Yesterday the news broke about our most recent investment, CrowdRise. I wrote a bit about it yesterday on usv.com. I thought I’d add some thoughts here as well.
Many of our best investments came to us over time. We did not invest the first time we met them, or the second, or the third. CloudFlare was like that, SoundCloud was like that, Behance was like that. Zynga was like that. FeedBurner was like that. And CrowdRise was like that. I told the story of how I met them in 2010 and we did not invest until 2014 in the usv.com post yesterday. Many things, like wine, get better over time. And when you wait on them, these companies often turn out to be great investments.
Another thing about this investment that feels right is the domain. We have been early and consistent investors in crowdfunding at USV. We like everything about this category of company. We like the democratizing aspects of a true marketplace model. We like that it supports discovery, curation, and personal connections between funders and fundees. We like that we have become recognized domain experts and have been able to invest in some of the very best companies in this sector. It was our early expertise in this sector that led to our first meeting with CrowdRise back in 2010. If you go deep on a sector that you really like, it pays dividends, again and again.
But the thing that feels most right about CrowdRise is the impact that this company and their service has on the world. Yesterday, runners in the Boston Marathon raised over $25mm on CrowdRise. If you click on that link you can see the runners, the charities, and the teams that collectively made up that massive expression of generosity. These are not fatcats donating millions to their favorite cause (which is totally fine by me!). This is everybody giving 10s and 20s in a scale that adds up to $25mm+. This will happen again at the NYC Marathon, The Ironman Triathalon, and a many other events that will take place this year.
While events drive a lot of giving, they are not everything that happens on CrowdRise. As regular readers of AVC know, we have been raising money for CSNYC on CrowdRise. If you feel generous today and want to support expanding CS education in the NYC public schools, please head over to CrowdRise and support our cause.
Everyone on CrowdRise has a profile. Here is mine. It does not show individual gifts, but it does show the fundraisers I have run on CrowdRise. Over time, I hope and expect that these profiles will live up to Edward Norton’s vision that he shared with TechCrunch yesterday:
“‘Facebook’ is who I am as defined by my social life; ‘Linkedin,’ is who I am as defined by my [business] life; and ‘CrowdRise’ is who I am as defined by my activist life,”
If you are active on CrowdRise, I would encourage you to fill out a profile for yourself and start doing online fundraisers for your favorite causes. It’s both efficient and fun. And that’s a powerful combination.
reflecting on another recent post, do you see this company eventually being taken to the public markets?
It could. No reason why not
My concern is am trying to crowdrise for a project in Kenya fw.to/0uemYZj Am not based in US,so how can I link my account?or this is purely for US account holders????
This is a super important service because there are so many causes that deserve to be supported. I have 2 wishes for them:- grow globally esp in developing countries where support is needed- accept Bitcoins as a donation currency
I’m a Bitcoin believer but I question whether its way to market acceptance is to become just another currency plug in.If sites just start adding a button for Bitcoin, next to PayPay or CC on one level, I wonder whether this will simply confuse the mass market.
Adding Bitcoin buttons and options is exactly what’s needed. For Bitcoin users, it’s easy to use that option.For e.g. , this Bitcoin micro-transaction service is poised to challenge the PayPal Donate button http://changetip.com/ . I’d like to see it in the Disqus comments, i.e. by referencing @changetip and amount in the comments, I can give you 5 cents for your great comment, etc…
I believe that the general market can absorb deeply technical info easily if they have a source and leadership.If there is a link, that i could put next to a Bitcoin button that explained what it was to everyone I agree. If not I’m not convinced this is other than uncertainty following confusion.
Completely agree about the global part. The transparency offered by crowdrise makes it very compelling to donate money to international causes
Crowdrise is the tech platform. There are already charities that cater to developing countries. So I think a better way to state your first wish is to say that you hope the Crowdrise platform is adopted by charities that support developing countries, yes?
yes, but they need to push and target/cater to that international market specifically so it gets adopted. and they need to increase their brand visibility in those markets. maybe this last investment will help them to do that.
I see your point.But as a for profit business, I think the wiser move would be to establish themselves as the platform for most of the US-based charities and then expand, as most US-based businesses would do. This won’t hurt foreign aid, as many charities in the US cater to developing countries.And as a platform that makes giving easier for consumers, well, the givers are not in the developing countries, much. So brand visibility in developing countries may not be something they’re thinking about right now.
