Tech startup: How Community Funded was born
It was the 12th online crowdfunding platform
Where: Fort Collins / Web: www.communityfunded.com / founded: 2011
McCabe Callahan opened the first Mugs Coffee Lounge in Old Town Fort Collins in 2002 before he graduated from Colorado State University.
He wanted to open a location across from the CSU campus in 2009 and “basically got turned down” by banks and the Small Business Administration, so he turned to his customers. “One customer chipped in, then another,” he says. The final tally of $100,000 allowed him to open the location.
The experience led to the 2011 founding of Community Funded with Ryan Stover. In 2012, “We were the 12th crowdfunding platform to launch on the Internet,” Callahan says.
The company targeted foundations and nonprofits looking for online fundraising tools, but leaders were reticent. “They said, ‘We can’t launch our project on your website,’” says Callahan. “The light bulb turned on.”
He came up with the concept for “white label” crowdfunding. “Let’s sell them the software to use on their website,” he says of the pivot.
In a Nutshell:
A focus on higher education has spurred growth. After CSU committed to becoming a development partner in 2013, the 14-employee company now also provides crowdfunding technology to the University of Colorado system, Oklahoma State University, University of Illinois and other colleges, universities and their foundations.
“Last summer, we tripled our customer accounts,” says Callahan, citing revenue growth from $100,000 in 2014 to $300,000 last year to a forecast $1 million for 2016.
“It’s been this beautiful synergy between a SaaS that’s capable of hockey stick growth and social impact.” Campaigns on the CSU Charge! Crowdfunding platform have raised money for everything from research on cannabis as Multiple Sclerosis therapy to bison
reintroduction at the Soapstone Natural Area. And Community Funded has helped the school lead the way.
“CSU in 2013 was the first university to offer a platform for crowdfunding to faculty, staff and students,” says Callahan. Now there are 250 foundations in higher education using crowdfunding in some way.
“Thought leadership” and customer service have helped drive Community Funded’s success, he adds. Customers are using the company’s crowdfunding platform as “a central storytelling tool” in highly integrated fundraising campaigns.
“It’s been a lot of fun,” Callahan says. “We have a great team of people who are passionate about this.”
There’s a lot of room for growth in higher education, with the vast majority of 4,600 foundations in the space not yet crowdfunding, among 11,000 education-focused foundations in all. Callahan also cites health-care foundations and corporate social responsibility offices as upcoming target markets. He sees nonprofit consultants filling the role of reseller to smaller nonprofits. “There’s a lot of potential,” he says. “Health care and education are very similar.”
Community Funded raised $475,000 from friends and family for development in 2013 and is in the process of a $1.6 million financing round. Callahan says he anticipates an additional round in 2018.