Chicago startup GiveForward raises $500K

By Wailin Wong
Posted Feb. 14 at 8:45 a.m.

GiveForward, a Chicago-based startup that helps people raise money for out-of-pocket medical expenses, has raised $500,000 in its first round of funding.

Desiree Vargas Wrigley and Ethan Austin started GiveForward in 2008 and had looked for some funding at that time, but “what we kept hearing from investors is: ‘You should be a non-profit,’” Vargas Wrigley said. She and Austin funded the company themselves, with Vargas Wrigley waiting tables at Cafe Ba Ba Reeba in Lincoln Park in the meantime.

The GiveForward platform allows people to create personalized fundraising pages and share their cause through social media such as Facebook and Twitter. GiveForward collects the donations, which can be done through credit or debit cards, and passes them along to the beneficiary after deducting 7 percent for processing fees. The company said its users have raised $3.5 million since the company’s inception and about 10,000 users have joined the site, with almost half of them signing up in the last six months.

In 2010, GiveForward was one of 10 companies chosen for the inaugural class of Excelerate, a Chicago-based program that awards funding to startups and provides mentorship from experienced investors and entrepreneurs. Through the Excelerate program, Vargas Wrigley and Austin connected with Tim Krauskopf, a serial entrepreneur and former Motorola Inc. executive who had co-founded Spyglass Inc., the software firm that developed the basis for Microsoft’s Internet Explorer browser.

Krauskopf gave the GiveForward team advice and cultivated a group of investors behind the scenes. He became the lead investor for the company’s fundraising round, which also includes several angel investors and New World Ventures, the Chicago venture capital firm that invests on behalf of the Pritzker family.

“There are a lot of fantastic new tech ventures coming out of Chicago right now and GiveForward is one of the best,” Krauskopf said in a statement. “It is a truly viral service that leverages social networking for a real, productive purpose.”

The $500,000 will allow GiveForward to expand its staff. Austin and Vargas Wrigley drew their first paychecks in January and recently hired a marketing employee and an in-house developer. Vargas Wrigley said the startup plans to hire another five to seven people this year, with most of them serving as fundraising coaches that work one-on-one with the site’s users.

GiveForward also plans to work more closely with hospitals and private clinics so doctors and nurses can recommend GiveForward to the families of patients that might be struggling financially or could benefit from the support of an online community, Vargas Wrigley said.

Vargas Wrigley said her startup’s success in getting funding speaks to how “the funding climate is changing in Chicago.”

“Companies really can be mission-driven or social ventures and still produce return,” she said.

Read more about the topics in this post: , , , , ,

One comment:

  1. Ashley Feb. 16 at 4:06 a.m.

    Very interesting reading. Congrats to the team @ GiveForward for reaching this milestone.

    Connecting entrepreneurs with investors.