Funding Your Idea: From Grandpa To Waiting Tables To Raising $500K – with Desiree Vargas Wrigley

by Tim Jahn on April 1, 2011

Desiree Vargas Wrigley is the co-founder of GiveForward, a website that allows people to crowd fund money for medical expenses.  GiveForward recently raised $500,000 in funding.

But that funding came after a lot of bootstrapping and alternative funding sources (like Desiree’s grandpa). In this interview, Desiree shares the unique ways she bootstrapped GiveForward in the beginning, where the idea came from, and how she pushed forward no matter what.

Transcript

Tim Jahn: So Givefoward is a — I’ve seen it called the Kickstarter but for medical expenses. So it’s a site where you can go on and basically crowdsource funding for medical expenses. Where did the idea come from? Can you just give me the background?

Desiree Vargas Wrigley: Sure. So the original idea for GiveForward wasn’t so much a kickstarter medical fundraising. It was more the idea to create a site where anyone could raise money for anything and not necessarily be affiliated with the 501c3 organization. So I first got the idea or kind of the seed idea during Hurricane Katrina when, some of my colleagues at the Kauffman Foundation were talking about how we would rather give directly to families who were rebuilding instead of going through a big nonprofit.

Because as a small field owner giving $100 or $25, you want to be able to feel the impact of your gift. And when you give it to a larger nonprofit, you really don’t know how it’s being used. And so that just got me thinking about the role that small field owner’s play in American philanthropy and how they really should have a bigger say in how their money is used since they are really the backbone of American philanthropy. So that idea was just kind of in the back of my mind for a while.

And then on my 25th birthday, I was trying to figure out what I wanted to do with my life and I was thinking about how there are a lot of other twentysomethings in same position and how maybe there could be some kind of company that helps people transition from one career to the other while keeping benefits and a salary and so while I was brainstorming how would I fund this business idea?

I was 25, I didn’t think a bank was going to give me a loan to start a company. I started to think, well maybe I can make money from friends and family online. I know nonprofits use online fundraising. And when I went to go look, there was really no tool out there to raise money easily online if you weren’t a registered 501c3.

And that’s really when I had that kind of a-ha moment and I thought, you know there are a lot of things that people raise money for that aren’t official nonprofits. Like church youth groups or mission trips to Africa or sorority and fraternity fundraising that sometimes goes through a nonprofit but not always. And then I walked into a convenience store and I saw a little change jar for a baby who needed a heart transplant.

And then I was like, oh of course medical. But even then I didn’t know that medical was going to be the main part of this concept. I just thought, you know there’s so many reasons that people fundraise, let’s provide a tool where people can raise money for anything. And then, it took me about almost two years to get up the courage to actually start GiveForward.

So in the meantime, I moved to Chicago, looked for a regular job and I just couldn’t shake the idea of GiveForward, it kept coming back into my head. And then I went on a long trip to Costa Rica in the fall of 2007 and I was just kind of having like a soul searching time there and GiveForward was consuming all of my like quiet time.

I just could not get the idea out of my head. And I literally woke up in the middle of the night to a little voice in my head telling me to get started. So, I felt like I had this divine intervention that was just forced me to do it. And I went to go look to see if the domain Givefoward was available. And suddenly GiveForward.org had become available the month before.

So I was like, oh god, you should do this. But I got it for you know $24.00 on register.com. Wrote a letter to a professor at Northwestern who, and I knew that a lot of colleges had small business clinics that could help people get through the registration process. And so I just looked for one in Chicago and I found one at Northwestern’s Law School. And I wrote to the professor and said my idea in about three pages and he wrote back and said, “You know I think youre going to be very successful. Come in and we’ll have a team work with you to get started.

So I came back to Chicago and I registered the company. I had no money at the time, I wasn’t working, I had finished a consulting project before Costa Rica. So I came back thinking, “Like how am I going to start this company with no money?” And I’ve always waited tables or it was one of the first skills I learned I think as a teenager. My mom told me that you could find a job in any city and it’s a great way to get cash when you need it. And I thought, “Well I’ll just wait tables until I can get the company off the ground.”

And so what I did was I registered the company, found a job waiting tables in a Italian restaurant that was only opened at night so I could work on the company during the day. And then I wasn’t making enough money, so I actually had to start working for a Real Estate Agent also. And he was rebuilding his website, so I thought I could learn a little bit about web development while I was going through that process with him. And then about a month later was going to be my 26th birthday.

