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Previous offering

GiveTide

Micro-giving platform for charity

Raised from 29 investors

Min: $25,000

Max: $107,000

$12,250

of a $25,000—$107,000 goal

Security Offered

Convertible Note

Minimum Investment: $100

  • Over 8,000 downloads with 590 monthly active users

  • Raised over $20,100 in donations since inception

  • Over $9,800 in donations through the first four months of 2019, a 5% increase from $9,300 in all of 2018

  • In 2018, 24% of all online donations in the U.S. were made using a mobile devicei

Executive Snapshot

In 2018, 24% of online donations were made using a mobile device,ii up from 21% in 2017 and 17% in 2016.iii GiveTide was founded in 2016 to help charitable giving fit into a user’s mobile lifestyle by making fundraising simple and enjoyable.

  • 8,082 downloads (as of 4/30/2019)
  • $20,121 in donations through the platform (as of 4/30/2019)
  • In Q1 2019, the app averaged 950 downloads per month, up from an average of 360 in 2018
  • Featured in the Apple App Store alongside Lyft, Grubhub, and GoFundMe as an app to promote innovative ways to give backiv
  • Plans to use 80% of proceeds from this raise on research and development to improve the app and build out an analytics dashboard for non-profits

Terms

Investment Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $107,000

Discount: 20%

Valuation Cap: $1.25 million or $1.5 million

Conversion Provisions: In connection with equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into non-voting preferred units (Conversion Units) at a price based on the lower of (A) a 20% discount to the price per unit paid for Preferred Units by investors in the Qualified Equity Financing or (B) the price per unit based on a $1.25 million or $1.5 million valuation cap. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Perks

Investors that purchase the first 53,500 Crowd Notes, and thereby fund the first $53,500, will receive Crowd Notes with a conversion provision based on a $1.25 million valuation cap instead of a $1.5 million valuation cap. That means, in connection with equity financing of at least $1,000,000, the company has the option to convert the Crowd Note into non-voting preferred shares (Conversion Shares) at a price based on the lower of (A) a 20% discount to the price per unit paid for Preferred Shares by investors in the Qualified Equity Financing or (B) the price per share based on a $1.25 million valuation cap (instead of $1.5 million).

Overview

Opportunity

GiveTide was founded in 2016 to help charitable giving fit into a user’s mobile lifestyle by making it simple and enjoyable. The GiveTide app was designed to provide donors and charities with a platform that keeps pace with modern technology. Users can make micro-donations as well as share fundraisers that are important to them with friends and family through social media, text, or email.

By the end of 2019, millennials will overtake baby boomers as the largest demographic in the country, with a population of 73 million.v Millennials are also passionate about donating their time and money to non-profits—84% claimed to have given to charity in 2017—even though they tend to earn less than previous generations, are often encumbered by student debt, and incur higher living costs.vi With so many millennials looking to give, this demographic has become increasingly important to non-profits, considering they are about to become the largest target market. Further, people tend to become more generous over their lives due to financial stability, potentially putting millennials on track to become the most generous generation in history.vii

However, because they are earning less than past generations and are often burdened with student debt, millennials choose to donate through different means and in smaller amounts than previous generations. With 92% of the millennial generation owning a smartphone and 85% using social media, it has become important for non-profits to engage with the younger generations online. Social media has allowed non-profits to utilize micro-giving campaigns to connect with a large audience. This is evident through tools like Facebook’s donation button, dedicated fundraising pages, and live video fundraisers. In fact, over 50% of an online campaign’s donation volume typically comes from donors and visitors sharing the fundraiser on social media, with the rest generated through the organizer’s post. When a donor shares a fundraiser with their social network, the average amount of donations generated by that network was $15 in 2018. If any of those donors share the fundraiser, that could bring on another $15 per share, and so on and so forth.viii

Product

The GiveTide app enables users to donate to a non-profit of their choosing each time they use a linked credit or debit card for everyday purchases. By rounding up everyday purchases to the nearest whole dollar, GiveTide allows users to donate spare change to their choice of more than 300 non-profits featured on the platform. Donors can customize a weekly cap for roundups, pause roundups at any time, and make one-time donations. The real-time giving history feature also allows user to monitor the impact of their spare change donations.

Donors can search for charitable organizations through the “Explore” tab and search by category or use the search bar to find a specific organization. If a non-profit is not on the platform, users can request it, and GiveTide aims to add it within 24 hours.

GiveGoal

GiveGoals are the primary way to donate through GiveTide. When users want to donate to a specific organization, they can do so by creating a GiveGoal for that organization or by joining an existing GiveGoal created by another user. A GiveGoal is a pledge to raise a specific amount for a charity over any period of time; it can be kept personal or shared with friends. GiveGoals allow users to invite and team up with family and friends to multiply their donations and share fundraising goals across email, text, and social media. 