Why not expand now?People in developed countries have money. Those in developing countries need the money. Whoever connects both sides is a great broker.
dunno–This is a community based platform. You need to go to where the market is not to where the outliers are.
As an African – the problem with international aid and development in the developing world has never been a lack of money. There’s money floating around all over the place. It is the true implementation of projects which is the struggle. I can see politicians and NGO’s licking their lips at the thought of yet another revenue stream in the form of crowdrise. I am with @awaldstein:disqus in that this should be a local community driven platform.
What’s more important is what is done with the money afterwards, therefore accountability of what is happening with the money – all money spent being public would be best, who’s bank accounts does it go into, what products is the money spent on, etc..
I am all in on this Fred.I believe that contributing is a behavior that can deepen community. I plan on trying this both in my investments in the wellness sector and extending my personal networks of support for animal rescue resources.Question–does anyone know of a platform for doing this on a local level–supporting capital improvements at our local business for example. I very interested in getting involved if there is one.
i like it because it helps to begin to unbundle centralized power that accrues through the tax system. the citizen decides, not the bureaucracy.
Isn’t that the core premise of crowdsourcing in general?But certainly I agree.
perhaps we need a fork at this juncture in the crowd concept.V 1.0 consumer financing V 2.0 citizen fundingfor me the flow is reversed in 2.0, and is much more powerful. 1.0 is driven by an in to out request, and 2.0 by an out to in demand. that’s just the way i interpret the dynamic differences. subtle, but different, maybe.the political class may have a big fight on their hands to retain relevance.
Need to noodle on this. If you substitute community with citizen it gels more for me.
That what we were trying to do at Funding Community (which we are currently winding up), which was a combination of interest + rewards to support affinity-based lending to local businesses. Smallknot and Lucky And (now Moola-Hoop) are also pushing in the same direction. Lots of others sniffing around the space, but it’s a tough nut to crack.
Thanks Alex.Yes, a tough one for certain.This is not a tech play–I looked at Smallknot the other day and it felt like a band aid on a need at this point. Sure the mechanics are there but it was starting there, not with neighborhood that is the core currency for this.
How do you think about decentralized applications as it relates to crowdfunding? It seems to me that the blockchain and proof-of-work/stake/resource has the potential to disrupt “crowdfunding 1.0” companies and completely remove the need for third-party services to verify crowdfunding projects. This will likely take a long time and I think its likely the crowdfunding 1.0 companies still have great days ahead of them, but I’m curious if this is something you are thinking about it. This morning, an ambitious company called MaidSafe became the first major company to crowdfund on the Mastercoin protocol.With that said, I love CrowdRise and hope that it can be the first major crowdfunding platform to enable charities and non-profits to accept bitcoin.
CrowdRise and MaidSafe are very different, although both enable a crowd-funding of sorts.Yes, decentralized apps have potential, but the challenge will be on the marketing front and getting visibility. Their potential will be greater where they allow us to do things that weren’t possible before. They aren’t a replacement to existing services that work well and are achieving critical mass (e.g. Kickstarter, CrowdRise).
Marketing is always the challenge.As someone smart said somewhere–most startups fail cause they can’t discover their market, most establish brands fail cause they loose it.
great quote. who said that?
I’m attributing this to everyone as I can’t remember. Although maybe Albert Wegner in your interview of him.
Mastercoin is a layer on top of bitcoin that enables companies, groups of people, or individuals to raise money without a third party. I wasn’t comparing it directly with CrowdRise. I was simply highlighting that this type of layer on top of the bitcoin protocol has the potential to remove the need for third party services that generate revenue from verifying crowdfunding transactions long-term. Of course marketing is a challenge with all early stage technology!
Got it. I’m very close to the crypto 2.0 and decentralized apps movement. What we need is for more of these apps to emerge. The vision is great. Now is time for implementations.
The secret to Kickstarter is not the marketplace functionality. It is the collective expertise of the community of funders and their shared passion for backing creators and their creativity.Kickstarter could, over time migrate from the credit card system to the blockchain system. But that is plumbing. What happens on top of the plumbing is where that magic isWe see that same magic, with a different community and set of passions, on CrowdRise. That’s what we look for in our crowdfunding investments
Fred, it sounds like you’re saying the secret to Kickstarter’s success is great marketing, despite the founders denouncing the word publicly (to their detriment).This makes perfect sense, as technology is only an enabling component of a set of values and beliefs that ultimately attract people to the service.
