🍄 Psychedelic-tech, crypto startup ideas & more
Founders Factory Startup Bulletin #5 (December)
👋 Welcome to the Founders Factory Startup Bulletin. Each month, we bring you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.
In the early days of train travel, experts feared the effects of high speed travel on passengers. They believed human bodies couldn’t travel in excess of 30mph—anything over that, and passengers would be torn in half, or even melt.
Fear can be one of the biggest obstacles to innovation. New technologies and inventions have always been followed by waves of fear, often fuelled by political agendas or a lack of understanding.
We’ve seen this in two areas where we’ve invested recently at Founders Factory—cryptoassets and psychedelics. Both widely known, widely misunderstood, and as a result, often disavowed by the mainstream. By highlighting their benefits when applied properly, we’re hoping to usher their adoption into the mainstream through ways that can solve common problems for consumers.
Here’s what you can read about in this month’s newsletter:
Why psychedelics and technology could solve the mental health crisis
Crypto business ideas for founders
Our top reads—from essential DAO resources, to common mistakes around DEIB
All the latest fundraising news, product launches, and investment updates from Founders Factory
Nick von Christierson, CEO and co-founder of Woven Science, outlines why he believes once-outlawed substances could help tackle society’s mental health crisis.
The mental health crisis is taking a grip on society. As many as 1 in 4 adults are believed to live with mental illness. During COVID, adults in the US reporting symptoms of depression and anxiety increased from 11% to 41%
Psychedelics offer novel ways of treating symptoms of mental illness. Here’s why I believe that psychedelics, combined with technology, could provide an answer to tackling the mental health crisis.
There is a huge unmet need for treatment
The gap widens everyday between the demand for mental health care and the reach of existing treatments and clinics. Nearly a quarter of adults suffering with mental illness face an unmet need for treatment. Antidepressants, once considered a ‘magic pill’ cure, are only effective for 20-to-30% of adults.
The medical benefits of psychedelics is proven
Research into the therapeutic benefits of psychedelics dates back to the mid-20th century: but any progress came to an abrupt halt during the War on Drugs in the 70s and 80s.
The benefits, however, are clear. Trials for MDMA as a treatment for PTSD were overwhelmingly positive: 88% of patients had a ‘meaningful reduction’ of symptoms. Ketamine, meanwhile, was found to have a ‘robust and rapid’ impact on symptoms of depression.
Psychedelics are already being administered as treatment
Investing in psychedelics may feel like investing in the future—but their use in medical scenarios already exists. Ketamine was granted a ‘breakthrough’ designation by the FDA, allowing it special acceleration towards legalisation on account of its substantial treatment advantages. There are already 2000 Ketamine therapy clinics in the US. MDMA was granted a similar breakthrough designation, and is on course for legalisation in the next few years.
Technology will support and widen access to therapy
Just as telemedicine has transformed access to wider medical treatment, technology will play a huge role in the uptake and delivery of psychedelic-assisted therapy. There’s already a number of exciting startups in this space: Field Trip, combining drug development and clinic support, has already raised $20 million in the US.
In partnership with Founders Factory, we recently launched the world’s first venture studio and accelerator around psychedelics: through this, we hope to develop the next cutting edge technologies to support and widen access to therapy.
The first success stories will have a snowball effect
The psychedelics community has seen its first great successes. MindMed became the first psychedelic pharmaceutical company to go public in 2020. ATAI Life Sciences, another drug developer, recently raised $225 million at a $2.6 billion valuation.
As an industry, we are stronger together, and so one company’s success is everyone’s success. At Woven Science we’re investing in collective ecosystem growth, in the belief that through providing resources, support, and access to investment, we’ll all benefit in the long run.
Barely a day goes by without the latest product launch, cryptocurrency craze, or NFT drop hogging the headlines. As the market continues to grow, so do the number of opportunities for founders. Fintech expert and FF strategic insight lead Sarah Kocianski breaks down three exciting cryptoasset startup avenues to follow.
1. Embedding cryptoasset products and services
Founders should think about how to offer cryptoassets at a point where it’s most relevant to customers—such as savings or investments. Look at US digital-only bank Current, who are offering customers a high yield account where returns come from converting fiat into stablecoins.
Essentially, this comes from engaging with decentralised finance (DeFi), offering customers a way to make money work harder for them without going through the resource intensive process of providing the service itself.
2. Smoothing access to cryptoassets
One of the more off-putting aspects of investing in cryptoassets is the number of steps it takes. Cryptoassets can be bought relatively easily from an exchange, but doing something further with that crypto requires moving it to a wallet before engaging with yet another platform to access other assets like NFTs.
Startups that are able to remove the number of steps involved will be welcomed. So will those that can make DeFi easier to interact with overall (such as enabling third parties to embed fiat cryptoasset purchases into existing customer engagement channels).
3. Developing value-add products and services
As the ecosystem grows and matures, so will greater need for services like:
Tax - companies like CryptoTax offer tax calculators, but as consumers’ cryptoasset holdings become more diverse, there’ll be a growing need for startups to meet this demand
Protection - as cryptoassets become more commonplace in portfolios, people will want to know there is protection in place as with traditional investments
Investment advice - this is scarce for ordinary consumers, and will be well received for crypto-specific advice
🐦 Tweet of the month
📚 What we’ve been reading
DAOs, A Canon (Future) - an essential collection of resources for “those seeking to understand, build, and otherwise get involved with decentralized autonomous organizations”
In change, beware conflating uncertainty with risk (Nobl Academy) - how to navigate the perils of uncertainty without letting it consume your strategy
4 common DEIB mistakes startups can avoid (TechCrunch) - advice on build diversity, equity, inclusion, and belonging into your company from CEO of DEIB consultancy Peoplism
6 rules for hiring growth (Lenny’s Newsletter) - tips for companies building their growth teams written by Elena Verna, ex-head of growth at Miro and SurveyMonkey
Sequoia productive capital (Stratechery) - exploring the role that Sequoia and other VCs are playing in transforming the modern economy
💸 News from the Founders Factory portfolio
Hirestreet launched a partnership with M&S to help launch their clothing rental offering
Eco platform Pinwheel officially launched at COP26 in Glasgow, bringing together a community of like minded individuals to act around climate change
We hosted our Power to LGBTQ+ Founders event - hosting 132 Zoom meetings between founders and top VCs, as well as six live masterclasses. Find out about and sign up for our Power to Black Founders event on February 22nd 2022.
Enso Connect raised $1.6 million to help build out its platform to enhance insights for short-term rental operators
🗓 Opportunities for founders
Power to Black Founders (change of date: February 22nd 2022, London) - this Founders Factory event brings together black founders with top VCs and investors for 1:1 office hour sessions, business masterclasses, and networking
See you next month 👋
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The Founders Factory Startup Bulletin brings you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.