Mark Goines' first investment as a VC: Fundly

Non-profit fundraising platform Fundly raises $5M from Morgenthaler and other firms

When Mark Goines invests in a company, you know it’s one to watch.  The angel-turned-VC has just made his first investment as a partner at Morgenthaler Ventures.  The startup: Fundly, a social media-based fundraising platform for non-profits, which plans to announce Wednesday that it has raised $5 million in a round of funding led by Morgenthaler, with help from other seed investors Kapor Capital, Correlation Ventures, Seraph Group, and Accelerator Ventures.  The new capital brings Fundly’s total raised to $7.5 million.

This is actually Goines’ second investment in Fundly—the first one being made back when he was still an angel investor.  So what drew him to the company not once, but twice?

“The team is awesome,” he told me.  “I was very impressed with the combination of skills in the company.  Back when I made personal investments, I focused on two things: investing in a space that I really like and a team that I can work with and enjoy being around.”

Founded in 2009, Fundly takes a different approach to non-profit fundraising than other platforms you may have heard of.  While consumer-facing sites like Causes.com help donors find charities, Fundly helps charities find donors.  It does this by putting a unique social marketing spin on fundraising.  The platform offers turnkey solutions that allow organizations to launch campaigns on sites like Facebook, Twitter, and LinkedIn in minutes, and then encouraging users to spread the word. 

“You should never allow a donor to drop off a check and then just drive away,” CEO Dave Boyce told me.  “When they come to your website to donate to your cause, they already have their hearts and wallets open— this is the peak of engagement and it’s crucial to seize the moment.”

This social media word-of-mouth marketing has been surprisingly successful, with 52% more donations.Organizations using Fundly’s platform report growing their online fundraising by 156% annually, nearly three times the industry average.

Fundly has already attracted some pretty big names—Teach For America, TERI, Silicon Valley Education Foundation, American Red Cross Silicon Valley Chapter, and more.  And Boyce says to keep an eye out for Fundly campaign launches from several other “really big non-profits” before the end of the year.

The platform currently serves over 1,000 organizations, including non-profits, political organizations, and educational institutions, and has helped clients raised a combined total of $220 million to date.

"Morgenthaler in general and Mark Goines specifically have a lot of experience with easy-to-use, cloud-based solutions for consumers, businesses and non-profits alike," said Boyce.  "He was an early investor in consumer finance products such as Mint.com and WePay. Some of our other investors have also backed companies like LinkedIn, Twitter and Zynga. We are looking to leverage that wealth of expertise in social media and finance into growing Fundly."

With this being his first investment as a VC, Goines admitted that the thinking is a little different than what he was used to before.

“It has to be a very large-scale market opportunity that the player can do really well in, because I’m writing a much bigger check, so it has to be able to scale up,” said Goines.  “As an angel, a company I invested in didn’t have to be a big value, because I was still making money.  But as a VC, I have to look for something that has the potential to be a multi-hundred million dollar outcome.  Fundly is in a very large category—it’s a $300 billion a year category.”

While the size of the market has become a new priority, for the most part, Goines' criteria have remained unchanged.  He looks for the usual stuff: good team, solid space, passion, blah blah blah, but he also looks for something else: humility.

"I've run into passionate people who are so passionate that they’re not objective," he said.  "Passion is good, because as an entrepreneur, you're going to be knocking down some walls.  But you need passion for what you're doing plus a real understanding of what it takes to be successful.  Take Aaron Patzer [founder and CEO of Mint.com].  He was a very passionate guy, really bright, inexperienced but nonetheless extremely balanced, objective, open to criticism, and eager to learn."

So entrepreneurs, pay attention: the key to getting funded may not lie in aggressive sales tactics, but in proving you're willing to listen and take notes.

[Note: Mark Goines will be a VC judge at the upcoming Vator Splash San Francisco on September 29]