Maybe no one really said equity crowdfunding would one day be bigger than going public on Nasdaq, but whatever the expectation when equity crowdfunding launched a few years ago, the reality has to be disappointing for its champions.

That’s what makes VivaQuant — a medical device maker based in Shoreview now looking to the crowd for equity capital — a story worth following. 

VivaQuant is not anything like the dozen or so Minnesota businesses that have sought funding directly from small investors in the last few years, a list dominated by small craft brewers. VivaQuant doesn’t aspire to be a successful small business.

So it is hard to know what somebody with no experience in medical devices and $50,000 to invest would make of VivaQuant. But it is easy to imagine med-tech pros and even venture capitalists giving it a look. It has an experienced team, a big market for wearable health monitoring to get into and what sure looks like a promising solution to a real problem.

And the people involved knew about venture capital, too. They certainly knew it well enough to make a convincing case for passing.

VivaQuant is still small, but the work has been going on since 2009, started by Marina Brockway. She has degrees in math, physiology and business, and experience working with electric signal processing algorithms including with medical device maker Boston Scientific.

The problem VivaQuant plans to solve is in the well-established market of monitoring patients for heart-rhythm problems like atrial fibrillation. What’s used are devices roughly the size of a chubby smartphone, with wires spreading out on the torso of a patient with a potential cardiac rhythm problem.

The patient wears this device around when going through the day, and it captures information as episodes occur. One challenge is getting the electrical signal data from the heart amid all the electrical noise around a patient, which also can get recorded, explained Arjun Sharma, a cardiac electrophysiologist and adviser to the company.

Monitoring center staff can clean up a recording, but it can take a lot of work and false positives also could result. Some segments of the recording might not be usable at all. One solution to all of this is the signal-processing technology developed by VivaQuant that leaves only the electrical signals from the heart.

VivaQuant’s technology has been used in drug-research settings, both as a way for the company to pay some bills and gain more experience with its technology. Company CEO Brian Brockway, Marina Brockway’s husband, said the device is now in a limited launch with a full launch later this year. The company has been funded so far with about $1.3 million of friends and family investments along with about $1.7 million in research grants.

Among the people Brian Brockway met as they considered options for additional capital was Zach Robins, of the Messerli Kramer law firm in Minneapolis. He has been a high-profile advocate for equity crowdfunding, before and after the 2015 legislation that enabled it in the state. He has since signed on as the company’s counsel.

Crowdfunding can include consumer campaigns on sites like Kickstarter, but equity crowdfunding means for-profit companies get to seek investors among the public over internet sites.

Despite some successes, there are plenty of signs that the idea has had trouble taking off. The managers of the offerings were called “portals” through which the crowd found opportunities, and only one portal now seems active in the state.

Robins said, like everything, how you judge progress depends on what expectation you had three or four years ago. He still sounds optimistic, as the capital-raising challenge crowdfunding was meant to help meet hasn’t gotten any easier. It has not been practical for a long time to sell shares in an initial public offering to individual investors with nothing but a business plan, the way St. Jude Medical did back in the late 1970s.

Brian Brockway seemed to have learned some of what he knows about capital raising the hard way. He founded a company that was bought in a successful exit, but he also was a CEO who tried and failed to go public in 2008.

Brockway has experience with venture capital, too, and last week he slid a copy of a New York Times article across the table that described why company founders increasingly reject the whole idea of seeking venture money. One understanding and supportive venture investor was quoted in the article, yet he still managed to come across as a person you wouldn’t want to meet, saying how he sold “jet fuel,” and “some people don’t want to build a jet.”

The VivaQuant team suspects venture investors will simply want more than seems fair, like preference shares and other terms that let them get paid first.

“I’ve seen situations where venture capital has come in … and the common shareholders who have worked years and years to build value in the company don’t get a lot of money out of the deal when the liquidity event occurs,” Brian Brockway said.

The plan, based on the company’s offering pitch, is selling enough common stock to reach its target of $500,000 raised from the crowd. If the deal goes well and raises $1 million, the limit of what’s allowed, the new investors would get about 7% of the company, valuing the business at $15 million before the investment.

Neither Brian Brockway or crowdfunding champion Robins quite put it this way, but if VivaQuant were based in Iowa this crowdfunding notion probably wouldn’t be tried. It seems to work only when the crowd has a real affinity for what’s being sold, such as beer, or maybe even knows the people involved.

But what they are counting on here in Minnesota are the employees or investors in Medtronic, local operations now part of Boston Scientific, St. Jude Medical and other medical device success stories.

“There’s a lot of civic pride in Minnesota, a lot of people here who made money in the med-tech arena and know what it’s like to get into an early stage company,” Brian Brockway said. “And the kind of returns they can get.”