So I decided to have kind of birthday party fundraiser for GiveForward. And at first I was just going to do it in Chicago, but then I had friends in New York that were like, “Hey come to New York for your birthday.” So I thought, “Okay, I’ll do it. Chicago, New York and then my hometown is Kansas City.

So I basically made enough money waiting tables to pay for my you know multicity kayak flight to, so from Chicago to New York and Kansas City and then back to Chicago. And basically what I did was I found bars that would give me a drink special at each place and I charged $20.00 at the door, maybe $25.00. And then I invited everyone I knew from college and from just work and life, high school, friend’s parents. And I think after all was said was done, after the trips, I think I probably raised about $6000.00 which was not a ton of money it was enough to kind of get started.

And before that, I was talking to my grandpa about my new business idea and he started this small like hot dog stand but he was, he made his money elsewhere in oil and energy. And he was a very much a person that was like build your own destiny and work hard to achieve. And he didn’t give a lot away.

I mean, I think he did philanthropically but not to his family so much during — anyway, he was very generous and he gave me $5,000.00 to start my company which as anyone knows is not enough money to start a company. But I took that $5,000.00 and then about I think maybe it was more like $4,000.00 actually now that I think about it, that I raised from the parties. And I used that to make my first payment on the website which was about $30,000.00 total for the first version of GiveForward.

And then I went to prosper.com and I took out a loan from, it’s basically a micro lending site, but for domestic projects. And it’s usually for consolidating debt but they also have a small business section on the site. So I went on just said that I was doing the Givefoward, what I was trying to achieve. And within three days, I had $10,000.00 in my bank account from strangers from all over the world. And it was a nice validation for me to know that GiveForward was a good idea. And around the same time, I talked to my partner Ethan for the first time. A friend introduced us and said he had this idea for this marathon fundraising site but he’s not going to do it. You should talk. And so I think it was the middle of March that we talked.

And he was coming to Chicago anyway for, to stay with some friends. And we just really hit it off, we talked for three hours. And he agreed to come onboard with some money. So he came onboard with $25,000.00. At that point I put it in about $20,000.00 to GiveForward. And another $5,000.00 I put on credit cards. And that’s basically how we made it through the first year with GiveForward was with that money.

Tim Jahn: Wow. So, you get this idea and the little voice tells you, you have to do it. And then you decide that you need to get money somehow, so you wait tables and then the parties and then you meet your cofounder. I mean, the, it’s like, it just kept building up.

And then at what point did you decided that this was, that you could really move, get forward, that you could really move forward with it? I mean in terms of you found, when you found Ethan, was that kind of the moment that you both came together and said, “All right, let’s do this”? Or was it still kind of like on the side like we’re not quite ready to do this full time yet financially or for whatever reason?

Desiree Vargas Wrigley: Well to be completely honest, I waited tables until August of last year. So I waited tables throughout our startup process. And I knew from day one that I wasn’t going to be able to take a salary for a long time. I talked to some other entrepreneurs that realistically you need two to three years of revenue before you can afford to pay yourself. And that’s true for small businesses. And I was thinking, we’re not a small business.

We’re going to be a huge venture, it won’t take us that long. But the reality is that it does take a long time. So I would work all day at GiveForward from eight to four-thirty and then I would go put on my apron at Cafe Ba Ba Reeba , then I would wait on people that were six years younger than I am and throwing around money and I remember being a little frustrated at the time. But day one, I knew that it was something that I had to commit to all the time. It wasn’t something I could really do on the side. And Ethan felt the same way. So he jumped whole heartedly also and he was blogging on the side for extra income. And then he had some savings that he was also using to survive. But it was definitely a new trial. I also actually owned a house in Kansas City at the time that I was trying to sell so I had a mortgage payment and GiveForward payments and then I was —

Tim Jahn: Oh my goodness.

Desiree Vargas Wrigley: Yeah, it was really stressful. I got into a lot of credit card debt honestly which was probably one of the scariest firsts of starting the company because you just see all the numbers going against you. And so, I think that’s one thing that I really tell a lot of startups is that you have to look at more than just revenue to gauge your success in the early days. You have to find something else as a metric. Because otherwise you’ll get really frustrated and discouraged. And so what we started doing was we started counting and reading out loud the thank you emails and thank you notes we got from users.