Thanks for that Fred, super insightful.I actually think that similarly, the collective expertise and passion of the bitcoin community is the most exciting aspect of bitcoin. Many argue that a “Bitcoin 2.0” will emerge and disrupt the Bitcoin payment network. As you know, the engaged and passionate bitcoin community is going to make that extremely difficult.
Hey Fred, would you say that the reason you waited so long to invest is because over time you’ve realized that marketplaces are ‘winner takes all’ bets and that you wanted the odds to be stacked in your favour, and would rather make a bigger bet at a later stage when it is more clear who will win?There are lots of fund raising platforms around, it just appears that this one has the critical mass…
that is certainly part of it
Congratulations on the investment, Fred! I guess this is the one you were talking about in the interview.. and it looks like another USV-Spark team up.
yup. and Index too.
Congrats on this new investment. This is certainly one of those that I think many people will cheer for because of the sheer importance of charities in many parts of the world. I can see an instant use for this in raising money for research causes such as cancer research. This area has been plagued by many inefficient practices and is not transparent – For example it is not uncommon for cancer research charities to spend more money on fundraising that what’s actually left to spend on research!
Congrats Fred. Sounds like a solid team with a clear vision.It be awesome if the recruit a good product designer to help them bring their ux/ui up to level with all of the great stuff they got going on for them.
Let me guess, the first time they presented they said they were Kickstarter for Personal Causes
no. we had a breakfast that was arranged by a friend. Edward just went into the backstory of how they got started
was making a tongue in cheek remark from a previous post you had-since you didn’t invest right away. Should have remembered my Prof Nick Epley on mind reading! http://faculty.chicagobooth…
Edward Norton’s quote about our online identities and how we delineate our characters on each network and its nodes is superb.Plus this platform, potentially, could partner with and enable the bluechips to implement their Social Corporate Responsibility initiatives similar to how JustGiving.com does in the UK.It takes time for a founding team to find their feet and their pace in the marathon and also time for the investors to develop their coaching knowhow too, and then when the time for both parties is right………..The race gets won. Congrats to Crowdrise and to USV.
I read the post and when I saw Ed Norton I immediately cued up American History X as the movie of the evening. A beautiful and important film.
Congrats on the investment.Getting non-profits on-board can be a challenge. They are historically slow to adopt new tech and to associate their names (reputations) with new things. My startup in 2000 was in this space and the above issues were our biggest and most surprising challenges.
Are charities only allowed to create Fundraising campaigns on there then? It looks like they allow people to personally accept money too.
Great to see your involvement in the crowdfunding space! Me and a friend have been working hard on a different take that we believe could have greater potential impact(bringing in crowdsourcing components as well). A crowdfunding platform for contests ala X-prize. Hopefully in a few weeks we’ll be ready to launch and see where it goes.I am curious to get people’s opinion though. How likely are you to contribute for a contest/challenge prize? Would you pitch in a few bucks for a competition prize that gets awarded to the first person to land on Mars or to solve a specific scientific/humanitarian/technological problem?
a lot of people have tried that with no successes to date.
First rule of Fight Club? Anyone?http://mentalfloss.com/site…
you just broke the first rule.
Giving people the ability to contribute 10’s and 20’s without some sort of bureaucratic entity guarding how large amounts of capital can be applied, is what crowdfunding is all about. This will challenge all managers of capital, Wall Street, VC’s, everyone. The current revolution is the most peaceful redistribution of power that the world has perhaps ever seen.
If it was anything like the movie primal fear the pitch by Edward Norton must have been mind blowing. What is the exit for a company like crowd rise. Can a company whose focus is the nonprofit sector be a publicly traded company
i believe so
All of the university funding financial institutions…SallieMae, etc. Also technically any company which provides equipment to US research labs associated with 501c3 universities….
Nobody likes Sallie Mae. Crowdrise first and foremost has to be liked by its users. it will be a delicate balance.
I assume that Fundraisers can only be created and money collected for registered charities? This is why on Kickstarter you can’t use the word donation.
not any more. they have opened it up to a wider set of “causes” recently, like raising funds for a sick friend who can’t pay his or her medical bills
Ah, didn’t know that.
