A company creating an “artificial pancreas” for diabetics this week became the first startup to raise $1 million (£0.76 million) using new type of online stock sale open to the public at large.
Beta Bionics, a startup created by Boston University biomedical engineer Ed Damiano, hit the benchmark Wednesday night after 775 members of the public put up an average of $1,300 (£986.27) each to back its idea for a new kind of pacemaker for diabetics.
The company sold shares on the crowdfunding portal Wefunder, which is taking advantage of securities regulations that since May have let private companies easily sell shares directly to the public, not only professional investors.
Beta Bionics could become a test case for crowdfunding and the tech industry’s position that the public should be able to invest in risky startups.
The new process, known as “regulation crowdfunding,” is meant to modernize investing and represents the latest easing of securities laws set in motion by the JOBS Act of 2012.