For Non-Profits

GiveTide allows any non-profit to sign up for the platform and provides support for each organization throughout its fundraising journey. GiveTide provides organizations with support through marketing advice, email and social media templates, and social media shout-outs. Additionally, the company provides donor information as well as details on specific donations processed through GiveTide.  

Donations are distributed monthly by the GiveTide platform through the Social Good Fund, Inc. via a paper check. In the future, the company plans to implement a feature that will allow non-profits to enter their bank information and receive automated electronic payments.  An organization must receive at least $100 in the month to be eligible for the disbursement. If the organization does not receive over $100, the funds will carry over to the following month until the threshold has been met. If the threshold is not met after several months, GiveTide may offer to send a check below $100.

Security

GiveTide is utilizes Plaid, which provides enterprise-grade encryption trusted by Acorns, Venmo, American Express, Coinbase, and more.ix Plaid authenticates the user’s bank account, monitors the activity of selected cards, and relays information to Dwolla, which is required to generate roundups. Dwolla is a payment processor that is used to move money from a user’s account. Since Plaid hosts all sensitive user data, no sensitive information is stored on users’ phones or GiveTide’s servers. Each of the company’s reputable payment processing partners is subject to NACHA (National Automated Clearing House Association) regulations and routinely audited and penetration-tested to keep hackers out.x

Apple Restrictions

Due to restrictions set by Apple, donations cannot be collected directly through an iOS app unless the app developer is an approved nonprofit organization. Instead, apps that seek to raise money for non-profits, charities, or fundraisers may only collect funds outside of the app.xi This means that organizations may put a link in an app to redirect donors to their page, but they may not accept actual donations through an app.

GiveTide is one of the first apps to solve this problem and actually collect donations through the app. The company does this by utilizing a 501(c)(3) Donor-Advised Fund (DAF), managed by Social Good, that collects and disburses all donations. A DAF is essentially a bank account managed by a 501(c)(3) non-profit, and as such, all donations made to the DAF are tax deductible.

Use of Proceeds

The company plans to use 70% of proceeds from this raise on research and development (R&D). If the minimum amount of $25,000 is raised, the company plans to allocate $17,500 to R&D. If the maximum of $107,000 is raised, GiveTide intends to allocate $74,900 to R&D. For both the minimum and maximum targets, the company plans to use the rest of the proceeds on general marketing (20%) and general working capital (10%). The company plans on utilizing Apple search advertisements, Instagram ads, and may explore other marketing opportunities with the proceeds from this raise.

As part of its R&D efforts, GiveTide hopes to build out a data dashboard for organizations raising on the platform that will feature various analytics such as total donors, total active donors, average donations, and more. The company plans to roll out a free version and a premium version that will provide more predictive analytics like demographics of donors. The data dashboard will serve to automate many of GiveTide’s processes, which are currently handled manually, such as sending donor data to non-profits and verifying checks. Moreover, it will give nonprofits tools to drive their own mobile fundraising campaigns on the platform. The dashboard will be an online portal through which non-profits will be able to log in to monitor and download their donor data in real time. GiveTide will include an option for users to remain anonymous if they do not wish to share their email with the organizations they support. The company also plans to develop the GiveTide app for Android devices with a goal to launch by the end of 2019.

Business Model

GiveTide is free to download, but the company collects 8% of "round-up" donations, and 2.79% of one-time donations from the organizations. The donor-advised fund partner, Social Good Fund, Inc., also receives 1% of the disbursement. The fees are deducted from the donations, eliminating the administrative burden for non-profits who would otherwise have to record each fundraising expense.

The first iteration of the data dashboard will lay the groundwork for more comprehensive business-to-business (B2B) features in the future, such as data analytics tools and the ability to communicate with donors right from the dashboard. The company intends to offer a free version of the dashboard and will also sell a premium model that gives the non-profit more predictive analytic features. The company plans to charge between $50 and $600 a month depending on the size of the non-profit and monthly donation volume for the premium version.

GiveTide’s back-end is comprised of three third-party services: Plaid, Dwolla, and a Donor-Advised Fund (DAF) managed by Social Good. Plaid authenticates the user’s bank account, monitors the activity of selected cards, and relays information required to generate roundups. Dwolla is the payment processor used to move money from a user’s account. For example, if a user swipes their card for a purchase of $1.50, Plaid tells Dwolla to move $0.50 to the GiveTide platform. GiveTide pays $2,500 per month for unlimited donation processing to Dwolla, and $500 per month to Plaid for bank authorization and monitoring. The company pays the $2,500 donation processing fee so that they can accept an unlimited amount of transactions and that fee will remain flat no matter how many donations the company receives.