That’s like GiveForward.com
Just was reading in the paper about the pick up driver beaten in Detroit, whose family has raised almost 200K in medical bills. Was wondering if it was CrowdRise, but turns out it is GoFundMe:http://www.gofundme.com/81r9sk
OMG. Every elected official should review this page:http://www.giveforward.com/…
This just popped up for me as I have been editing my campaign – still shows in their rules:’What is not allowed?Kickstarter cannot be used to raise money for causes, whether it’s the Red Cross or a scholarship, or for “fund my life” projects, like tuition or bills.’If they mean to allow raising for a sick friend for medical bills, I’d imagine they should clarify that as I’d categorize that a “fund my life” project.
Great tagline: “If you don’t give back, no one will like you.”
yeah, they have a flair for marketing
and timing it seems 🙂
Where is CrowdRise based? LA? Detroit? Distributed offices? Love their concept and, more importantly, how they’re executing on it.
Product and Eng is in southern California and run by Jeffrey WolfeThe rest is in Detroit and run by Robert Wolfe who is the CEOThey are serial internet entrepreneurs and bothers and big Detroit and U Mich sports fans
I’m not sure any deal has ever been done quickly while I was at USV. Of the companies that have grown to a material size: Foursquare was a slow process. Meetup was slow. Twitter was slow.The very-close-but-not-quite-right passes were also slow. It’s Slow Capital ( http://avc.com/2009/10/slow… ).The only exceptions I can think of ( for the thirty companies when I was there during initial investment ) are maybe: Clickable and Tumblr.
We debated and discussed clickableTumblr was fast. Bijan said “do you want in?” And we said “yes”
There’s a lot of crowdfunding platforms for nonprofits, causes, and individual appeals. A few of them do it cleanly and smoothly–this is one of them and it’s really interesting to see it raise this level of funding.Another is an NYC company called http://www.Causevox.com, which does a great job with a small team. I played in this space last year, and can say it’s really fulfilling but very difficult to develop the kind of traction needed. Hats off to the CrowdRise team.
Phonebloks;https://phonebloks.com/en/g…Project Ara;http://www.projectara.com/Both are the attempt to create modular smartphones. Phonebloks is crowd sourced and community, and Ara is a Google ATAP initiative.I wonder which is more likely to succeed?
i was one of those Boston Marathon runner-fundraisers… http://bit.ly/reecerunsbostondefinitely enjoyed using the platform and it was great for our team (The Red Cross). together, we raised almost $300k (from a team of ~50 i think)
rumor is that your time was quite notable!
3:33 a PR for me in the marathon (sample set of 2). happy with it overall, though a little disappointed that i got dehydrated/cramped in the end and had to walk a little.. was hoping to break 3:30
Sounds great – I was looking for something link this, last year ( as I will later this year), I was raising funds for a YMCA sleep away camp. The Camp has about 1500 campers over the course of a summer….and about 15-20% of the kids that attend get to camp on scholar ship. These are kids from both sides of the tracks ( as the GothamGal may say).I was doing an email blast to friends and family members – and I wanted simple web based app so that people could easily donate online…I tried using donors choose – but this cause did not fit their requirements).
My concern is am trying to crowdrise for a marathon with lions,cheetahs,rhinos & other wild animals @Lewa in Kenya fw.to/0uemYZj Am not based in US neither am I am citizen,so how can I link my event to my account?or this is purely for US account holders????Being that as it may,my friends in Africa cant help fund raise because of the above?
Fred, what made you change your stance of “never ever ever ever” investing alongside corporate venture firms? The story seems to indicate you let a couple into this deal.In any case, seems like a great company with a huge potential impact.
Rather than Africans like me who want to raise for an event through http://www.crowdrise.com/fa… We should have a crowdrise platform unique to African payment system from US.Another challenge with crowdrise is to get people to back your project yet you don’t know them formally.How this can be addressed?Still need backers for a marathon in the Kenyan jungle to run with lions,zebras,cheetahs& other wildlife @Lewahttp://www.crowdrise.com/fa…
Nice to see another African on here! I thought Lewa marathon did quite well already in terms of backing? Oh, and Kenya has few/no jungles…..especially up in Lewa! More desert, savannah and woodland. Don’t dumb yourself down for the Americans 😉
I am not fundraising for Lewa,thats the event,we run to raise funds for rabbis vaccination,glad that you have run with lions,let others also enjoy the thrill.
