Deal Details
Startup: Responsum Health
Security type: Crowd SAFE*
Valuation (cap): $4.5 million
Discount: 0%
Minimum investment: $100
Where to invest: Republic
Deadline: January 2, 2022
What do you do when your doctor and half of your friends tell you a pill is safe but the other half says it could kill you?
I’ll tell you what I do. I go on the web. Get to the bottom of the disagreement. And make an informed decision.
Ah… if only it were that easy.
My own experience says otherwise. Not long ago, my doctor prescribed a new medication. My wife’s brother — who runs an emergency ward in Seattle — assured me the drug works. But some of my friends in the medical field disagreed. It not only didn’t work as claimed, they said, it also had serious side effects.
I love doing my own research. So I went on the internet to ferret out the truth.
The only truth I found was that the web is the ultimate people pleaser. I started by typing a simple topic, “the truth about XXX.” A dozen articles popped up casting doubt on the medication. Then I typed, “recommended treatments for XXX.” And I got a dozen articles that confirmed its effectiveness and relative safeness.
What just happened? The web knows that skeptics ask for “the truth.” And patients seeking consensual opinion ask for “recommendations.”
The web knows what you want. And it gives it to you. Healthcare is no exception.
We shouldn’t stand for this. There’s no reason why healthcare-related information should be reduced to mere opinion. Medicine is science-based and therefore evidence-based. Separating fact from fiction should be something we insist on.
Yet, things seemed to be trending in the wrong direction until Responsum Health came along. The small startup curates the internet daily and provides patients with “independently vetted, disease-specific, keyword-tagged articles.” It has doctors, researchers, patients, patient advocacy groups and additional medical experts scouring the internet for the latest, most accurate and useful information.
Importantly, Responsum has no axes to grind… no political agendas to pursue… no clickbait to dangle… and no companies it’s beholden to.
And that includes Responsum’s key customers, pharmaceutical companies. They pay Responsum between $100,000 and $310,000 a year under multi-year contracts to help them help patients (more on this brilliant idea in a moment). But these Big Pharma customers cannot influence content. It’s more than just a principle. It’s written into every contract Responsum signs with them.
How It Works
Here’s how it works. Responsum asks a pharmaceutical company to pay for a platform focusing on a particular chronic disease. What do pharmaceutical companies get in return? Well, what they do NOT get is permission to push their own treatments or technology on the platform. But they do get tangible and intangible benefits in return. In no particular order…
- Credibility. Pharmaceutical companies aren’t winning any popularity contests these days. Responsum gives them a rare opportunity to be the face of community efforts that support patient knowledge and help make sure the right information ends up in the hands of those who need it the most.
- Data. Data plays a growing role in understanding how patients feel about their drugs. Through Responsum, pharmaceutical companies can track web behavior like what kind of articles users read. They can gain insights on specific demographic groups while also proactively collecting data by sending out questionnaires and surveys — asking, for example, how patients cope with certain ailments.
- Testing. With Responsum’s help, they can recruit patients faster and more easily for their clinical trials.
All three of those benefits are huge issues for pharmaceutical companies. There are 133 million Americans suffering from thousands of chronic diseases. And many of them don’t trust pharmaceutical companies… with good reason. Pharmaceutical companies grossly overcharge for many of their drugs. They were instrumental in causing the opioid crisis. And they typically only reach out to consumers when they’re trying to sell them something.
There are roughly 4,500 drugs under development. Not all will get to clinical trials, but many will. And recruiting patients can be time-consuming and expensive — causing serious delays for pharmaceutical companies on the road to FDA approval.
Responsum’s platforms lead to far greater market acceptance by allowing pharmaceutical companies to break out of the narrow transactional relationship they have carved out with their patients and customers. It’s a no-brainer. Pharmaceutical companies get a heaping pile of bang for their buck.
Patients also benefit from Responsum’s platform. They get free apps designed to give them the most up-to-date and accurate information on the disease they or a loved one has contracted. They can also participate in “Community Chat” rooms where patients and medical professionals share experiences, advice and support. The app also provides organizing tools, like the “Patient One-Sheet,” to facilitate their ability to track their care and engage efficiently with numerous healthcare providers.
Given all this, it’s no surprise that Responsum is on track to make nearly $1 million this year. After launching just two years ago, it already has four multi-year contracts, another launching this coming February and at least a dozen more under serious discussion. Each contract has its own disease-specific platform. So far, Responsum is covering pulmonary fibrosis, chronic kidney disease, fibroids, the glaucoma community and women with menopause. A sixth app for long COVID patients was launched in March of this year without sponsors. It’s growing extraordinarily fast. Responsum will begin looking for multiple pharmaceutical sponsors in the coming months.
Fixing Our Healthcare System, One Platform at a Time
Our healthcare system is incredibly broken. Wherever you look, there are misalignments. Patients with doctors. Doctors with insurance companies. Insurance companies with hospitals. Hospitals with pharmaceutical companies. And pharmaceutical companies with patients.
Responsum can’t fix the entire healthcare system. But it can help fix the dysfunctional transactional relationship pharmaceuticals have with patients. Against all odds, it has aligned the welfare of patients with the business interests of pharmaceutical companies. I, for one, didn’t believe this could be done.
But Responsum has proved me wrong.
No other company is doing what Responsum is. There are other medical information sites, but they’re not curated. And they can easily succumb to the latest false narrative that has gained currency. Only Responsum has been able to construct a positive role for Big Pharma. It’s a remarkable feat for any company, never mind a small startup.
And credit for this goes to founder and CEO Andrew Rosenberg. He comes from the healthcare policy world. From its failings he formed a vision. And he believes in it so strongly that he poured $830,000 of his own savings into the startup that became Responsum. His dad contributed the remaining $50,000 of the seed capital needed to kickstart Responsum’s first couple of years. That’s what I call going all in.
Responsum’s progress has validated Andrew’s brilliant idea. The company will have made close to $1 million in revenue by year’s end. Next year looks even more promising. It has a strong pipeline of projects with some of the biggest pharmaceutical companies in the world, including Bristol Myers Squibb, Merck, Pfizer, AstraZeneca, Astellas, Daiichi Sankyo and others.
With thousands of chronic diseases to address, the market is huge. The founder’s skin in the game is often a marker of future resiliency. The margins are expected to approach 100% in some cases. You cannot do better than that. If the company makes money, it’s going to flow to the bottom line.
Andrew is determined to make it work. Investors in the company believe it could work. But it’s Big Pharma that holds the key. And Big Pharma would LOVE for Responsum to work. I believe it’s going to give the company every opportunity to succeed.
I don’t think Responsum will need any “extra chances.” It has a plan. And it’s working. Responsum just needs to stick to the plan.
If it does, I predict success will follow.
How to Invest
Responsum Health is raising up to $1.07 million on Republic. If you don’t already have a Republic account, you can sign up for one here.
Once you verify your account and are logged in to Republic, visit the Responsum deal page.
Then click the blue “Invest in Responsum Health” button. Enter the amount you want to invest, starting as low as $100, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.
*NOTE: The security you will be investing in is a Crowd SAFE. A SAFE is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date, in connection with a specific event. The Crowd SAFE is a modified SAFE that is better suited for crowdfunding.
Risks
This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Responsum Health might need to raise another round of funding in a year or two, if not sooner.
If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid.
Expect to hold your position for five-to-10 years. An earlier exit is always possible but should not be expected.
All that said, I believe Responsum Health offers an attractive risk-reward ratio.