implementing innovative philanthropic structures, including Omidyar Network, First Look Media, Humanity United, and the Democracy Fund. Today, I work with a range of high net worth individuals, social entrepreneurs and others who use both nonprofit and for profit vehicles, often in combination, to maximize their positive impact. In response to the current pandemic, I am helping to get money flowing much more rapidly and to think through combinations of grants and investments. In some situations, funders prefer making an initial grant, then having language in the grant agreement allowing the grant to convert to a repayable loan or even equity in the company in the future (rather than making an initial investment in the entrepreneur).
Companies developing products and services critical to help us through the pandemic and its aftermath are facing urgent funding challenges. Here are two current case studies:
A pathogen diagnostics company, Spectral Platforms, has applied an existing, proven pathogen detection and testing technology to SARS-CoV-2. They are close to a new rapid (15 minute) point of care SARS-CoV-2 test that can also help doctors better predict which patients will become more severe, as well as test antiviral susceptibility, and they need funding now to make it happen. The timelines for development are, happily, quite fast. Over the last couple of days, this company has received the green light from the FDA to be considered under their Emergency Use Authorization (some 3 am discussions for sure!). If the trials proceed well over the next few months, there is projected funding through the Biomedical Advanced Research and Development Authority (BARDA), but they need funding to get through those few months. If the company can raise grant capital now, this grant funding can be returned, or converted to debt or equity in the company, when this further grant or additional company funding/ investment comes in. A complete description of the company and this opportunity can be found here.
The founder of another company, Gatehouse Bio, has a non-traditional background and way of thinking that is deeply creative, and his vision and science are consistently gaining validation from trustworthy sources. Gatehouse Bio has gathered together world experts in small ribonucleic acid (RNA) genes, the signatures of which can greatly accelerate matching existing drugs to new diseases. They have formed a broad ecosystem of partners including leading academic researchers at Harvard Medical School and Boston University, as well as a host of industry leaders to join in their mission to cure COVID-19. Gatehouse’s technology can be used to find existing drugs that may be effective against SARS-CoV-2. There are three things that make Gatehouse especially compelling for NCFP community members, especially those of you thinking about rapid response funding for maximum short- and long-term impact:
- The “find off the shelf therapeutics” approach is the quickest possible path for humanity to treat COVID-19 and of those approaches Gatehouse’s is one of the fastest and most innovative;
- Gatehouse is world-class in small RNA technology, a widely applicable solution. For example, large pharma companies are already partnering with Gatehouse to develop therapies for cancer, Alzheimer’s, heart failure, pulmonary fibrosis, ulcerative colitis, and other illnesses—in other words, investment in Gatehouse supports not only COVID-19 but a platform that can have significant impact across a uniquely broad range of conditions; and
- Gatehouse’s highly creative approach is “outside the box” enough that only recently has the scientific community begun to appreciate it. New funding will help an “underdog, outside the mainstream” approach (inherently one relatively more difficult to attract funding for at an earlier company stage). Funding will serve a high need area and extremely high quality, mission committed team.
A complete description of the company and this opportunity can be found here.
These are just two examples of small, early stage companies, with highly aligned founders, for which funding right now has the potential to have a disproportionately high impact. I am hearing regularly from entrepreneurs like these, developing exciting medical, financial, and social innovations that need funding. Some are needed immediately, and some will become critically valuable in later stages of the pandemic, as we confront the secondary health and economic effects of coronavirus. We must invest in these ideas now to turn the current tide, and to be ready for the next stages.
Some philanthropists have already modeled immediate, large-scale fundraising responses. Last week, Sara Blakely, founder of SPANX, announced that she will be giving 1,000 female entrepreneurs in the US $5,000 each in order to support female-run small businesses during the coronavirus pandemic. In order to execute on this idea as quickly as possible, and also invite others to participate easily as donors, she has partnered with Global Giving to oversee the fund and allow it to be open to easy public donation, so that anyone can partner with Sara to bolster these businesses in their hour of need. While not every donor can harness the power of a well-known brand to elevate their cause, many can swiftly pivot to support entrepreneurs developing solutions to the crisis.
Entrepreneurs are pivoting, and now it’s your turn. If you are interested in learning more about how to use these tools and support this critical emerging work, please contact NCFP Vice President Jason Born at email@example.com or Will Fitzpatrick at firstname.lastname@example.org or (415) 793-4607. Coronavirus is relentless and adaptive; humans can be, too.