And we used that as a metric for how successful we were in the early days. And it really helped because you get a message from someone saying, “I don’t know what we would have done without your site. We you know would have never been able to pay our bills and we might be bankrupt right now if it weren’t for you.” So and those kind of messages get you through the really hard times. And we’re lucky we’re in an industry where people thank us a lot. But there are ways to find the value that youre creating in any industry and let that be your guide and your reinforcement in the early days.

Tim Jahn: At the very beginning of our chat here, you were mentioning how Givefoward was never meant to be a crowdfunding site for medical expenses specifically but it was more meant for anyone to crowdfund for anything. At what point did you decided to focus on the medical expense idea? Was there a certain turning point that made that happen?

Desiree Vargas Wrigley: Yeah, it was, from the very beginning we knew that you have to listen to your customers and that the initial business idea that you have isn’t always gong to be the one that makes you money or you finally end up doing as your business model. So Ethan and I were open to being flexible from the very beginning. And what happened was is we we’re kind of chugging along in the early days from August of ’08 until pretty much the beginning of March of ’09. We were just trying to get anyone to raise money for anything on the site. We were going to sororities, fraternities, and churches and we were all over place and we couldn’t really consolidate our efforts.

And then, in March of ’09 we had a really amazing thing happen. Two sisters from DuPaul here in Chicago came to the site, and the younger sister needed to raise $80,000.00 so she could give her older sister one of her kidneys. And the story was really touching and I think a lot of people rallied around the girls. And in 30 days they raised $30,000.00 on our site which was our biggest fundraiser to date, almost as much as the greatest total on our site to date.

And so it was a really big success for us so we thought, you know how can make this success inspire more people? And the girls had already gotten into The Chicago Tribune. We helped it with story into the USA Today. And that just started to bring and more medical fundraisers. And so in August of ’09, we took a step back, you know because it was our one year anniversary and we said, “You know where are we making the most impact, where are we having the most positive feedback from our users, where are we getting the most donations?”

And where are we making the most money? It was medical, it was hands down medical. So we decided in August of ’09 to switch our focus. And at that point I think we’d raised $185,000.00 on the site so far which you know was not as much as we expected but we were still proud of it. And then since making that pivot, in a year in a half in August, we’ve been able to raise over $3.5 million dollars. So we know it was definitely the right direction for us to go.

Tim Jahn: Wow. So your users basically kind of decided for you that the medical, the medical funding idea would really work well for them?

Desiree Vargas Wrigley: Yeah, and it’s funny because, not funny but we never expect your users to completely find your business. But in our case it was such a natural fit I’m not sure why we didn’t do it earlier. Like our father the way people were starting to celebrate and cancer is special to our family in so many ways. And not just in the fundraising cycle, we’ve personally seen the impact of a medical crises (inaudible) in our family’s and that’s what GiveForward has a concept hasn’t been used before us is surprising because you think about how long ago, or for how long people have been struggling from medical expenses from Spaghetti dinners, garage sales and pancake breakfast at church and it’s a common tradition in our society. But it happens in streamliner taken online until it worked. And we’re excited to be at the forefront of that space.

Tim Jahn: Yeah, it is, it’s such a unique — I mean crowdfunding these days is a very popular idea. I mean, like I said Kickstarter, they do it for creative projects and I know there’s startups that are coming out that help you actually crowdfund a business kind of like what you wanted to do back in the day. But the idea of crowdfunding medical expenses, it’s such a unique but I’m sure youre looking at it like you said, it was such an obvious idea when you, hindsight’s 20/20. There’s so many people that need help with medical bills that obviously skyrocket. What —

Desiree Vargas Wrigley: Yeah, and I think — sorry go ahead.

Tim Jahn: I’m sorry, go ahead.

Desiree Vargas Wrigley: I was just going to say, the factor is really exciting. The majority of us came around the end of ’08, the beginning of ’09, Kickstarter, IndieGoGo. DonorsChoose came a little bit before us and they’re not exactly the same but they’re crowdfunding for schools to look at what school act has done for the political arena. And then now I think there’s something like thirty different crowdfunding sites in the last two years.

I think it’s a testament to our society and the desire that we all have to kind of a chip in a little bit to help our neighbor. That maybe it’s a product of GenY growing up, I’m not sure what it is. But it’s definitely happening all over the world.

