GoFundMe founders get big payday
Brad Damphousse and Andrew Ballester, co-founders of San Diego-based crowdfunding company GoFundMe, said Wednesday that they are selling a controlling interest in their startup to an investor group that includes Accel Partners and Technology Crossover Ventures (TCV). The startup is being valued at roughly $600 million through the sale.
GoFundMe, which claims to be the world's largest fundraising service, is used by people to solicit donations from friends and contacts for personal causes. Users of GoFundMe have collectively raised more than $1.2 billion from 13 million donors. Through the ownership sale, which was first reported by the Wall Street Journal, co-founders Damphousse and Ballester will find themselves flush with funds of their own. To date, the pair have avoided accepting outside capital, instead bootstrapping operations by charging customers a 5 percent transaction fee. It's unclear what motivated the entrepreneurs to abandon their long-held, we'll-do-it-on-our-own attitude.
"We’re incredibly proud of what’s been accomplished to date – and we’re just getting started. We aspire to be a world-class organization which means knowing when it’s time to bring on people who can help you realize your greatest potential," Damphousse said. "I’m proud to say that we’ve done just that." "It doesn't strike me as odd," Audrey Jacobs said of the founders' decision to cash out. Jacobs is a thought-leader in the crowdfunding space and serves as vice president of Americas at equity crowdfunding site OurCrowd. "What's remarkable about these young entrepreneurs is that they bootstrapped the company … and realized that they were at a point that if they were going to scale globally, and help as many people around the world raise money, that they needed to bring in experts who had grown and scaled companies at a massive level."
The investor group assuming ownership of GoFundMe is led by Accel and TCV, the former of which was an early investor in Facebook. The group also includes Greylock Partners, Meritech Capital and Stripes Group. Damphousse, 33, and Ballester, 34, will remain on the board of directors and still hold an undisclosed stake in the company, but relinquish control of day-to-day operations to a new leadership team. Former Groupon President Rob Solomon will take over as CEO and previous LinkedIn head of product David Hahn will serve as COO. GoFundMe will continue to be headquartered in San Diego and grow its team here. The company currently employees around 50 people locally. Solomon also plans to set up an office in Silicon Valley. GoFundMe's focus is on personal campaigns but the company competes in an increasingly competitive crowdfunding arena with some familiar names, including Kickstarter, Tilt and Indiegogo. Crowdfunding raised roughly $10 billion in aggregate funding in 2014, up from $1.5 billion in 2011, according to a March 2015 report from Goldman Sachs. "This is additional market validation of how important crowdfunding is for the future of finance," Jacobs said.
https://www.sandiegouniontribune.com/sdut-gofundme-founders-sell-company-to-investors-2015jun24-story.html#