User Traction

Since inception, the GiveTide app been downloaded over 8,000 times. Through April, the app has averaged 841 downloads per month in 2019, up from an average of 360 in 2018. The company saw an increase in downloads in November 2018 due to being featured in the Apple App store alongside Lyft, Grubhub, and GoFundMe as an app to promote innovate ways to give back.xii

As of May 1, 2019, the app has over 585 monthly active users, up from 228 at the end of 2018. A monthly active user is one who has made a donation in a given month. So far in 2019, the company is adding 90 active users per month, on average, up from an average of 16 in 2018.

GiveTide has received over $21,100 donations through its platform since inception. To date, 89% of donations have been made from spare change and are thus recurring. In all of 2018, the company raised roughly $9,300 through its platform. In the first four months of 2019, the GiveTide app already raised over $9,860 in donations, receiving a record-high of over $3,000 in April. The increase in donations per month thus far in 2019 has been due to a combination of marketing, being featured on the Apple App store, and word of mouth from existing users.

Historical Financials

Since the company began collecting revenue in January 2018, it has generated a total of $1,158 through March 2019. In Q1 2019, revenue totaled $459, a 101% increase from $228 in Q4 2018. The increase in revenue is due to an increase of active users after being featured in the Apple App Store, as well as key improvements to the app that improved new-user conversion.

In 2018, the company incurred total expenses of $45,381, up from $13,778 in 2017. Cost of goods sold was the largest expense, accounting for 79% ($36,000) of the total. Cost of goods sold primarily consisted of the monthly $2,500 donation processing fee and monthly $500 bank authorization and monitoring fee. The company pays the $2,500 donation processing fee for unlimited transactions and expects this fee to remain flat throughout the company’s growth. The company increased its donation processing fee from $500 to $2,500 in November 2017 to accept unlimited transactions. The company also spent $3,188 (7% of total expenses) on marketing in 2018.

In Q1 2019, the company incurred $14,798 in total expenses. The company increased spending on marketing in 2019 to help add more donors on the platform. The company also saw a spike in expenses in September 2017 due to legal and professional fees for the drafting and filing of its patent application.

The company generated a net operating loss of $44,683 in 2018. In Q1 2019, the company has generated a net operating loss of $14,339. So far in 2019, the company has an average monthly burn rate of roughly $4,300, down from a monthly average of roughly $4,500 in 2018. As of April 2019, the company has over $14,000 in cash assets.

Industry

The United States saw a record-breaking year for charitable giving in 2017, reaching $410 billion in total donations, up more than 5% from $389 billion in 2016. Donations from individuals represented 70% of total donations in 2017, reaching $286.6 billion, an increase of 5.2% from 2016. Foundations were the next largest donors, reaching almost $67 billion, followed by bequest donations ($35.7 billion), and corporations ($20.8 billion).xiii

In 2018, millennials gave an average of $591 per donation to charity, up from $481 in 2013 and $341 in 2010. Millennials gave to 3.5 charities on average and donated a total of $20.1 billion in 2018. Baby boomers donated the largest amount in 2018, reaching a total of $58.6 billion, with an average of $1,061. Matures (born before 1944) still donated the most per person, averaging $1,235 across 6.3 charities.xiv  


In a 2017 Social Fundraising report by Crowdrise, mobile devices were found to have facilitated over 79% of the traffic on GoFundMe, an 11% increase from 2015. The report also found that 62% of the donations to campaigns came through mobile devices, compared to 38% made on desktop.xv

In the past, credit card transaction fees as high as $.30 made it difficult to accept micro-donations. With the decline in credit card transaction fees and as mobile payment methods continue to advance, micro-donations have become an effective method of fundraising.xvi 

Although the Gen Z and millennial generations are the smallest in terms of total donations, they are making a large impact on how organizations fundraise. Mobile giving has grown dramatically in the past five years, with 21% of all donations being made through a mobile device in 2017. 82% of Gen Z and 76% of millennials are willing to donate through a mobile device, compared to 62% of Gen X, 38% of baby boomers, and just 20% of matures. Among millennials, the percentage that claim to have donated through a crowdfunding platform has increased from 17% in 2013 to 48% in 2018. As the Gen Z and millennial generations become financially established, organizations will have to adapt with technology to target these generations.xvii