Tim Jahn: Absolutely. So your users kind of defined what the site should be crowdfunding for medical expenses. When you launched the original version of GiveForward, how functional was it? There’s this idea of you know minimum viable product and kind of getting something out the door and then iterating it after the fact. Was it a fully functional flagship site or did you just have something basic up to get the ball rolling?

Desiree Vargas Wrigley: We definitely had something basic. So we — every iteration of our site has been because we had an outside deadline that we had to meet. In the first one, the very first launch of the site, we had the great opportunity, my sister was being filmed for a show on Bravo and she needed to have this like coming out moment. So they were trying to film her and we thought, okay, our launch party is the perfect time for that.

So we just forced our developers to put out a product that was not quite ready honestly in august of ’08. And the good thing about that is that started getting users pretty early on who started giving us feedback about features that they were convinced that they wanted that turns out that they didn’t want at all. And we offered features that were part of the original business plan, that honestly we’re still too small to implement a feature where people will come on and choose their giving style and give a dollar to five different projects or ten dollars to five different projects.

Even now, our (inaudible) base isn’t ready for that, that feature. So I think when youre starting a company I think you need to plan out the whole thing and how everything is going to talk to each other and everything is going to work. But the reality is that you need to get something up so you can start learning from your users and your customers and start figuring out which way they’re actually going to be profitable for you. And so I’m glad we did it the way we did it.

We learned a lot the first year. I think there are some sites that out there that are more like what GiveForward was originally and they might have the same problem that we had in the beginning. By not focusing, it’s hard to make all those different kinds of customers happy. So what we did, was we had our development firm do our first version of the site, then we saved up all the features we wanted to add and we saved up enough money and did a $10,000.00 lead design up (inaudible) the features and rolled those out. And then you know fixed them because they created a ton of bugs. And then we saved up enough money to basically completely overhaul the site and we did that last summer.

And then that there design was forced a little bit because of Excelerate Labs, we were part of a tech incubator.

And so we had a demo day and we had to pitch our site and we really needed to pitch the new version of the site, not the old version of the site. So that forced us to push it out at the end of August. And it wasn’t ready. Honestly, there were features missing that were, you know even features from the old site that weren’t available anymore; something with Facebook didn’t work that perfectly. But we, it was actually a really good opportunity for us to learn from our users what they were missing and what they valued and then to make sure that we improved those and we added them to the new iteration. And now we do, we finally have an in-house developer.

So we do need a new deploy probably every two to three weeks, fine tuning some of the features that we have, adding new functionality can give the layout sometimes the things that aren’t working well for users. So it’s really nice to be able to make those little incremental changes which is such a big difference our numbers. In February we saw a little issue of the CVD code, we (inaudible) off from there even if you hadn’t filled it out and that was confusing people. And we were losing lots of transactions because of it and switched that and we did $100,000.00 more in donations last month than the month before. So —

Tim Jahn: Oh wow, such a simple little fix and such an impact.

Desiree Vargas Wrigley: Simple little — yeah. Well that, I mean combined with the fact that we made Facebook part of the checkout process. Those two things combined, you know. You can’t do that if you don’t have someone constantly working on your product.

Tim Jahn: Absolutely. So you were waiting tables for over a year to bootstrap this and then you had the idea of what —

Desiree Vargas Wrigley: I was I think it was like three years.

Tim Jahn: Three years, so definitely over a year. And then you raised some money with the parties. You just, your passion and drive to launch this thing is very inspiring. What would be your one piece of advice for other creative entrepreneurs who, they know they have to bootstrap, I mean, they don’t have access to capital and they need to launch their idea somehow. What’s your one piece of advice for them?

Desiree Vargas Wrigley: I think do everything as cheaply as you possibly can. Ethan and I were really good about you know finding interns who were passionate about our cause, who would help us and work for free. We did, we found really cheap rent, we used, an old laser used to print our own business cards and cut them on a paper cutter. And we did everything we did to save money.

Because if your idea just (inaudible) for you as it did for us it’s like, it’s a fire you can’t put out and you, you have to keep driving forward. And you wont be able to if you’re spending money on frivolous things. So it’s basically just being as frugal as you possibly can to get to the point where you need to be where you can start to prove that your idea really does work.

(photo credit)

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