Can individuals harness Crowdrise for political donations/contributions?
Thanks for the tip, Fred. Here’s my CrowdRise campaign; i hope you will all take a gander at my effort to encourage literacy.http://www.crowdrise.com/au…
it isn’t entirely clear what you are funding. is this a charity or something else?
It’s a literacy model that I developed that plays out as both a for- and non-profit.I have built a team and am seeking funding for marketing and technology for the for-profit:http://auntmimisbookclub.com- and funding for the legal and administrative fees to get 501(c)3 status and to apply for grants, for the non-profit.http://auntmimisbookclubclu…I listed it on Crowdrise as a personal project; I found neither the personal/individual nor non-profit designations to be a true fit. Do you have any pointers there?
i’m wondering if the for profit effort is a better fit for kickstarter than crowdrise
Yeah, I’ve looked at Kickstarter; their guidelines are fairly strict. No ecommerce; everything has to be “creative” and to come a conclusion in some sort of final product: https://www.kickstarter.com…
hmmthen maybe indiegogo for the for profit piece and crowdrise for the non profit piece?
My thinking too. I am live on Indiegogo; I will re-work the CrowdRise campaign to reflect non=profit only. Thanks.
Hey Emily, you should check out @christinacaci ‘s http://www.laisin.com, similar recommendation-subscription setup.
What a fantastic addition to the portfolio! Congratulations and thank you for helping to give wings to a venture like this. Great name too.
ARE THERE ORGANIZATIONS THAT GROW LEADERS?The importance of leadership in any organization is everchanging. Ten years ago leadership was a reserve for executive management and amisnomer that leadership had to be inborn rather than something that can belearned did take root. David is not a born leader. The age old question is canDavid be reborn? It was also assumed that leaders had to lead from the front,where this might apply to some situations, this principle lacked functionality.Focus has shifted from the leader, the person who is attributed to the role ofleadership. The problem lies partly in the suffix –ship. For instance,headship, professorship and ambassadorship refer to status or rank. There is ageneral understanding that leadership is a role and attribute. It is emergingthat the role and the attributes of an organization cannot be given only to theleader of the organization, being organizations are collective in nature andhave several tiers. This has lead to the development of a hierarchical system toencapsulate all aspects of leadership in an organization. These are team leadership,operational leadership and strategic leadership. In this aspect the ChiefExecutive falls under the strategic tier, line managers fall under theoperational tier and staff in its sense fall under the team tier. As a resultof development of these tiers the world has seen a steady rise in MBAinstitutions that try to sell their programmes to people who want to assume aleadership role. This already suggests that leadership can be taught. Idisagree. Are leaders born or made? It is agreeable that some individualsnaturally assume leadership roles; however, there are those amongst us who lackthis natural ability. Can we be taught how to lead? Notably other people aremore resilient when put in certain situation. For instance, a Chief Executivecan lead an organization and he will be lacking when he leads a group ofmilitary officers. Both these roles require confidence but the later requiresmore courage and sterner stuff rather that confidence.Isnt courage a quality aleader ought to have? Already a model isforming. It has become apparent that there are three approaches to determine aleader, namely, quality, situation and functional approach. Qualities areinherent, what a leader ought to be? Aspects of courage, confidence, showingempathy, kindness among others are to be put into consideration in selection ofa leader. Function approach refers to the role of a leader. Generic roles of aleader as described by the job description like planning, budgeting, hiring,firing, controlling, evaluating among others. Lastly we have the situationapproach. As stated earlier a Chief executive will struggle assuming the roleof a military officer and a military officer will struggle assuming the role ofa sailor, a teacher or a herdsman. Different situations dictate who leads andwho follows. Moving forward it is moot for leaders not to have tunnel vision butadapt and be informed by profit and losses to progress.
Congratulations on CrowdRise. Great company!
I’m with you Charlie…the tag line is a big turnoff. Donors don’t give to be liked and don’t care about being disliked by not giving. Having no tag line would be better than having this one. It left a really bad taste in my mouth. It doesn’t do anything to represent what they stand for.
Not edgy; amateurish.