Competitors

GoFundMe

Founded in 2010, GoFundMe is a for-profit crowdfunding platform that allows people to raise money for accidents, illness, or various other events. Users can easily sign up for GoFundMe, set a fundraising goal, tell their story, and share it with friends or social media and begin raising. In 2017, the company switched from a 5% platform fee to 0%, and instead generates revenue through optional tips from donors.xviii GoFundMe hosts a community of more than 50 million donors who have donated over $5 billionxix across 19 countries.xx In 2017, GoFundMe acquired competitor, CrowdRise, and in 2018 GoFundMe also acquired competitor, YouCaring, (which owns Generosity.com and GiveForward).xxi In 2015, the founders sold a majority of their ownership to Accel and TCV at roughly a $600 million valuation.xxii

Fundly

Founded in 2010, Fundly is a crowdfunding and peer-to-peer fundraising platform for non-profits, politics, clubs, schools, churches, and more. Fundly charges a 4.9% platform fee, 2.9% credit card processing fee, and $0.30 per transaction.xxiii In 2015, NonProfitEasy acquired Fundly for an undisclosed amount.xxiv Combined with NonProfitEasy, the company now offers enterprise-level technology for CRM, volunteer management, membership management, and event registration.xxv Fundly has raised over $330 million through its platform.xxvi

Classy

Founded in 2011, Classy is a social enterprise that offers online fundraising tools for organizations of all sizes. Since inception, Classy has raised $1 billion from donors across 330,000 fundraising campaigns in 190 different countries.xxvii The company offers a suite of different fundraising products including peer-to-peer fundraising, crowdfunding, events pages, international fundraising, and direct donations.xxviii Prices for Classy vary depending on the amount of campaigns and what features an organization is looking for. For a single campaign and limited features, it is free for the organization but Classy will take a 5% transaction fee. Classy Pro starts at $299 per month with a 3% transaction fee and features unlimited campaigns and events, 10 administrator logins, website integration, open API, and many more features. Class for Enterprise starts at $1,499 per month with a 1%-2% transaction fee and features unlimited campaigns, unlimited administrators, all features in Classy Pro, and enterprise support.xxix Since inception, the company has raised $53 million in equity funding from JMI Equity, Bullpen Capital, Mithril Capital Management, Salesforce Ventures, and more.xxx

Mightycause

Formerly known as Razoo, Mightycause is a 501(c)(3) public charity that provides online charitable giving solutions. By leveraging secure and efficient technologies, Mightycause seeks to provide donors and nonprofits with easy-to-use fundraising tools and engaging charitable giving activities. Mightycause has raised over $600 million on its platformxxxi and charges a 2.2% platform fee and $0.29 per donation. Organizations can also sign up for an advanced plan for $99 per month that features a CRM dashboard with email marketing, data integration, and a branded donation page.xxxii

MobileCause

Founded in 2008, MobileCause offers a mobile and online fundraising platform that helps organizations gain donors, increase recurring gifts, and engage supporters. MobileCause offers online giving and text-to-donate campaigns, event fundraising, peer-to-peer campaigns, and various campaign analytics. Pricing ranges depending on the size of the organization and the necessary features. Small non-profits (with under $100,000 in annual revenue) costs $149 per month and features 2,000 text messages, unlimited inbound messages, text-to-donate, and mobile subscriptions. The Basic plan costs $249 per month which increases text messages to 15,000; the Essentials plan costs $349 per month and increases text messages 25,000 text messages; and the Advanced plan costs $499 per month and features 50,000 text messages and many more features. Each higher-priced plan also features an increasing number of features including analytics, dedicated customer support, and custom marketing and brandings services.xxxiii In 2017, MobileCause raised a $15 million Series B round led by Level Equity.xxxiv

Team

Pete Ghiorse

CEO and Co-Founder

Prior to GiveTide, Pete graduated Magna Cum Laude from the University of Richmond, where he studied finance & economics and held several successful campus-wide fundraisers for the Huntsman Cancer Institute, raising over $5,000. Upon graduating, Pete worked for Marmon Holdings, Inc. as an Entrepreneur in Residence. At Marmon Holdings, he learned the engineering, operations, and financial components of manufacturing industrial rail cars as part of a larger Management-Training Program.

James Ghiorse

COO and Co-Founder

At GiveTide, James manages daily operations, customer interactions, and design/content generation. Before graduating, James started an after-school program at a local nonprofit to teach underserved youths basic STEM concepts. James has a B.S. in mechanical engineering with a minor in business from Villanova University, where he graduated Magna Cum Laude and won the Meyer ICE Entrepreneurship award for GiveTide. James worked on GiveTide part-time during college and has been full-time since May 2018

Past Financing

In 2017, GiveTide raised a $75,000 funding round through SAFE Notes from friends and family with a valuation cap of $750,000.

Discussion

Endnotes

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